The Power Of One

(Editorial cartoon by Tom Toles and published 6/21/2012 in the Washington Post. Click on image to enlarge and then please return.)

The big news this election year is the huge amount of money being generated for campaigns thanks to Citizens United. It is conceivable that $1 billion will be spent by the two presidential candidates and their supporters. Amazing.

There is this, however: at least with the SuperPACs and with the campaigns, we can learn who is paying all of this money. The FEC has pretty stringent reporting requirements. Unfortunately, that reporting is not required of the other players in this game, those who have "charitable organizations" known as 501(c)4 groups. Those donors get to hide, and certain members of Congress want it to stay that way.

Open Secrets reminded us of that after they looked at some of the reports just filed.

Ever since the Citizens United and Speechnow.org court rulings, super PACs have been at the center of debate surrounding campaign finance. But nonprofit social welfare groups actually outspent super PACs in 2010, and could do so again this year. Those groups, called 501(c)(4) organizations under a section of the tax code, can accept unlimited individual contributions without disclosing their donors and air political ads as long as their primary purpose is to advance the public welfare.

What "social welfare" means in the eyes of the IRS has not always been clear, though, and enforcement actions have been scant. However, as Roll Call reports, the IRS may be taking a more aggressive stance on 501(c)4 groups which act as de facto political committees -- a move that is facing pushback from GOP congressional leaders.

Sen. Orrin Hatch (R-UT) and ten other Republican senators sent a letter to the IRS attacking the agency's request for detailed donor information from a list of conservative nonprofits. The letter echoed a common argument for keeping contributions anonymous: That disclosure of donors could lead to their intimidation and the chilling of speech. The letter follows a speech by Sen. Mitch McConnell (R-KY).

Some argument, that. Why should donors to the 501(c)4 worry about the disclosure? Contributors to SuperPACs and bundlers don't seem to have a problem.

Even with the lack of reporting available, however, Open Secrets still managed to do an amazing job in untangling one man's interlocking network of 501(c)4 groups:

[Howard] Rich, 72, made his fortune in Manhattan real estate, but since at least the early 1970s, his passion has been libertarian politics. He decamped from the Libertarian Party in the 1980s to establish his own network of like-minded think-tanks and publishing companies.

Rich is also prominently attached to leading national libertarian groups -- he sits on the boards of directors of the Club for Growth and the Cato Institute. Yet he remains a mysterious figure, rarely interviewed and almost always several steps removed from any direct action.

Still, an examination of the publicity-shy mogul’s efforts makes several things clear. He is deeply committed to his ideological values -- willing to spend massive amounts of money to push projects even in places where he has little apparent personal or business connection. He is single-minded in his approach, willing to lash out at conservatives as quickly and as viciously as he will go after liberals. And all indications are that he believes the ends justify the means, sometimes using money as a blunt force object to get his way. ...

According to Internal Revenue Service records analyzed by the Center for Responsive Politics, from the early 2000s at least through 2010 Rich was the linchpin holding together a confusing, swirling array of political organizations -- all of them nondisclosing nonprofit groups -- that spent heavily to influence state and federal politics around the country. The constellation of organizations that operate out of a handful of Rich-related addresses is constantly changing, but some of them are well-known: Rich, in his role as chairman of U.S. Term Limits, a 501(c)(4) group under tax rules, has for years been the driving force of the movement to curtail how long elected officials can stay in office. He's also the chairman of a 501(c)(4) group called Americans for Limited Government, which spent $1.02 million in 2010 targeting Democrats running for Congress and distributed millions more to other groups.

That's just one man, a man with plenty of connections and access to plenty of cash, his own and that of others.

Go read the entire article to get the extent of Rich's influence. And then go take a walk to get your blood pressure down.