Progressive Group Comes Out Against New Proposed Rules For Dark Money

A progressive group, the Alliance for Justice, is warning that the new guidelines for dark money proposed by the Obama administration this week would “create a danger to citizen participation in our democracy.” 

So-called dark money groups are organized as tax-exempt “social welfare” organizations under section 501(c)4 of the Internal Revenue Code. As such, their primary focus cannot be political activity. But groups like Crossroads GPS have used the 501(c)4 designation in recent years to pump millions of dollars into politics while keeping their donors secret. 

On Tuesday, the Treasury Department and the Internal Revenue Service proposed new guidance that would define a new category of activity — “candidate-related political activity” — that would not count toward these group’s social welfare mission. Among the activities the agencies are proposing to include in the new category are communications made close to elections that clearly identify a candidate or party, as well as voter registration drives and get-out-the vote drives. The latter is what has prompted the Alliance for Justice to voice its concerns. 

“If [the proposed changes are] implemented, there would be no such thing as a nonpartisan election activity conducted by a 501(c)(4); it would all be considered ‘political,'” the Alliance for Justice said in a press release issued on Wednesday. “By expanding the definition of what activities are political, the rules would drastically reduce the ability of (c)(4)s to engage in nonpartisan get-out-the-vote drives, candidate questionnaires, and voter registration drives. These activities have been critical to the ability of nonprofits to influence the public policy debate on a wealth of issues.”

A national association of groups “committed to progressive values and the creation of an equitable, just, and free society,” the Alliance for Justice provides “technical assistance on legal rules” to 501(c)4 organizations. In the Alliance for Justice’s view, the attention paid to political 501(c)4s “obscures the law-abiding and legitimate work” of groups like Planned Parenthood Action Fund, Sierra Club, and the Brady Campaign to Prevent Gun Violence. Additionally, the Alliance for Justice argues, the proposed new rules will disproportionally affect smaller groups. 

“These regulations will not run 501(c)(4)s out of politics,” the group said in its press release. “Rather, the big players will hire lawyers and accountants to help them avoid the rules. Small players can’t afford this kind of assistance.  As a result, much smaller groups may well be frozen out of legitimate citizen engagement.”