Paul Ryan

House Speaker Paul Ryan announces the bipartisan budget agreement on Wednesday. (Michael Reynolds / European Pressphoto Agency)

Michael Hiltzik
December 16, 2015

When Congress legislates at night and in haste, you can be sure mischief is being done. Sure enough, the budget deal announced late Tuesday by House Speaker Paul D. Ryan (R-Wis.), takes an ax to efforts to limit the torrent of big money into politics.

Two provisions buried in the 2,009-page bill — one on page 472 and the other on page 1,982 — emasculate efforts by the Internal Revenue Service and Securities and Exchange Commission to force public disclosure of donations by individuals and corporations.

These are donors who represent no one’s interests but their own, and their influence over politics and the electoral process has only grown since the Supreme Court’s wretched Citizens United decision in 2010.

It’s now poised to get even bigger, thanks to the riders’ inclusion in an omnibus budget bill that’s being handled as must-pass legislation to avoid a government shutdown. As Common Cause President Miles Rapoport said in a prepared statement Wednesday: “The omnibus proposal keeps the government’s lights on in exchange for more secret money in politics.”

Here’s how the deal protects big secret donors.

The IRS provision prohibits the agency from taking any step toward issuing a rule governing the political activities of so-called 501(c)4 nonprofit organizations. By law, these nonprofits aren’t supposed to be involved in politics at all. They’re “social welfare” organizations that by law must be devoted primarily to programs broadly serving their communities, not private groups; the category used to be limited to religious groups; cultural, educational and veterans organizations, homeowners associations, volunteer fire departments; and the like.

But they’re allowed to keep their donors secret, a benefit that made them into an all-too-tempting instrument for political contributions. Over the years, the IRS loosened its strictures on political activities by C4s, ultimately allowing them to spend money on politics as long as they kept the activity under 50%. (We tracked this evolution starting back in 2012.)

In 2013, the IRS tried to crack down on political C4s masquerading as social welfare groups. The ultimate harvest was the ginned-up IRS “scandal,” in which Rep. Darrell Issa (R-Vista) tried, and ultimately failed, to prove that the agency crackdown was focused on conservative organizations.

The real goal of the IRS attackers was to hamstring its regulation of any political C4s, which were too good a funnel for secret money. Instead, the IRS sat down to write bright-line regulations defining the permissible activities of C4s once and for all.

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