Senate hearings, lawsuits and an Internal Revenue Service questionnaire are placing new scrutiny on nonprofit groups that spend millions of dollars on political campaigns without disclosing their donors.
Senator Carl Levin, a Michigan Democrat, said he would hold hearings on why nonprofits could spend their money on elections without the IRS questioning whether such efforts are proper.
For its part, the tax agency sent questionnaires to more than 1,300 nonprofits, asking them to justify their status. And a government ethics watchdog group petitioned and is suing the IRS to force the agency to keep nonprofits out of politics.
A crackdown on nonprofit political spending could lead to greater disclosure of who is financing independent attack ads and other activity waged by individuals or special interest groups, though it’s unlikely to end the escalating costs of campaigns. Donors could shift their money to super-political action committees, which can accept unlimited checks and must make public the identity of their contributors.
“It’s like whack-a-mole,” said Bill Allison, editorial director for the Sunlight Foundation, a Washington-based watchdog group, “The money will all flow to the super-PACs.”
Nonprofits such as Priorities USA, founded by former aides to President Barack Obama, and Crossroads GPS, created with the help of Republican strategist Karl Rove, proliferated since the U.S. Supreme Court’s 2010 Citizens United decision removing limits on corporate and union spending on elections.
Those organizations spent more than $300 million on the 2012 campaign, up 280 percent over the $79 million spent four years earlier, according to the Center for Responsive Politics.
Insufficient Disclosure
“We’re in a situation where we do not have the disclosure that the Supreme Court said in Citizens United that we should have for the good of the country,” said former Federal Election Commission Chairman Trevor Potter, president of the Campaign Legal Center, a Washington-based advocacy group that supports laws requiring nonprofits to identify their donors.
Another former FEC chairman, Bradley Smith, founder of the Center for Competitive Politics, takes the counter view. He said the undisclosed money accounted for just 4 percent of the estimated $7 billion spent on the 2012 elections.