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Democrats challenge tax-exempt status of GOP campaign groups

By Eric W. Dolan
Monday, July 9, 2012 16:54 EDT
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The Democratic Senatorial Campaign Committee on Monday filed a complaint with the Federal Election Commission alleging that three major pro-Republican groups were violating federal campaign laws.

The complaint targets 60 Plus Association, Crossroads GPS, and Americans for Prosperity. All of the groups are registered as tax-exempt nonprofit 501c(4) organizations, also known as social welfare organizations, allowing them to receive unlimited funds without having to disclose their donors. The three groups have made millions of dollars worth of independent expenditures, but have not registered as political committees.

“Respondents are raising and spending millions of dollars to accomplish their major purpose of influencing federal elections, while hiding their funding sources. By operating in secret, they have violated and continue to violate the Federal Election Campaign Act. Accordingly, Complainant Democratic Senatorial Campaign Committee respectfully requests that they be enjoined from further violations and fined the maximum amount permitted by law,” Guy Cecil, executive director of the DSCC, writes in the complaint (PDF).

The IRS requires that nonprofit 501c(4) organizations “operate primarily to further the common good.” The organizations are prohibited from running ads in support of or opposition to candidates for public office.

Groups like Crossroads GPS have attempted to circumvent the ban on partisan activities by attacking Democratic candidates in ads without explicitly urging people to vote against them. Crossroad GPS’s latest ad, for instance, attacks President Barack Obama for “making excuses” about the state of the economy, but does not mention the upcoming election.

Democrats argue that by registering with the IRS instead of the FEC, the three pro-Republican groups are “using secret money to subvert the democratic process.”

“A Commission review will readily reveal that these ‘Stealth PACs,’ whose activities dwarf those of nearly all conventional PACs, have long been required to register, report and disclose their donors. Their time in the shadows is over,” their complaint reads.

Legal challenges against groups like Crossroads GPS have a strong chance of succeeding, according to Citizens for Responsibility and Ethics in Washington (CREW). But because the FEC is notoriously slow, no action is expected to be taken before the 2012 elections.

However, the complaint filed with the FEC could make wealthy donors to 60 Plus Association, Crossroads GPS, and Americans for Prosperity think twice if they wish to remain anonymous.

Eric W. Dolan
Eric W. Dolan
Eric W. Dolan has served as an editor for Raw Story since August 2010, and is based out of Sacramento, California. He grew up in the suburbs of Chicago and received a Bachelor of Science from Bradley University. Eric is also the publisher and editor of PsyPost. You can follow him on Twitter @ewdolan.
 
 
 
 
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