That didn’t take long.
Just hours after the launch Friday of two new Democratic Super Pacs designed to keep President Obama in the White House and counter deep-pocketed GOP groups who helped Republicans win control of the House in 2010, a prominent watchdog group announced plans to file a complaint against them with the IRS.
The two new groups, Priorities USA and Priorities USA Action, were formed by former Obama White House aides Bill Burton and Sean Sweeney to take advantage of the Supreme Court’s Citizens United ruling last year and will collect unlimited funds — with the goal of $100 million — from corporations and unions. Only one of the two groups will disclose their donors to the Federal Election Commission.
The groups aim to mimic the example of Karl Rove’s American Crossroads and American Crossroads GPS, the groups that poured tens of millions of dollars in Congressional races to help Republicans win control of the House in 2010.
Priorities USA, like Crossroads GPS, was formed as a 501(c)(4) organization in order to provide donors with the opportunity to make secret contributions that the organization will spend to influence federal elections. These types of nonprofits do not have to disclose their donors, but watchdog groups argue that they are violating IRS law that requires 501(c)(4) groups to devote most of their activities to another purpose, not simply collecting and spending money to elect or defeat candidates for federal office.
A month before last year’s election, Democracy 21 and the Campaign Legal Center sent a letter to the Internal Revenue Service asking for an investigation of whether Crossroads GPS is violating its tax status because it “has a primary purpose of participating in political campaigns in support of, or in opposition to, candidates for public office.”
Democracy 21 and the Campaign Legal Center expect to send a similar letter to the IRS “in the near future asking for a similar investigation of whether Priorities USA” is violating its 501(c)(4) tax status for the same reasons, Wertheimer said in a release Friday.
“Democracy 21 strongly opposes the practice of tax-exempt groups being used as conduits to spend secret contributions to influence federal elections,” he said. “…History has shown us that secret contributions in American elections are a formula for scandal and corruption.
In 2010, more than $135 million in secret contributions were “laundered” into the congressional races through tax-exempt organizations, Wertheimer said.
“Absent any new disclosure requirements or better enforcement of existing laws by the IRS and the FEC, the amount of secret contributions will dramatically increase in the 2012 presidential and congressional elections,” he continued.
Last week, Wertheimer, the Campaign Legal Center and other watchdog groups joined Rep. Chris Van Hollen (D-MD) in filing suit in federal court, as well as a petition with the FEC, that aims to force business associations and nonprofit groups to disclose secret contributions.
The legal steps came in the wake of news that the Obama administration is circulating a draft executive order requiring contractors to disclose contributions made to nonprofit groups and trade associations. Although uncoordinated, the lead of the executive order and the lawsuit show just how determined some Democrats are in overturning elements of the Citizens United decision before the 2012 election shifts into high gear.
Earlier Friday, American Crossroads spokesman Jonathan Collegio seized on the launch of the Priorities groups, slamming Democrats for blatant hypocrisy in mirroring the fundraising tactics they were so critical of just six months ago.
Advocates for cleaner elections immediately pushed back. David Donnelly, national campaigns director for the PublicCampaign Action Fund, a group that focuses on highlighting the influence of money and special interests in politics, said Democrats are simply playing by the rules as they are, not as we wish they were.
“To act otherwise after Citizens United is to take a knife to a gunfight,” Donnelly said.
Collegio also called out “good-government groups” challenging them to take a position on the new Democratic committees taking advantage of the post-Citizens United brave new fundraising world or put their own non-partisan tax-exempt status in question.
Wertheimer and several other watchdogs said they have a long history of filing complaints against both Republican and Democratic groups, including a 2004 complaint with the FEC against a Democratic 527 group that led to severe FEC fines.
“This move may cause the biggest ordeal for the so-called ‘good government’ groups who publicly called for IRS and FEC investigations of conservative groups last year,” he said. “To maintain their own ‘nonpartisan’ tax exempt status, will these groups call for investigations of the new non-disclosing liberal efforts?”
Guess he got his answer.
