Common Cause Submits Written Testimony for Senate Hearing on Laws and Enforcement Governing Secret Money in Elections

Today at 2:00 p.m., the U.S. Senate Committee on Finance’s Subcommittee on Taxation and IRS Oversight will hold a hearing on current laws and enforcement governing the political activities by tax exempt “dark money” groups. Beth Rotman, Common Cause Director of Money in Politics and Ethics, submitted written testimony to the subcommittee for today’s hearing record, detailing how a lack of enforcement by both the IRS and the Federal Election Commission (FEC) has allowed “dark money” groups to evade existing disclosure laws related to political spending.

Rotman’s testimony stresses the point that the U.S. Supreme Court has consistently upheld laws requiring the disclosure of political spending since Congress passed the 1971 Federal Election Campaign Act (FECA) and subsequent post-Watergate amendments to the legislation. That strong support of campaign finance disclosure has continued under current Chief Justice John Roberts despite several Court rulings undermining other campaign finance laws:

In Citizens United v FEC, the Supreme Court reaffirmed the importance of disclosure of political spending, ruling 8-1 that transparency in political spending empowers the electorate with the tools needed to make informed decisions about speakers and messages.

Nonetheless, the system is not transparent due to outdated disclosure laws in the wake of Citizens United (and the Republican filibusters of the DISCLOSE Act), and the failure of both the Federal Election Commission and the Internal Revenue Service to enforce existing laws, however incomplete, against apparent bad actors.  Secret money spending by outside groups since Citizens United has exceeded $1 billion dollars in federal elections and the spending race continues. Unfortunately for the American public, a lot has had to go wrong to make it possible for them to be so completely in the dark about so much political spending.

Rotman points to the fact that secret money groups have spent more than $1 billion anonymously in U.S. elections since the Supreme Court’s Citizens United ruling. The blame, she testifies, can be ascribed to a combination of laws which have not been updated since the controversial Supreme Court ruling (most recently due to a Senate Republican filibuster of the DISCLOSE Act), and the failure of both the FEC and the IRS to enforce even existing laws.

First, one of the basic statutory principles of campaign finance law found in the federal statute and mirrored in almost every state requires the formation of a “political committee” once any organization receives contributions or makes expenditures in excess of $1,000 in a year and whose major purpose is to influence the covered election. 52 U.S.C. § 30101. The FEC has failed to enforce this basic tenet of campaign finance law due to deadlocked votes engineered by some of its commissioners’ ideological opposition to the law, which has allowed these organizations to spend huge sums without registering and complying with this fundamental rule applicable to political actors.

Rotman emphasizes that even with GOP-engineered deadlocks at the FEC and congressional appropriations riders preventing the Treasury Department and IRS from setting clearer definitions and updating its regulations, the IRS is still fully empowered to enforce those laws currently on the books. That enforcement would help curb the unprecedented “dark money” abuses thriving in the current enforcement vacuum. Rotman calls on the IRS to rethink its priorities and stop the ongoing and blatant misuse of social welfare organizations by political operatives.

The IRS must stop looking the other way and require the overtly political groups masquerading as social welfare nonprofits under Section 501(c)(4) to carry out their election related spending through tax-exempt organizations in accordance with Section 527.

Political operatives should not be able to circumvent the constitutionally sound bedrock policy of disclosure by circumventing inconsistent enforcement and vague regulations governing organizations that Congress never intended would engage in election-related spending. This ongoing scandal threatens the integrity of our elections and undermines confidence in our democracy.

In the past year, Senate Republicans have blocked debate on the DISCLOSE Act four separate times by preventing its consideration through a unanimous consent request last August and filibustering the For the People Act, Freedom to Vote Act, and Freedom to Vote: John R. Lewis Act, all of which include the DISCLOSE Act.

To read Rotman’s full written testimony to the Committee, click here.

To watch the hearing, “Laws and Enforcement Governing the Political Activities of Tax Exempt Entities,” on the Committee website, click here.