Daily Media Links 2/26: NTU: “YES” on H.R. 3865, the “Stop Targeting of Political Beliefs by the IRS Act of 2014,” Wall Street Journal: Notable & Quotable: The IRS Tax-Exempt Rule, Boston Globe: IRS proposal governing nonprofits draws fire, and more…

February 26, 2014   •  By Kelsey Drapkin   •  
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In the News

NTU: “YES” on H.R. 3865, the “Stop Targeting of Political Beliefs by the IRS Act of 2014.” 

Selectively limiting the activities of one particular type of organization is a giant thumb on the free-speech scale in favor of unions and rent-seeking special interests. There are also practical considerations; as the Center for Competitive Politics recently noted, the proposal violates the Paperwork Reduction Act (PRA) owing to “excessively low and wildly off the mark” estimates of compliance burdens. Congress should step in to uphold the PRA.  

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IRS

Comments By First Amendment Advocates on Draft Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities

Signed by: Floyd Abrams, Arthur Eisenberg (Legal Director of the NYCLU), CCP Academic Advisor Joel Gora,  Michael Meyers (President of the New York Civil Rights Coalition and former long-time member of the ACLU national board),  Nadine Strossen (former president of the ACLU),  Harvey Silverglate,  and  Bill Van Alstyne

The concerns we are suggesting, drawn from judicial limitations on campaign finance rules, are also in harmony with the pertinent structure of the Internal Revenue Code. Buckley and similar cases drew a careful and critical distinction between issue speech and electoral speech and took special precautions to protect the former. The IRC also recognizes the importance of this great divide by providing for charity work, Section 501[c][3], issue advocacy work, Section 501[c][4] and the work of political organizations, Section 527. Under the current regime, charitable groups are not allowed to engage in any political activity or any substantial lobbying activity. Advocacy groups are allowed to fulfill their mission through education, lobbying and even political activities, so long as, parallel to Buckley, support for or opposition to political candidates does not become their primary activity. Finally, groups who do have that as their primary activity are subject to the more significant regulation and disclosure provided by section 527.

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Wall Street Journal: Notable & Quotable: The IRS Tax-Exempt Rule 

It is no secret that the proposed new regulations come against the background of allegations that the Service has engaged in political favoritism in the enforcement of current guidelines for Section 501[c][4] organizations. That, of course, is one of the most serious assertions that can be made against the IRS which depends so heavily for its success upon the public’s belief that its actions are scrupulously neutral and non-partisan. The NPRM indicates that the goal is to clarify the ground rules and to “provide greater certainty and reduce the need for detailed factual analysis in determining whether an organization” meets the Section 501[c][4] criteria. . . . Of course, that is a valid concern in an area of regulation which touches so directly on rights guaranteed by the First Amendment to the United States Constitution. Vague rules are particularly suspicious in the First Amendment area, because uncertainty about the meaning of the law is a handmaiden of a chilling effect and deterrence on political speech and association. . . . But just as dangerous as vague laws in the First Amendment area are seriously overbroad ones, i.e. laws which reach well beyond the valid area of government proscription and regulation. It is our submission that particularly in this regard the key elements of the proposed new regulation are deeply deficient and will cast a pall over the vital exercise of First Amendment rights by non-profit organizations, the key constituents of “civil society” which make our democracy so vibrant.  

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Boston Globe: IRS proposal governing nonprofits draws fire  

By Kimberly Railey

“It sounds to me like the IRS is making law, not enforcing it. Leave rule-making to the buffoons in Congress,” one comment reads.   

Another puts it more bluntly: “Stick to taxes.”  

The public opposition comes from both liberals and conservatives, who are blasting draft regulations released by the Treasury Department in November that would tighten restrictions on political spending by nonprofit “social welfare’’ organizations, formally called 501(c)(4) groups under a section in the tax code.  

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The Hill: Chamber, Tea Party find common foe 

By Bernie Becker

The Chamber of Commerce is siding with the Tea Party’s efforts to stop Internal Revenue Service regulations it derides as a “stalking horse for chilling political speech.”

A Chamber official says the group plans to file “extensive comments” on the new proposed rules for tax-exempt 501(c)(4) groups, which the Treasury Department and the IRS put forward in November, after it was revealed that the IRS had given extra scrutiny to politically engaged organizations. 

