Sen. Sheldon WhitehouseSheldon WhitehouseA guide to the committees: Senate Pruitt confirmation sets stage for Trump EPA assault Senate Dems ask DHS inspector general for probe of Trump’s business arrangement MORE (D-R.I.) chastised senior Obama administration officials on Tuesday for failing to enforce campaign finance laws during the 2012 election, which saw the rampant use of “dark money” by outside groups.
Leading a Senate Judiciary subcommittee hearing, Whitehouse pressed Obama administration officials on why they have taken no action against 501(c)(4) nonprofit groups that spent millions on political ads during the campaign. He said several of the groups earned their nonprofit status by telling the IRS they wouldn’t engage in political activities.
The Rhode Island Democrat said that the groups have seemingly broken the law by making false statements to federal authorities.
“The responsible federal agencies, primarily the IRS and DOJ, are complicit in the mockery that is made of these tax laws,” said Whitehouse.
The nonprofit groups can collect unlimited donations and are awarded tax-exempt status by promising to promote social welfare. But many 501(c)(4) organizations appear to be mostly focused on politics, sponsoring ads and contributing funds to super-PACs.
Unlike super-PACs, the nonprofit groups do not have to disclose their donors, which can be a major selling point for wealthy political players who wish to remain anonymous. Groups like Crossroads GPS, affiliated with Karl Rove, and Organizing for Action, which was created to support President Obama’s second-term agenda, have taken on the 501(c)(4) tax structure.
Whitehouse cited an investigation by ProPublica that identified 32 nonprofit groups that spent money on political races after indicating on IRS applications that they did not plan to spend money trying to influence elections.
The senator noted that the Justice Department often defers to the IRS when it comes to tax matters, but said there was still room for prosecutors to maneuver.
“I am wondering why it is that Justice Department doesn’t appear to bring any of these cases,” Whitehouse said. “Making a false statement is something that the department prosecutes all the time.”
Mythili Raman, acting assistant attorney general for Justice’s Criminal Division, said prosecuting corruption and campaign finance law violations is a high priority for the department. But since the Supreme Court’s Citizens United ruling, which allowed corporations and unions to spend unlimited funds on electioneering activities, Justice has had trouble keeping up, Raman said.
“There are real challenges to our ability to enforce the campaign finance laws,” Raman said.
Raman said “greater transparency in general” and “a more common-sense definition of what constitutes” illegal coordination between political groups and candidates is needed.
“That would aid us as prosecutors in rooting out corruption,” Raman said.
The only other senator in attendance at the hearing was Sen. Ted CruzTed CruzPerez and Ellison agree on DNC playing neutral role in primary Big Pharma must address high drug prices A guide to the committees: Senate MORE (R-Texas), who pushed back against greater regulation in the campaign finance realm. He said voters should be wary of elected politicians who want to create new rules for political speech.
“The touchstone for everything we do should be the First Amendment,” Cruz said.
The freshman senator noted that millions of dollars were spent on attack ads against him during his 2012 campaign, but said his political opponents had a right to do so.
Cruz pressed Obama administration officials on whether they believed the government could regulate political speech and force disclosure of donors.
“Does the [Justice Department] believe it’s permissible under the Constitution for the NAACP to disclose all of its members?” Cruz asked Raman, noting that the Supreme Court had ruled in the past that the group didn’t have reveal its member rolls.
Cruz also defended donors who wish to remain anonymous, arguing increased disclosure would put them at risk of political retribution.
“It is most dangerous for those who have the temerity to criticize those in power,” Cruz said.
Political spending is attracting interest from other lawmakers as well. Sen. Carl LevinCarl LevinA package proposal for repatriation Silencing of Warren another example of hyperpartisan Senate GOP going nuclear over Gorsuch might destroy filibuster forever MORE (D-Mich.), chairman of the Senate Permanent subcommittee on Investigations, plans to investigate 501(c)(4) groups that are politically active.
Whitehouse sponsored legislation last Congress that would have required groups to disclose the funders behind their political ads, known as the Disclose Act. That legislation failed to move in the Senate last year, unable to overcome a Republican-led filibuster.
Whitehouse told reporters that he wants to introduce the bill again this year with a GOP co-sponsor, though he wouldn’t say which Republicans he was talking to.
“We are waiting to see what the prospects for going forward on a bipartisan basis,” Whitehouse said. “I would rather introduce the bill with a Republican co-sponsor.”
Rep. Chris Van Hollen (D-Md.) has already introduced the Disclose Act in the House this Congress.