https://en.m.wikipedia.org/wiki/Dark_money
Legislative and regulatory proposals and debate over dark money Edit
Democrats in the United States Congress have repeatedly introduced the DISCLOSE Act, proposed legislation to require disclosure of election spending by "corporations, labor unions, super-PACs, and, most importantly, politically active nonprofits."[54] The 2014 version of the DISCLOSE Act would require covered groups, including 501(c)(4), to reveal the source of election-spending donations of $10,000 or more.[54] The bill also targets the use of pass-through and shell corporations to evade disclosure by requiring that such groups disclose the origin of contributions.[54] Senate Republicans, led by their leader Mitch McConnell, "have blocked earlier iterations of the DISCLOSE Act since 2010."[54]
According to Columbia Law School's Richard Briffault, disclosure of campaign expenditures, contributions, and donors is intended to deter corruption.[55]
The Federal Election Commission (FEC), which regulates federal elections, has been unable to control dark money. According to the Center for Public Integrity, FEC commissioners are voting on many fewer enforcement matters than in the past because of "an overtaxed staff and commissioner disagreement."[16] The IRS (rather than the FEC) is responsible for oversight of 501(c)(4) groups.[16] The IRS "found itself ill-prepared for the groundswell" of such groups taking and spending unlimited amounts of money for political purposes in the wake of the U.S. Supreme Court's decision in Citizens United v. Federal Election Commission in 2010.[16] The agency particularly "struggled to identify which organizations appeared to be spending more than the recommended 50 percent of their annual budgets on political activities—and even to define what 'political spending' was."[16] When the IRS began looking at nonprofit spending, it was accused of improper targeting in a 2013 controversy.[16]
"With the FEC and IRS duly sidelined" advocates for disclosure turned to the Securities and Exchange Commission (SEC); nine academics from universities across the U.S. petitioned the SEC in August 2011 for the agency to "develop rules to require public companies to disclose to shareholders the use of corporate resources for political activities."[16] The petition received over a million comments in the following month, "a record amount for the SEC, with the overwhelming majority of voters asking for better disclosure."[16] According to Lucian Bebchuk, a Harvard professor of law, economics, and finance who helped draft the petition, the request had drawn the support of "nearly a dozen senators and more than 40 members of the House."[16] Under current SEC regulations, public corporations must file a Form 8-K report to publicly announce major events of interest to shareholders.[56] The Sunlight Foundation, a group which advocates for a comprehensive disclosure regime, has proposed that the 8-K rule should be updated to require that aggregate spending of $10,000 on political activities (such as monetary contributions, in-kind contributions, and membership dues or other payments to organizations that engage in political activities) should be disclosed and made publicly available via the 8-K system.[56]
In 2015, Republicans in Congress successfully pushed for a rider in a 2015 omnibus spending bill that bars the IRS from clarifying the social-welfare tax exemption to combat dark money "from advocacy groups that claim to be social welfare organizations rather than political committees."[57] Other provisions in the 2015 bill bar the SEC from requiring corporations to disclose campaign spending to shareholders, and a ban application of the gift tax to nonprofit donors. The Obama administration opposed these provisions, but President Obama eventually acceded to them in December 2015, with the White House declining to comment. The nonpartisan Campaign Legal Center said in a statement that the dark-money provision ensures "that the door to secret foreign dollars in U.S. elections remains wide open through secret contributions to these ostensibly 'nonpolitical' groups that run campaign ads without any disclosure of their donors."[57]
The Center for Competitive Politics (CCP), chaired by former FEC chairman Bradley A. Smith, opposes legislation to require the disclosure of dark-money groups, saying: "Our view is that many people will be driven out of politics if they are forced to disclose their names and their personal information. The purpose of disclosure is to help people monitor the government, not for the government to monitor the people."[16] The Center for Competitive Politics views "dark money" as a pejorative term, stating that the phrase "evokes an emotional, fearful reaction" and contending that "many of the statistics published on the topic aim to mislead rather than enlighten."[58] The CCP maintains that dark money "comprises a very small percentage of total campaign spending," calculating the percent of money spent in federal elections by organizations that did not provide itemized disclosure of their donors as 4.3% in 2012 and 3.7% in 2014.[58]
In May 2019 the Attorney General of New York, Letitia James, filed a lawsuit against the Treasury Department and the IRS for failing to respond to information requests about their guidance reducing donor disclosure requirements for certain tax-exempt groups.[59]