Lily Fu Claffee, the Chamber’s general counsel and chief legal officer, called the regulatory push “disturbing.”

“The Obama administration’s announcement that it is looking to change the rules of the road for political speech just before the start of an important election cycle is troubling,” Claffee told The Hill in a statement.

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Wall Street Journal: Panel Seeks New Testimony by Former IRS Official Over Tea-Party Targeting 

By John D. McKinnon

A House committee is planning a showdown next week with a former Internal Revenue Service official who declined to answer questions last year about agency targeting of tea-party groups.  

The former official, Lois Lerner, appeared at a contentious hearing House Oversight and Government Reform Committee last May, soon after news broke that the IRS had targeted grassroots conservative groups for special scrutiny as they sought tax-exempt status.  

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Independent Groups

Washington Post: Priorities USA urges donors to back congressional super PACs in 2014 

By MATEA GOLD

Leaders of Priorities USA Action, the Democratic super PAC mobilizing for the 2016 White House race, are urging the group’s donors to devote their resources in the coming year to two congressional super PACS, underscoring the close alignment between the super PACs on the left.

In a memo sent to top contributors Monday, Priorities USA Executive Director Buffy Wicks declared: “No one should sit out the 2014 midterm elections, period.”

“The first battleground of the 2016 presidential campaign is the 2014 mid-term elections,” Wicks wrote in a letter obtained by The Washington Post. She urged Priorities donors to give to House Majority PAC and Senate Majority PAC, the two super PACs providing air cover for congressional Democrats.

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Politico: What ‘House of Cards’ gets wrong about money in politics  

By Byron Tau

How realistic is House of Cards? Star Kevin Spacey said this week that the show’s political story arcs “are not that crazy.”

Continue Reading

But when it comes to accurately depicting the ebb and flow of money in politics, the Netflix hit drama gets two thumbs down.

A major plot point in the second season involves a fanciful foreign conspiracy to funnel Chinese money into U.S. elections through a U.S.-based casino operator on behalf of a wealthy industrialist. The newly installed Democratic Vice President Frank Underwood, played by Spacey, gets wind of the spending and dispatched a top lieutenant to stop the tide of cash.

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Lobbying and Ethics

Huffington Post: This Law Firm Wants To Just Forgive A Half-Million Dollars Owed By A Congressman

By Paul Blumenthal

WASHINGTON — Should a prominent law and lobbying firm be able to forgive nearly half a million dollars in debt incurred by a sitting U.S. congressman for a failed mayoral campaign? The Pennsylvania Supreme Court is debating its ruling in a case that has gone on since 2008.

If the court gives the lawyers the go-ahead, that would seem to be a positive development for Rep. Bob Brady (D-Pa.). But there might be bad news buried in that good news.

The state Supreme Court is considering whether Cozen O’Connor, a major corporate law firm with a Washington lobbying shop, should be allowed to forgive $450,000owed by Brady’s 2007 campaign for Philadelphia mayor. Brady, labeled the city’s “Democratic boss” by Philadelphia magazine, hired the firm to fight a challenge to his appearance on the Democratic primary ballot. The firm won that case, although Brady lost the primary.

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State and Local

New York –– NY Daily News: Public Campaign Action Fund Rolls Its First Pro-NYS Elections Matching Fund Ad, “Liberty”

By CELESTE KATZ

Business advocacy group Unshackle Upstate apparently hopes public financing gets left on the cutting-room floor, per a statement from its executive director, Brian Sampson, who said, in part, “Wealthy special interest groups spending millions in an effort to promote taxpayer funded political campaigns is the height of hypocrisy. Forcing taxpayers to provide a blank check to candidates for their robocalls and hiring of high-priced political consultants is wasteful and won’t fix Albany’s culture of corruption.”

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New York –– WSJ: New York Assembly Speaker Silver Sounds Off on Investigation 

By Mike Vilensky

Assembly Speaker Sheldon Silver took aim on Tuesday at a New York state commission investigating public corruption that has recently issued subpoenas to lawmakers regarding their use of campaign funds to pay for personal expenses.  

“The commission has exceeded its mandate and has been engaged in a fishing expedition to intimidate legislators,” Mr. Silver said. “The state is spending a great deal of money to conduct this fishing expedition.”  

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Kelsey Drapkin

https://www.ifs.org/author/kdrapkin/

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