Dems turn fire on conservative third-party groups' advertising

Facing a barrage of ad spending from conservative-friendly third party groups, Democrats are upping their attacks on the outside influence that threatens to drown out their messaging ahead of November's midterm elections.

Several House Democrats are demanding some of those outside ads get pulled from the airways and one senior Democratic senator wants an investigation into whether such groups are violating federal tax law.

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On Wednesday, Sen. Max Baucus (D-Mont.), the chairman of the Senate Finance Committee, penned a letter to the IRS asking it to look into whether outside groups organized as 501-c4's, 5s and 6s are in compliance with the federal tax code.

Groups like Crossroads GPS, Americans for Prosperity and Americans for Job Security, all of which have spent millions on ads in 2010, are among the targets.

At issue is whether the nonprofit groups, named for the sections of the tax code that govern them, are primarily engaged in political activity. In order to keep their donors anonymous and hold their tax-exempt status, the group's primary purpose cannot be political, according to federal law.

Still, the groups have poured millions into some of 2010's top Senate and House races, leading Baucus to question whether they're operating within the tax code.

"Recent media reports on various 501(c)(4) organizations engaged in political activity have raised serious questions about whether such organizations are operating in compliance with the Internal Revenue Code," Baucus wrote in a letter to IRS Commissioner Douglas Shulman. "These media reports raise a basic question: Is the tax code being used to eliminate transparency in the funding of our elections -- elections that are the constitutional bedrock of our democracy?"

With the millions being spent by tax-exempt groups ahead of November, Baucus said "it is time to take a fresh look at current practices and how they comport with the Internal Revenue Code's rules for nonprofits."

In Virginia, Rep. Rick Boucher (D) has gone to the mat with Americans for Job Security, a group that has spent close to $400,000 targeting the longtime Democrat with TV ads claiming Boucher votes with Speaker Nancy Pelosi (D-Calif.) 96 percent of the time.

Calling the ads "false and deceptive," Boucher demanded them pulled from the airwaves and at least one station agreed late last month and yanked the spot.

Boucher labeled AJS "a shadow group that refuses to disclose its donors."

"We don't know who's funding these ads," Boucher said. "These could be foreign interests that are hostile to the United States for all we know. And I think my constituents view with deep suspicion anyone who says, 'We're going to attack your congressman, but we're not going to tell you who we are.'"

The group has stood by its message and has targeted well over a dozen House Democrats so far this cycle and played in several high profile races, including the Massachusetts special election won by Sen. Scott Brown (R) and this year's Republican Senate primary in Colorado.

"When you have one of the most powerful Senators in the country on a political witch hunt, it's not surprising that donors want anonymity," said Stephen DeMaura, president of Americans for Job Security.

Another Democratic target is Americans for Prosperity, the group President Obama often mentions by name on the campaign trail.

"He's attacked us in each of his last seven speeches by my count," said the group's Vice President Phil Kerpen.

The president lambastes the organizations as nothing but pawns of the corporate and special interests that happen to have friendly sounding names.

“And they don’t have to say who exactly the Americans for Prosperity are," Obama said at a Democratic fundraiser last month. "You don’t know if it’s a foreign-controlled corporation. You don’t know if it’s a big oil company, or a big bank.”

It’s also part of the Democrats’ criticism of the January Supreme Court decision that lifted restrictions on unions and corporations in elections.

For his part, Kerpen says claiming the group's spending is a product of the Citizens United decision isn't accurate given that Americans for Prosperity has decided not to engage in express advocacy and rather focus on issue advertising.

"Democrats right now just aren't in a good position and because their policies have failed, they're trying to shoot the messenger," said Kerpen.

He thinks Democratic attacks against his and other third party groups reflect not just a short-term political bet that elevating the issue could work in the party's favor in 2010, but also reflect a longterm goal of discouraging major donors.

"They want to create this chilling effect," he said. "They want to give people some doubt that the anonymity protections will hold in the hopes that donors will back off."

It comes against the backdrop of yet another failure on the part of Senate Democrats to advance the Disclose Act. Before adjourning last week, Democrats fell just one vote short of advancing the measure, which would mandate stricter disclosure requirements on outside groups.

Democratic Congressional Campaign Committee Chairman Chris Van Hollen (D-Md.) led the charge for the Disclose Act in the House and has warned that outside spending from conservatives groups has stacked the 2010 deck against Democrats and firmly in favor of special interest groups.

Democrats appear convinced that they can get some political mileage from the issue before November, tying the outside spending into the party's appeal to middle-class voters.

Speaking at the National Press Club Thursday, Sen. Bob Menendez (D-N.J.) called the spending indicative of the GOP's legislative agenda.

"I assume that when you have big banks, big oil and big insurance, there is a reason why so much independent expenditure is taking place on the Republican side," he said.

-Updated at 6:20 a.m. and 11:53 a.m.