Editorial: A perversion of "social welfare"
December 4, 2013
The Obama administration's move to rein in political activity by tax-exempt groups has the potential to slow the torrent of secret election money funneled through purported " social welfare" groups.
It's about time.
For years, these organizations have pushed legal boundaries, turning out attack ads while being able to hide the identity of their donors.
The rise of politically motivated 501(c)(4) groups, named after the part of the tax code that governs them, has been a corrosive force in politics.
It's not the speech or the amount of money we quarrel with. It's the ability to hide the donors that undermines transparency in the electoral process.
Such 501(c)(4) groups do not have to report the identity of donors to the Federal Elections Commission.
The best case scenario is that the new regulations would push this money into other political pipelines in which reporting is required.
But there's a long way to go to get to that point. And already there is significant pushback from conservative and liberal activist groups alike.
Some are saying the new regulations are an effort by the Obama administration to squelch conservative speech.
That suspicion may be understandable given how the Internal Revenue Service had targeted conservative groups for extra scrutiny when they pursued nonprofit status.
But this is not a continuation of that harassment. The proposed rules actually are an effort to bring some clarity to the murky world of politicking by nonprofits.
Clearer definitions would help everyone.
If it's any consolation to conservatives, liberal groups feel picked on as well by the new rules, saying the changes could limit legitimate lobbying activities.
We'll withhold judgment on that until we see a more detailed version of what the administration has in mind.
As it stands, the rules issued Tuesday would more carefully define "intervention in political campaigns," which is already prohibited but flouted by political professionals exploiting the tax-exempt status and donor anonymity to aid election campaigns.
The Treasury Department and the Internal Revenue Service want to change the rules to make clear that "the promotion of social welfare does not include direct or indirect candidate-related political activity."
That would keep the nonprofits from claiming their electoral activities -- such as running ads, registering voters and giving out campaign materials -- are "social welfare" activities.
"We are at a point now where we have had wholesale evasion of campaign finance law," Fred Wertheimer, president of Democracy 21, told The Washington Post. His group aims to reduce the influence of money in politics.
The proposed rule still must go through a public comment process and probably a public hearing. There is plenty of time to debate the finer points of the proposed changes.
The fact that there is a proposal on the table to recalibrate the role of social welfare nonprofits is a critical first step toward bringing greater transparency to the political process.
--The Denver Post