Common Cause Statement on House Passage of HR 3865, to Preserve the Social Welfare Tax Loophole for Political Non-Profit Groups

    Media Contact
  • Dale Eisman

Today’s vote continues a shameless, partisan-inspired campaign on behalf of secrecy and deception in politics and government. We urge the Senate to stop it.

HR 3865 would preserve a Citizens United-created tax loophole that allows corporations, associations and the super rich to conceal multi-million dollar investments in our elected officials made through non-profit “social welfare” organizations. Its supporters apparently believe that political operators abusing the law should get a free pass, and that voters have no right to know who is trying to buy our elections and what they might want in return for their money.

The Treasury Department and the IRS have launched what appears to be a good faith attempt to close the loophole. This bill stops the process dead in its tracks with no justification, so the groups would remain free to dump millions of dollars from anonymous donors into the 2014 election.

Common Cause has called for substantial changes in the initial IRS draft so that legitimate civic engagement activities, like nonpartisan voter registration efforts, are not counted as “candidate-related political activity.”

But there is plenty of time to refine the draft in a way that would not disrupt the operations of legitimate social welfare organizations and require dark money political operators to disclose who is funding their hundreds of millions of dollars in campaign ads.

The revised draft also should require groups devoted to electing and defeating candidates, like the Republican-backed Crossroads GPS and the Democratic-backed Priorities USA, to be reclassified under Section 527 of the tax code, allowing them to remain tax-exempt but requiring them to disclose their donors.