“Attack Of The 501(c)Whatevers” Dominates Politoco-Media

President Obama says the U.S. Chamber of Commerce is taking money from overseas corporations; conservative advocacy groups such as American Crossroads and Americans for Prosperity are spending record sums, and no one is the wiser as to the origins of the money.

In either occurrence, whether one takes the point of view that the ads are attacks, or a common defense of the American economic ethic, the electorate is enduring an onslaught of innuendo and partisanship unparalleled since the Theodore Roosevelt Administration and the advent of controls on campaign spending early in the 20th century.

Under the 501(c)4 Tax Code subsection, a civic organization may spend to its heart's content on electioneering, so long as the candidate so supported does not receive any of the money used to do so.

At the same time, no one has the right to know just where that money was solicited or who may have made the donations under the current law and the holding of Citizens United v. Federal Election Commission. It represents a complete shift in the funding paradigm.

Said President Obama over the weekend, “Right now all around this country there are groups with harmless-souding names like Americans for Prosperity, who are running millions of dollars of ads against Democratic candidates all across the country. And they don't have to say who exactly the Americans For Prosperity are. You don't know if it's a foreign-controlled corporation. You don't if it's a big oil company or a big bank.” That organization was founded by David Koch, a multi-billionaire, and his brother, Charles.

The Democratic National Committee began airing ads over the weekend that such news organizations as “The Washington Post” and “The New Yorker” termed as “attacks” on The U.S. Chamber of Commerce. They call the chamber “shills for big business” and accuse that organization of taking money from foreign corporations.

“Tell the Bush crowd and the Chamber of Commerce: Stop stealing our democracy,” said one of the ads.

Truly, Americans For Prosperity has made record high media buys, and American Crossroads and its related organization, Crossroads GPS have spent more than $3.4 million in 24 Congressional districts attacking Democratic incumbents – more than $3 million more than the next biggest spenders, excluding the National Committees of the two major political parties.

Prominent Bush Administration insiders with ties to the Crossroads group such as Presidential adviser Karl Rove and Ed Gillespie, former Republican National Committee chief, spoke out in retaliation.
Said Mr. Rove, who spoke on a weekend talk show, there is “not one shred of evidence to back up that baseless lie.”

“Don't accuse those who are playing by the rules of somehow doing something that is unethical or illegal,” said Mr. Gillespie in an appearance on “Face The Nation.”

A White House spokesman countered their allegations, saying “The President is making a disclosure argument. He's just saying for the good of democracy the chamber should disclose where it is getting its money and how it is financing these ads, and that all organizations should.”

Had the Democratic-sponsored DISCLOSE Act passed, the organizations would have been required to do so. After passing the House of Representatives, the measure succumbed to a Senatorial filibuster and died an ignominious death on the floor of that chamber.

“It's very clear that current laws are not up to ensuring that this doesn't happen,” said Meredith McGehee, policy director at the nonpartisan Campaign Legal Center. “It's one of the reasons that you'll continue to see these types of accusations, which are really one of the most volatile accusations you can make during an election.”

According to Open Secrets.org, the candidates opposed in media buys by American Crossroads this past week were:

$720,000 opposing Sen. Michael Bennet (D-Col)
$600,000 opposing Alex Giannoulias, demo senate candidate in Illinois
$500,000 opposing Sen. Patty Murry (D-WA)
$400,000 opposing Robin Carnahan, demo senate candidate in Missouri
$346,000 opposing Sen. Harry Reid (D-NV)
$267,000 opposing Rep. Joe Sestak, (D-PA)
$246,000 supporting Marco Rubio, GOP senate candidate in Florida
$230,000 opposing Jack Conway, demo senate candidate in Kentucky
$87,000 Lee Irwin Fisher, demo senate candidate in Ohio

The 501(c) not-for-profit civic organizations are not limited to political ideology. Just so long as the club does not do electioneering as its primary purpose, it's free to spend all it may care to spend.

Such outfits so organized include 26 different types of civic organizations, such as 501(c)(21) black lung benefits trusts; 501(c)(13) cemetery companies; and international sports competition groups organized as not-for-profit corporations declaring tax exemption under the 501(c)3 election available in the Tax Code.