Tuesday, May 28, 2013


  Sherlock Holmes, seated in a plush velvet chair, smoking his pipe, turns to Dr. Watson and explains the case.  "The question no one but I can answer, Watson, is why the Internal Revenue Service workers in Cincinnati targeted certain groups to be investigated?  It is roiling all of Washington, but the answer is so elementary."

     While the current I.R.S. scandal seems to be a mystery to some, and a cause celeb for others, what happened is simple to explain and even simpler to understand.  Between 2010-2012, non-profit groups wishing to qualify for a 501 (c)(4) designation went from 1,200 applications to 3,400.  A 501(c)(4) designation is a marvelous creature.  It allows a non-profit organization to use "unlimited" amounts of money on issue ads, advocacy activities aimed at swaying voters on a specific issue or series of issues.  As long as this political activity is not the "primary" purpose of its actions, the organization can independently target any race or any issue with no restrictions on how much someone can donate and no limits on how much is spent.  The real gold of a 501(c)(4) is they can accept unlimited donations, but can keep their donors identities secret.  Do you see it yet?  Holmes does.

     Ever since the Supreme Court ruled in 2010, the Citizens United case, that there are no limits on political donations.  Super PACS rose up all over the land.  Karl Rove's Super PAC raised and spent over $300 million in 2012.  However, Super PACS have to release their list of donors.  Regressive billionaires like the Koch brothers, Sheldon Adelson, Foster Freiss and others didn't like the publicity.  They want to push their regressive agenda in secret and so they let it be known they would now give to (c)(4)'s in the future.

     In 2010, the group responsible for regulating (c)(4)'s inside the I.R.S. was in shambles.  Congress had not spelt out the definition of what constitutes "primary political engagement".  Suspicions were raised that these new (c)(4) groups were really Super PACS in different wrapping and were subverting the law.  Without a clear definition of what constitutes "primary political activity", I.R.S. workers were left to come up with ways to try and see if these applications were for genuine "social welfare" objectives.  (the reason for the existence of (c)(4)'s to begin with)  Could these applications be part of a stealth campaign to launder political donations and engage in political activity all without any scrutiny?  The workers made a poor, but understandable, decision...if you had Tea Party, good government, Patriot or other terms in your organization's name, it was highly likely you were far more interested in politics than "social welfare".  (in fact, can you think of a single project sponsored by one of these targeted groups which promoted genuine social welfare?)  They were wrong to take such a short cut, but it's easy to see why they did it.

     Yes, it's a scandal some groups were targeted for extra scrutiny while others were not.  Yes, all applications for (c)(4) status should be treated equally.  However, the I.R.S. is under staffed, due to Congress and the regressives, and trying to grapple with a law that screams for subjectivity in how it is administered.  It is under pressure to ferret out the crooks and liars (the name Rove keeps coming to mind) while processing applications in a timely manner.  It is an impossible task.

     The bigger question is why (c)(4)'s even exist?  Why should you and I subsidize these groups with our taxes?  We do not benefit in any way.  Regressives constantly scream for a new simpler tax code.  Ok, get rid of (c)(4)'s.  End the charade.  Eliminate the tax deduction for donating to those groups.  Even better, require total transparency by mandating all such organizations publish a list of their donors.  If you do that, their usefulness to the 1% ceases to exist.  If donations aren't secret, they might as well give to a Super PAC.

     Oh, BTW, the hypocrisy of regressives knows no bounds.  When the I.R.S. audited and investigated the NAACP in 2004, after its president criticized President Bush for being the first president since Herbert Hoover to fail to address the organization, no regressive voice was raised in protest.  When pressure from Exxon and other groups resulted in the targeting of Greenpeace by the I.R.S. in 2006, regressives were silent as church mice.  In 2004, the pastor of All Saints Episcopal Church in Pasadena made an anti-Bush sermon the Sunday before the presidential election.  The I.R.S. threatened to revoke its tax-exempt status.  At the same time, regressive churches all over the nation were handing out voting guides, congressional report cards and advocating for regressive candidates from the pulpit and the silence from the I.R.S. was deafening.  The crocodile tears now being shed over the shabby treatment of Tea Party and other groups is embarrassing.

     It's simple.  It's elementary.  Pass a law so all political donations are reported...total transparency.  Have someone other than the I.R.S. enforce it.  End the 501(c)(4) forever or define the terms of its use more clearly.

     The I.R.S. workers may have broken the law, but Congress and the 1% are at least accessories to the crime.

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