Republican SuperPACs Aren't Bringing In The Cash The Way They Used To

No more checks from Idaho fascist Frank VanderSloot unless candidates can prove their anti-American extremism

Saturday night I was driving home after dinner and I was hearing some pretty racist talk coming out of my radio. Had someone changed the preset? No, I had a local PBS affiliate on and it was the Tavis Smiley Show. He had some crackpot ant-immigrant kook on from a hate group, the California Coalition for Immigration Reform. And he interviewed her as though she were an expert and never questioned any of her racist assumptions. When she was done, he had a law professor from UCLA on as the next guest to talk about his new book about anti-black racism. What about the anti-immigrant racism Smiley had been promoting 2 minutes earlier? I'm still confused; is Tavis Smiley, a well-known liberal, into anti-immigrant bigotry? It doesn't make sense.

That's usually what you'd expect to hear on Hate Talk Radio, not on PBS. It's pretty much a Republican thing. The California Coalition for Immigration Reform sounds like a reasonable name for an organization but it's just a step or two from the KKK or a militia group, part of the Republican ever-shrinking pup tent. Over the weekend, the Washington Post took a look at how Republican SuperPACs are having trouble finding donors this year. They began with Republicans for Immigration Reform, a far more mainstream group than the California Coalition for Immigration Reform. One of the principals of the PAC, Charlie Spies, who helped raise $153 million for Romney's SuperPAC, Restore Our Future, isn't getting anywhere with Republicans for Immigration Reform. “It has been a challenge to get donors on the Republican side to reengage,” he told the Post. And it's not just because his group is viewed as more mainstream than the typical Republican Party hate groups.

Seven months after the 2012 election, a lingering hangover among conservative donors has stalled efforts by right-leaning independent groups to fill their coffers. Wealthy contributors who dashed off six- and seven-figure checks last year are eyeing super PACs and other politically active groups more skeptically, frustrated that the hundreds of millions of dollars spent to elect Romney went for naught.

“There’s donor fatigue,” said Fred Malek, a veteran GOP operative wired into high-net-worth circles. “Everyone was in a frenzy of giving up until the November elections, and then everyone was sort of worn out on the whole process. It’s very hard to raise money after an election, especially after you lose.”

Several Republican fundraisers said they remain optimistic that the money spigot will reopen as the 2014 congressional elections approach. But this time around, donors are seeking to be more judicious about where they put their money, asking groups for detailed strategy and spending plans.

“At the moment, I’m kind of in a waiting and watching mode,” said Howard Leach, an ambassador to France under President George W. Bush. In 2012, Leach gave $100,000 each to Restore Our Future and American Crossroads, the conservative super PAC co-founded by former Bush political strategist Karl Rove.

...One well-connected Republican donor and fundraiser, who has held off writing big checks to outside groups since the election, said he is among a group of top contributors now questioning the value of financing such organizations, which operate independently of candidates and party leaders.

“I do find it a little worrisome, frankly, that there’s so much more money and so few people behind it,” said the contributor, who requested anonymity to speak candidly about his misgivings. “I am concerned that all that money didn’t seem to bring results.”

Frank VanderSloot, chief executive of an Idaho nutritional-supplement company who gave abundantly to Romney and groups backing him, said he has concluded that it is not effective to finance tax-exempt advocacy groups that can only spend a limited amount on politics.

“If you can’t say what candidate you’re for, it’s hard,” said VanderSloot, who said he gave “several million” in all to various groups, including $1.1 million to Restore Our Future.

From now on, he said, he is sticking with super PACs, which have more latitude to directly engage in elections: “That’s where my money is going.”

...New conservative outfits are finding that they have to work much harder to win over donors, some of whom now hire lawyers to conduct due-diligence inquiries about the organizations soliciting their support.

“We’ve learned to ask people: ‘What is your message? Where are you going to spend the money, and how?’” said VanderSloot, who said that he also requests information about how much of a group’s budget goes to paying people running the organization. “In some cases, you may want to get that answer in writing.”

The intense scrutiny “is winnowing the field of consultants who are able to raise significant funds,” said Robert Kelner, a Washington campaign finance lawyer who heads the political law practice at Covington & Burling.

“You’re seeing more impressive business plans, on better paper with fancier graphics,” Kelner added, referring to the efforts of political groups. “They look more like the kind of proposals someone would submit to a private equity fund.”

