Thomas B. Edsall writing in the New York Times examines the hidden machinations of Big Money network of influence often referred to as the Kochtopus.
Who Needs a Smoke-Filled Room?
By Thomas B. Edsall
Karl Rove, the Koch Brothers and the End of Political Transparency
The financial resources of the anonymous donors to Crossroads are striking, according to the organization’s 990 filing. Among the donors were 53 who contributed at least $1 million. Even more generously, one donor gave $22.5 million, another gave $18 million, and two gave $10 million each.
The right to veil the identity of contributors to such groups as Crossroads GPS is based on provisions in section 501(c)(4) of the Internal Revenue Code, provisions that offer anonymity to those who support tax exempt organizations engaged in activities defined as permissible by the Internal Revenue Code. Here is the language: “IRC 501(c)(4) requires that organizations operate primarily in promoting in some way the common good and general welfare of the people of the community.” The section continues, “Generally, political educational organizations must conduct their activities in a non-partisan manner.”
The emergence since 2008 of politically adroit, highly partisan so-called social welfare organizations has resulted in qualitative changes in the system of campaign finance.
Edsall then walks readers through the deliberately labyrinthine arrangement structured to obscure the sources of money for these groups.
The lion’s share of grants made by Crossroads to other 501(c)(4)s went to Americans for Tax Reform, which got $26.4 million. Americans for Tax Reform describes its mission as working to see that “taxes are simpler, flatter, more visible, and lower than they are today.” Indeed, it advertises its goal as opposing “all tax increases as a matter of principle,” adding that “ATR was founded in 1985 by Grover Norquist at the request of President Reagan.” The Crossroads grant provided 86 percent of A.T.R.'s total funds raised, which in 2012 were $30.98 million, according to A.T.R.'s 990 filing.
then explores how both Crossroads and A.T.R. fudge complying with the requirement that most of their spending must go for "social welfare". Crossroads spokesman Paul Lindsay responded to Edsall's enquiries about using groups like A.T.R. to mask more political and partisan expenditures Lindsay claimed the funds were come with
"a stipulation that the funds only be used for their exempt activity and not for political purposes.” and promised stricter "due diligence" in the future. Americans for Tax Reform reports allocating differing amounts to political and partisan activities to the FEC than they do to the IRS. A.T.R. spokesman John Kartch responded to to Edsall's enquiries about the discrepancy by saying
“The definitions differ and are complicated and not easily put into 25 words or less. That’s what the lawyers and accountants handle.”
If the operations and financing of Crossroads GPS and Americans for Tax Reform are less than transparent, they fit well in the world of labyrinthine secrecy characteristic of the $400 million network of 17 interlocking advocacy groups that coexist under the aegis of the Koch brothers.
Edsall writes in conclusion.
The steady deregulation of election financing has disenfranchised ordinary voters. Part of their disenfranchisement comes from the capacity of donors to remain unaccountable to the electorate at large. The combination of lax regulation by the F.E.C., weak oversight by the I.R.S. and a Supreme Court majority blind to the corrosive power of money in politics has created a system of campaign finance dominated by those with vast fortunes answerable to no one but themselves.
A two-class structure of election financing is emerging. The first is the traditional system of federally regulated individual contributions in which the small donor has become increasingly important. The second is the combination of “super PACs” and tax-exempt independent expenditure groups, including 501(c)(4)s, which together operate without limits and cater almost exclusively to those at the very top of the economic pyramid. Policing the hodgepodge of regulations, statutes and rulings governing elections has become virtually impossible. A kind of lawlessness prevails that is incompatible with the goals of democracy.
Edsall discribes the lax oversight by both the I.R.S. and the F.E.C. as major contributing factors in the rapidly changing role that Big Money plays in our national politics. With a craven Supreme Court and a Big Money friendly Republican Party blocking reforms in the Congress American democracy is imperiled, leabving us sliding toward a Plutocracy.