Super PACs are so 2011.
The political groups that injected millions of dollars into political races over the past two years may already be giving way to the rise of a new class of politically oriented nonprofits, organizations that have most of the same powers as super PACs, and one major advantage: They don’t have to meet the same strict requirements for disclosing where their money comes from.
Organized under the tax code, these so-called “social welfare” groups are able to keep their finances secret because of their ostensibly nonpolitical purposes. But the flurry of political ads that the groups are running raises the question about how much is too much — and whether anything will be done about it if these groups overstep their boundaries.
As nonprofits, they are supposed to be policed by the Internal Revenue Service, which now finds itself in a tug of war. Advocates of campaign finance reform say the agency has been comatose as political spending has skyrocketed, but Republican senators have warned the IRS that it would be political persecution to target some of the nonprofits for investigation.
“The IRS staying outside the political realm is critical for public confidence in your agency,” Sen. Orrin G. Hatch of Utah and nearly a dozen other Republican senators said in a warning letter to the agency this month.
That the money is shifting is clear.
In January, super PACs reported spending $51 million on overt political advocacy, while the nonprofits that critics are calling “dark money” groups spent just $68,000. But so far this month, the new group of social welfare nonprofits have spent $18 million, or more than 50 percent of the $31 million that super PACs have spent.
Political action committees are governed by the Federal Election Commission, whereas the nonprofits, which are organized under Section 501(c) of the tax code, need to notify the FEC of advertising expenditures only when their ads directly call for the election or defeat of a candidate — a criterion that many highly political ads manage to skirt by speaking about hot-button political issues without dwelling on candidates’ names.
Seeking to maximize their options, many political groups created both super PACs and nonprofit “social welfare” organizations.
Most of the nonprofits were established specifically to be active in the 2012 election, but some, including one formed by the U.S. Chamber of Commerce, are longtime nonprofits that suddenly have become highly politically active, using powers bestowed on them by the 2010 Supreme Court decision in the Citizens United case. The national business lobby has spent $7.9 million in the past two months, mostly opposing Democratic Senate candidates such as incumbent Bill Nelson in Florida and Tim Kaine in Virginia.
The shift in money is evident in a Republican group led by operatives including former George W. Bush senior strategist Karl Rove, a group that includes both a super PAC, American Crossroads, and a social-welfare nonprofit, Crossroads GPS. Despite being the supposedly less political arm, the nonprofit has bought far more political television ads than its super PAC cousin in recent weeks, according to a review by The Washington Times of broadcasting records.
Americans for Prosperity, a social-welfare nonprofit backed by the conservative billionaire industrialist Koch brothers that does not even have an affiliated super PAC, has made more presidential-themed ad buys in recent weeks than any outside group that does acknowledge being primarily political, The Times survey found. It has spent $14 million so far this month on ads that feature President Obama saying he could be a “one-term” president.
“What you’re finding now is super PACs, while you hear a lot about them, are not going to be the vehicles of choice. More money flowed through 501(c)s than through super PACs, because super PAC donors are disclosed,” Rep. Chris Van Hollen, a Maryland Democrat who has closely tracked campaign finance, said in June, referring to the section of the tax code by which the groups are known.
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Luke Rosiak is a projects reporter on The Washington Times’ investigative team. He formerly covered lobbying and campaign finance for two watchdog groups as well as transportation for The Washington Post. Luke can be reached at firstname.lastname@example.org.
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