In their pitches, many organizations are pledging to diversify their approaches and not rely as heavily on expensive television advertising as they did in the last election, when the airwaves were crowded with discordant messages. The new emphasis is on digital campaigns and get-out-the-vote organizing-- strategies that some groups expect to test this year in Virginia’s governor’s race and New Jersey’s U.S. Senate contest.

It's worth noting that big donors on the Democratic side are also keeping their powder dry but that Democratic grassroots donors are not. And the Republicans don't count on grassroots donors, only on the rich and on special interests. In the last quarter the DCCC outraised the NRCC and the DSCC outraised the NRSC. I can't mention this Inside-the-Beltway scams without reminding potential contributors that a far more effective way to give is to go to ActBlue and contribute directly to candidates who you see eye to eye with. Give to the DCCC, for example, are your money is going to wind up helping reelect anti-Choice, anti-gay, anti-family corporate shills because that's where the DCCC puts most of its money. If you want help in finding good House candidates, here's the place. And for good Senate candidates: here.

SCHEDULE NOTE -- COMING UP AT 9pm PT/12m ET:
YOUR SUPREME COURT AT WORK AND PLAY

Sorry, but for the second night in a row New York City Transit dumped me out of my no. 1 train short of home, and my normal hour-plus trip took closer to two hours (and that's with what I would describe as some highly creative alternative-route-planning; when a packed rush-hour trainful of passengers is disgorged onto a platform already teeming with passengers waiting for nonexistent trains, it's not a pretty scene), leaving me straggling home in a state of wipeout with a deadline bearing down on me, well, unbearably. Plus tonight I discover that I left the text file that contained most of the so-far-written text on my computer at work!

I realize it's outrageous to expect to be able to board a train and have it remain in service for a whopping 28 stops. (Beyond my stop, what do I care? Let them eat cake.) Last night we made it all the way to 137th Street, which is 23 stops, by my quick count; tonight, only as far as 50th Street, a mere 11 stops. Tomorrow -- well, one shudders to think! -- Ken

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The Right-Wing Noise Machine gets its "mean IRS" headline, and it's full steam ahead for flagrant 501(c)4 abuse

This isn't what happened, of course, but if you're looking for the latest and bestest in lies, where better to turn than the Right-Wing Noise Machine?

The problem wasn't that the IRS was skeptical of tea party groups registering as 501(c)4s. It's that it hasn't been skeptical of Organizing for America, Crossroads GPS, Priorities USA and Heritage Action Fund registering as 501(c)4s. The IRS should be treating all these groups equally and appropriately -- which would mean much more harshly.

Instead, the IRS has permitted 501(c)4s to grow into something monstrous. And if they cower in the aftermath of this embarrassment, it might make matters even worse. . . .

The danger is that this experience will simply make the IRS even more terrified of regulating 501(c)4s. Recall that none of the tea party groups scrutinized by the agency actually lost the 501(c)4 designation. Even at their most attentive, the IRS is treating these groups with kid gloves. Now they're going to be tempted to leave them almost entirely alone.

-- from Ezra Klein's Wonkblog post, "The IRS was wrong to target the tea party. They should've gone after all 501(c)4s."

by Ken

In the end all the IRS did was hand the liars and cheats of the Right-Wing Noise Machine a headline and a news cycle, which they will attempt to stretch into a month of news cycles. Already the world's slimiest humanoid, House Majority Leader Eric Cantor, has announced that the House will hold hearings. You can be sure that the lie-and-obfuscation foundries in the right-wing propaganda heartland are working overtime.

If you're wondering how often left or "leftish" organizations have been targeted by the IRS, without acknowledgment or apology, I'm wondering too, and I don't think we'll be getting any answers soon. Meanwhile, does anyone really doubt that the right-wing 501(c)4s exist for the purpose of flouting the spirit and probably the letter of the tax laws?

"Let's be very clear," Ezra Klein begins his Wonkblog post today. "Because the Internal Revenue Service holds so much private data, and because it can make people's lives absolutely miserable, it is of paramount importance in our political system that it both is, and is perceived as, an apolitical entity."

 If it discriminated against tea party groups that attempted to register as 501(c)4 social welfare organizations, then that's a grave offense, and it needs to be investigated thoroughly and dealt with severely.

But the particular bias people are angry about is the opposite of the bias they should be angry about. The problem wasn't that the IRS was skeptical of tea party groups registering as 501(c)4s. It's that it hasn't been skeptical of Organizing for America, Crossroads GPS, Priorities USA and Heritage Action Fund registering as 501(c)4s. The IRS should be treating all these groups equally and appropriately -- which would mean much more harshly.

