The Ticket

Democrats accuse conservative political groups of exploiting tax-exempt status

Chris Moody, Yahoo News
The Ticket

The Democratic Senatorial Campaign Committee will file a formal complaint with the Federal Election Commission Monday against politically active conservative groups operating under tax-exempt status, Yahoo News has confirmed.

The organizations under fire from the DSCC include Crossroads Grassroots Policy Strategies, Americans for Prosperity and the 60 Plus Association, which have already spent millions on advertisements targeting President Barack Obama this election cycle. They operate as "social welfare" groups under section 501(c)4 of the tax code, which prohibits them from making political activism their primary function, although legally, the term is vaguely defined. Liberals and conservatives both use groups like these to fund political causes and can accept unlimited amounts of corporate and union donations, but unlike super PACs, they are not required to disclose the names of their benefactors and cannot directly support or oppose a candidate for office.

The news was first reported Monday morning by Jonathan Weisman of the The New York Times, which also ran a feature Sunday on how corporations use such groups to mask their political donations.

The DSCC argues that these three groups have engaged in political activism that should disqualify them from receiving tax-exempt status.

"Respondents are raising and spending millions of dollars to accomplish their major purpose of influencing federal elections, while hiding their funding sources," reads the complaint, which was obtained by Yahoo News. "By operating in secret, they have violated and continue to violate the Federal Election Campaign Act. Accordingly, Complainant Democratic Senatorial Campaign Committee respectfully requests that they be enjoined from further violations and fined the maximum amount permitted by law."

According to the Times, Crossroads GPS spokesman Jonathan Collegio dismissed the complaint as part of a series of "publicity stunts to promote partisan causes." James L. Martin, chairman of the 60 Plus Association, told the newspaper that the move was "naked politics, pure and simple."

A series of recent court cases have opened more opportunities for legal spending on political speech. In 2010, the Supreme Court ruled in Citizens United v. the Federal Election Commission that corporations and unions could legally donate unlimited amounts to political causes, and in March of the same year, the D.C. Circuit Court of Appeals ruled in Speech Now v. the Federal Election Commission that independent political expenditure groups (super PACs) could accept unlimited amounts to spend on political activities.

The result has contributed to a flood of new spending, and a majority of it has benefited Republicans. Most recently, after last month's Supreme Court ruling that upheld the Affordable Care Act, Americans for Prosperity announced a new, $9 million campaign opposing the law. Crossroads GPS, the sister group to America Crossroads super PAC, is spending $25 million on anti-Obama ads this week.

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