In 2013, it was alleged that the IRS had subjected Tea Party groups that applied for nonprofit status to extra scrutiny. Led by Fox News, hate radio and Rep. Darrell Issa’s House Oversight committee, the right howled with indignity. The IRS Director was removed from office. IRS agent, Lois Lerner was vilified. There were even charges that President Obama ordered the IRS to deny right wing groups nonprofit status.
It made for a sensational story. Unfortunately, it was based on a lie.
Recently, ThinkProgress offered proof. The organization reviewed IRS documents it received as a result of the Freedom of Information Act. The documents requested are lists of words that would trigger IRS agents to give extra scrutiny to organizations that requested 501(c)(3) charitable status. According to Josh Israel, the author of a ThinkProgress report, “The 22 ‘Be On the Look Out’ key words list distributed to staff reviewing applications between August 12, 2010 and April 19, 2013, included more explicit references to progressive groups, ACORN successors, and medical marijuana organizations than to Tea Party entities.” You can read the entire report by clicking here.
Nevertheless, the real problem isn’t whether nonprofit groups representing one side of our political spectrum are targeted more than others. The real problem is that 501(c)(3) and 501(c)(4) nonprofits are allowed to engage in politics at all. By applying for nonprofit status, these groups purport to be primarily charitable or educational in nature (the language of the IRS rule governing nonprofits was changed from “exclusively” to “primarily” in 1959.) Yet one nonprofit after another has been found to spend most of its time and money sponsoring political ads targeting specific candidates than educating the public.
No one has abused nonprofit status more than the Koch brothers. The “Kochtopus” of non-profits used to influence elections is both extensive and unprecedented. In 2012 alone, they spent $383 million to help conservative candidates. And they were just getting organized. Since then, they have expanded their complex network of nonprofit “social welfare” groups and trade associations to allow them to spend even more money to influence elections.
They rely on nonprofits in order to take advantage of tax loopholes that allow them to hide the list of donors.
More recently, they have embraced the use of “disregarded entities” – Limited Liability Corporations (LLCs) that are “owned” by nonprofit organizations and considered part of them for tax purposes. So far, this is a political tactic used exclusively by the Kochs to disguise their political spending. Unlike their more famous shill groups such as Americans for Prosperity and 60 Plus, the names of these groups are often just a jumble of letters such as PRDIST, RION, TOHE, ORRA, TRGN, SLAH, POFN, RGSN, TDNA, DAS MGR, and STN. Although these organizations are prohibited from engaging in politics, that is clearly their primary focus. And the amount of money spent by these groups is staggering.
The Huffington Post’s Paul Blumenthal and the Sunlight Foundation studied the spending of such groups since January 2013. Contrary to IRS rules, these groups spent at least $24.6 million on ads that named specific candidates. And that was in an off year for elections! Koch-funded groups have even spent money to influence local elections, such as school board elections.
Clearly, billionaires are trying to subvert our democracy. But they can be stopped. We don’t even need a constitutional amendment or a Supreme Court ruling to stop them. All we need is for the IRS to act; to change its rules prohibiting nonprofits from engaging in politics – even political “education.”