Instead, the IRS has permitted 501(c)4s to grow into something monstrous. And if they cower in the aftermath of this embarrassment, it might make matters even worse.

FUN WITH "SOCIAL WELFARE ORGANIZATIONS"

Not only are "social welfare organizations" tax-exempt, Ezra points out, but "thanks to a 1958 court case, they don't have to disclose their donors." But, he says, they're not meant to be political."

A 2003 IRS document says that "organizations that promote social welfare should primarily promote the common good and general welfare of the people of the community as a whole." It goes on to give pages and pages of examples. "A corporation organized for the purpose of rehabilitating and placing unemployed persons over a stated age," for instance. Or "a corporation formed to provide a school district with a stadium." "A memorial association organized to study and develop methods of achieving simplicity and dignity in funeral and memorial services," qualifies, as does "an organization that conducts an annual festival centered around regional customs and traditions."

Nowhere does the IRS mention "an organization formed by top political operatives for the clear and obvious purpose of reelecting or defeating the president." But that's what 501(c)4s have become. According to data collected by OpenSecrets.org, 501(c)4s spent $92 million in the 2010 election. They spent $254 million in the 2012 election. That's a lot of social welfare going to the good people who live in swing states and competitive districts.

Ezra notes that in the era of superPACs it has become common for the SPACs to have 501(c)4s as well. Why? To keep donors anonymous. He quotes election-law expert Rick Hasen of the University of California at Irvine saying, "The only reason to have two of these is if you wanted to have one that allows people and entities to avoid disclosure."

Yes, says Ezra, the climate of permissiveness owes something to the Citizens United and SpeechNow decisions, which stripped away contribution limits on wealthy individuals, corporations, and unions. "But it's also the IRS's reticence to regulate the murky world of 501(c)4s -- a reticence partly attributable to the organization's fear of blow-ups just like this one."

When Karl Rove became "the first big player" to try using 501(c)4s to gather anonymous political donations, Rick Hasen tells Ezra, "A lot of people thought Rove would get smacked back by the IRS. It didn't happen. And then 501(c)4s exploded."

"NOW EVERYONE HAS A 501(c)4"

The number of 501(c)4 applications the IRS is getting more than doubled in recent years, rising from 1,500 to more than 3,400. That, by the way, is their explanation for the added scrutiny of the tea party groups: They weren't trying to look specifically at conservatives. They were just trying to separate out the organizations that seemed likely to be overly political. But that simply speaks to the underlying issue: The IRS hasn't set down clear rules -- either internally or externally -- for dealing with these new organizations.

"This is crystallizing the problem," says Sheila Krumholz, director of Center for Responsive Politics. "On the one hand we want the IRS to fulfill its oversight duties. On the other hand there's so much uncertainty about what the rules are and what they should be. What are those duties? What should they have been doing? They're saying they made mistakes. They'll be held to account for those. But the larger problem still is present."

The IRS, for instance, has ruled that social welfare groups can't be primarily political. But what does it mean to be primarily political? Right now, most groups are assuming it means spending more than half your money on political activities. But no one really knows where their money is going.

"There's no oversight," says Krumholz. "We can try and divine it based on expenditures we see. We've been doing a bit of that and finding there's a lot of disagreement between the expenditures reported to the IRS and the expenditures reported to the FEC. But even if some of the money at Priorities USA or American Crossroads GPS might arguably not be directly political, it will be supportive of their political mission. Their mission is political."

As Ezra points out, many of these groups are "clearly birthed by political parties and campaigns."

Karl Rove's Crossroads acted like a shadow Republican National Committee in the 2012 elections. Bill Burton's Priorities USA was clearly dedicated to reelecting President Obama. The idea that their 501(c)4s weren't primarily devoted to influencing American politics defies belief. And the same could be said for the tea party groups formed after the 2008 election, or the 501(c)4 created by the Center for American Progress.

His conclusion we've already read, at the top of this post:

The danger is that this experience will simply make the IRS even more terrified of regulating 501(c)4s. Recall that none of the tea party groups scrutinized by the agency actually lost the 501(c)4 designation. Even at their most attentive, the IRS is treating these groups with kid gloves. Now they're going to be tempted to leave them almost entirely alone.

"Tempted"? Sounds to me like a done deal.

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