June 2, 2016

Sen. Whitehouse: Intimidation of IRS Helps Dark Money Groups


Sen. Sheldon Whitehouse

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by Senator Sheldon Whitehouse (D-R.I.). Sen. Whitehouse is a member of the Judiciary Committee as well as the Health, Education, Labor, and Pensions (HELP) Committee, Budget Committee, Environment and Public Works Committee, and Special Committee on Aging.

The recent op-ed by two Republican members of the House of Representatives argues that their efforts to impeach the IRS Commissioner are on the level. Maybe.

But when you look at how the Republican Party is paid for, Republicans have a very good reason for trying to keep their boot firmly on the neck of the IRS. Keeping an already timid bureaucracy even more intimidated has a significant strategic benefit.

There is a dirty secret to the "dark money" organizations that plague our elections: They're not supposed to be in our elections. And if the IRS were doing its job, they wouldn't be.

If we were rid of dark money, it would make the American people happier, as we are fully creeped out by the seemingly unlimited influence-buying in politics. But big special interests which make a killing off their political "investments" would not be happy at all. They might have to act out in the daylight where we can watch them; and they much prefer the dark to do their dirty work of killing climate change and campaign finance legislation, preventing Medicare from negotiating drug prices, and unleashing Wall Street from regulation.

They also prefer the Republican Party, so protecting dark money gets the full attention of Party leaders in Congress. For them, political dark money has become as important as an air hose to a deep sea diver.

How could the IRS pinch off the dark money air hose? Dark money groups organize under the authority of Section 501(c)(4) of the Tax Code, because that section lets them hide their donors. When Congress established Section 501(c)(4), it was specifically limited to organizations exclusively engaging in "social welfare" work. Electioneering for industry-friendly candidates would not qualify. But the IRS, under intense political pressure, has abandoned its role enforcing Congress's intent, and the dark money floodgates have steadily swung open. A little enforcement by the IRS of Congress's intent would close those floodgates, stemming the tsunami of slime awash in our elections.

A second method would be for the IRS to refer to the Department of Justice the question whether criminal false statements are being made. Under the False Statements Act – section 1001 of the U.S. criminal code – it is a crime to knowingly give a material false or misleading statement to the federal government. Despite this law, the same organizations report to the IRS under oath that they don't and won't engage in electioneering, and then report to state and federal election officials – also under oath – that they spend millions in elections. If that's not predication for an inquiry under the False Statements Act, then I don't know what is. But DOJ has been timorous about looking at these open and notorious discrepancies, claiming it needs a referral from the IRS.

So either by cleaning up its rules, trying some enforcement, or making a referral to DOJ, the IRS could address the dark money plague.

Republicans, faced with that threat to their money supply, have every motive in the world to keep the IRS cowed and intimidated, in a fetal crouch, fearful of doing its job for the rest of us, and wondering when the next blow will fall. Impeachment of the IRS Commissioner may be a sincere effort, based on the merits. But it's also wonderfully convenient to keeping the dark money flowing.