Thursday, May 16, 2013

Passing the buck from the IRS to the FEC to Congress

There's a new job opening at the top of the IRS. John Boehner and Mitch McConnell are calling not just for resignations, but criminal inquiries. The Op-Ed pages are full of insights about how 501 c 4s are broken, not just the IRS. In truth, these insights have been well known to those who track campaign finance and nonprofits, it just takes a scandal to make others aware.

So, now that the great secret of how broken c 4s are is on the nation's front pages - of the Times, The Wall Street Journal - it's time to ask the question some of us have been raising since January 2010 - where is the Federal Elections Commission in all this?

That's that group that (in theory) regulates campaign finance. The decision in the Citizens United case is often pointed to being at the root of the problem. (Our first clue should be the full name of the case - Citizens United v The FEC). The case opened the floodgates to 501 (c) (4)s becoming the campaign finance vehicle of choice - there have more than 4000 applications for new c4s since 2010 - few of them are the homeowners associations and sports leagues that used to dominate this class of organizations. C4s as political funding channel began with the 2010 midterm elections and made itself fully visible in the 2012 Presidential election. It is at that point that legislators (the same ones calling for IRS heads to roll) should have written rules to add FEC oversight to these organizations. The FEC is far from perfect, but at least it has experience and reporting requirements about campaign expenditures (monthly, not retrospectively as the IRS was in the position of doing)

Firing the Acting Commissioner is Washington's oldest "buck stops here" kabuki theater move. Heads will no doubt continue to roll from the IRS. The reality is, responsibility for the fiasco that are 501 (c) (4)s lies with the Citizens United decision, campaign finance rules, campaign finance overseers, and, ultimately, Congress itself.

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