Tax-Exempt Political Groups Scrutinize New Rules

Tax-exempt groups, which can spend big money in politics, are reassessing what to do in the next election, now that the Treasury Department and the Internal Revenue Service have proposed new rules to limit the political activity of groups that qualify as 501(c)4 tax-exempt status under the tax code.

To influence the 2012 election, groups such as the conservative Crossroads GPS and the liberal Priorities USA raised tens of millions of dollars from donors whose names they weren't required to disclose. The IRS has been under investigation for inappropriately scrutinizing Tea Party groups in the last election.

Here & Now's Jeremy Hobson speaks with Dean Clancy, who leads the public policy team of FreedomWorks, the tea-party aligned 501(c)4 that advocates for small government, and to Fred Wertheimer, founder and president of Democracy 21, the campaign finance watchdog group.

Fred Wertheimer on political donations in 2012 

“We had more than $250 million spent in campaigns by 501(c)4 groups in the 2012 elections without a single dollar being disclosed of the people who were putting up the money to pay for those ads and expenditures. That’s wrong in our view; the American people are entitled to know who is financing campaign activity.”

Dean Clancy on why political donors should be anonymous

“Donor anonymity is part of our democratic process, similar to the secret ballot. And it’s true that the Supreme Court declined to knock down the disclosure provisions of McCain-Feingold in the Citizens United case, but we at Freedom Works would agree with Justice Thomas that they should have done so. Donor anonymity is an important principal for preventing intimidation of political speech.”

Clancy on what Freedom Works will do next to fight the proposed rules

“We are going to educate our members across the country that this is a direct threat and a continuation of the intimidation tactics that were used in the last election. This is not simply sunlight legislation; this is about suppressing the free speech rights of kitchen table patriots.”