Tags: IRS | Center for Public Integrity | Bill Nelson | nonprofits | dark money

IRS Ignores 'Flagrant' Political Spending by Nonprofits, Report Says

By    |   Thursday, 22 January 2015 10:20 AM

Of the 1 million U.S. nonprofit groups it regulates, the IRS has only recently started auditing a mere 26 of them for accepting "dark money" that gets used for political elections, the Center for Public Integrity (CPI) reported.

"Dark money" is the name given to secret corporate funds used in elections that are gathered by groups supposedly established to promote "social welfare." The IRS forbids such groups from engaging in electoral politics as a primary activity.

But political contributions coming directly from those nonprofits' funds have risen dramatically after the landmark 2010 Supreme Court decision in the "Citizens United" case, which has allowed such groups to engage without disclosing the names of their influential donors.

The number of these nonprofits, said CPI, is "skyrocketing."

In the November 2014 midterms, for example, about $130 million came from dozens of conservative nonprofits to help fund GOP Senate races where Republicans seized control from Democrats, CPI said.

At least one lawmaker is angry. "The IRS is not doing its job," Florida Sen. Bill Nelson, a Democrat, said in an interview with CPI. "There have been not only some obvious abuses of the tax exemption by some of these so-called social welfare groups, but I think some pretty flagrant ones."

Wrote CPI of the IRS' lack of oversight: "More than 100 nonprofit groups have directly involved themselves in elections during recent years, some spending into the tens of millions of dollars. The rest — largely charities that are generally prohibited from campaigning for politicians — are seldom monitored to ensure they follow federal law."

It added of its investigation: "The situation leaves the groups largely free to operate like political committees without fear of reprisal."

Five years after "Citizens United," dark money contributions have caused a "fundamental shift," according to OpenSecrets.org, which tracks campaign spending.

The organization said: "Spending by organizations that do not disclose their donors increased from less than $5.2 million in 2006 to well over $300 million in the 2012 election."

Some have suggested that the Supreme Court could strike down its landmark law amid abuses, the New Yorker reported.

The magazine cited a new study from the Brennan Center for Justice at New York University, which highlighted how the court's 2010 decision has changed the political donor landscape.

Wrote the New Yorker of the NYU study: "A 'tiny sliver of mega-donors,' funnels money through super PACs and tax-exempt, so-called social-welfare organizations. The cascade of cash is affecting every level of government — not just federal elections but races for governor, mayor, attorney general, district attorney, city council, and judge.

"Money has been present in politics for a long time, but thanks to this Court there is a great deal more of it, and it is making elections uglier affairs."

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Of the 1 million U.S. non-profit groups it regulates, the IRS has only recently started auditing 26 of them for accepting "dark money" that gets used for political elections, the Center for Public Integrity reported.
IRS, Center for Public Integrity, Bill Nelson, nonprofits, dark money
Thursday, 22 January 2015 10:20 AM
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