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Chamber, Tea Party find common foe

Lauren Schneiderman

The Chamber of Commerce is siding with the Tea Party’s efforts to stop Internal Revenue Service regulations it derides as a “stalking horse for chilling political speech.”

A Chamber official says the group plans to file “extensive comments” on the new proposed rules for tax-exempt 501(c)(4) groups, which the Treasury Department and the IRS put forward in November, after it was revealed that the IRS had given extra scrutiny to politically engaged organizations. 

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Lily Fu Claffee, the Chamber’s general counsel and chief legal officer, called the regulatory push “disturbing.”

“The Obama administration’s announcement that it is looking to change the rules of the road for political speech just before the start of an important election cycle is troubling,” Claffee told The Hill in a statement.

Unlike many Tea Party organizations, business groups like the Chamber wouldn’t be covered under the IRS’s new proposed rules, because they aren’t registered as 501(c)(4)s.

But the Obama administration is seeking comment on the possibility of expanding the rules to groups with different tax exemptions, alarming the Chamber and other trade associations that have long fought to keep their donors secret. 

Claffee said the Chamber is “always concerned whenever the government seeks to squelch political speech through regulation.”

The common opposition to the IRS rules could help ease the lingering tensions between business lobbyists and conservative groups over last year’s government shutdown.

A number of conservative groups are mobilizing against what they call “draconian” regulations meant to “muzzle” the Tea Party, and House Republicans are teeing up a series of votes this week that tap into grassroots anger against the IRS. 

The House schedule includes a measure from Ways and Means Committee Chairman Dave Camp (R-Mich.) that would delay the IRS rules for a year.

On top of that, Camp on Monday threatened to subpoena the IRS, insisting the agency hadn’t produced enough requested emails from Lois Lerner, the public face of the targeting controversy.

The House GOP’s campaign arm is getting into the act as well, sending Monday releases to the districts of more than three dozen Democrats seeking reelection, asking whether those incumbents would stand with constituents who “deserve protection from abusive federal agencies like the IRS.”

The proposed rules, which would govern groups on both the left and the right, are not expected to take effect before the 2014 elections. If implemented, they would affect a set of organizations that kept their donors secret while spending more than a quarter billion dollars combined in the 2012 cycle. 

So far, the Obama administration has received more than 66,000, largely negative comments on the proposed rules, with the public able to weigh in through Thursday. 

John Koskinen, the IRS commissioner, has said it would take a significant chunk of time to wade through the comments, and he expects to hold a public hearing on the rules. 

Under the regulations, 501(c)(4) groups would not be able to count “candidate-related political activity” toward their stated mission of improving the social welfare, activities which include advertisements or releases that identify a political party or candidate within 60 days of a general election or 30 days of a primary election. 

Get-out-the-vote and voter registration efforts would also be considered candidate-related actions, although the Obama administration says it’s seeking input on how much social welfare work a 501(c)(4) should be engaged in while holding that tax exemption.

Other business groups say they’re not weighing in for now, even though some suggested the Chamber is pressuring them to do so.

“We know it possibly could affect us, but it’s not right now,” one trade association lobbyist said. “So there’s no reason for us to go out on a limb.”

Matthew Haller, a spokesman for the International Franchise Association (IFA), says his group is deeply worried about the implications of the new IRS rules, even if it’s not willing to file an official comment with the IRS.

“The notion that we could somehow be in violation of this rule if we speak to our members within the 60-day window before an election about an issue is a significant concern, and it’s a clear restriction on speech,” Haller said.

“That’s what trade associations exist for — to represent the interest of our members to government agencies and officials, and speak to our members about what elected officials are doing.”

The rules have split more left-leaning groups, with unions and the American Civil Liberties Union expressing concern about the proposals and campaign finance advocates urging the Obama administration to press ahead. 

Like trade groups, unions could also be covered if the rules were broadened to other tax exemptions, and Republicans complain it’s unfair for labor groups to be excused from the rules right now.

One labor official fully expected unions to file their own comments to the IRS.

“The current proposal doesn’t recognize that the organizations are very different in terms of why they were formed and the role they play,” the official said.

Groups such as Americans for Prosperity and Tea Party Patriots are urging their followers to lend their voice in opposition to the rules, with the regulations sure to be a topic at a five-year anniversary event for the Tea Party this week. 

The Tea Party Patriots, which recently called for the ouster of Speaker John Boehner (R-Ohio) over this month’s debt-limit vote, are also calling for activists to contact newspaper editors and lawmakers about the rules. A sample message says the rules would be a “blatant attempt to legalize the illegal discrimination and oppression of the American citizen’s right to freedom of speech.”

“I don’t want this for anyone,” Jenny Beth Martin, co-founder of the Tea Party Patriots, said when asked about groups like the Chamber adding to the comments. “I don’t think an organization that’s diametrically opposed to what the Tea Party Patriots stands for should go through this.”

 

Megan R. Wilson contributed.