For years, federal rules on political spending have been loosened, most notably by the 2010 Citizens United decision, in which the U.S. Supreme Court struck down limits on independent campaign expenditures by corporations, unions and wealthy individuals.
And in October, the court signaled its readiness to gut another part of federal campaign finance law, overall limits on contributions from individuals to federal candidates, parties and political action committees.
The good news is that rules proposed by the Treasury Department and the Internal Revenue Service would finally clamp down on political activity by tax-exempt nonprofits, which are, under IRS regulations, supposed to be devoted to promoting “social welfare.”
Political spending by such groups, referred to as 501(c)4 organizations, is way, way out of control. The Center for Responsive Politics tracked more than $300 million in spending in 2012, up from about $5.8 million in 2004. One example is Crossroads GPS, co-founded by Karl Rove, the noted Republican strategist.
In the political business, spending by 501(c)4s is called “dark money” because donors’ names can be kept confidential. The irony is that, for many years, Republicans argued for no campaign finance limits, saying that there should be full transparency instead, which would allow voters to make up their own minds about who was influencing whom. Now, Republicans want to be able to hide their donors, too.
The new rules would define political activity more precisely, specifically including “candidate-related” activities such as running television ads that mention a candidate within 60 days of Election Day. The allowable share of such activity also would be limited.
Under current practice, as long as political spending by a tax-exempt social welfare organization doesn’t exceed 50 percent of its budget, it is still considered a social welfare organization. What the IRS and Treasury have in mind is a dramatic lowering, perhaps to 15 percent, for political spending.
That would force the groups to figure out their real mission. If it is social welfare, then political activity would have to be sharply curtailed. If the mission is political, then the group could reform as a political committee or a super PAC, and report donations.
The new rules are not expected to be issued until after the 2014 elections. Conservatives are upset because the rules would not apply to labor unions, and many nonprofits are up in arms because the proposed definition of political activity would include such things as candidate forums and get-out-the-vote drives.
While there should be room for such discussions on those issues, the overriding goal must be to stop the outrageous flow of hidden money into American elections.
That would begin to counteract the dangerous combination of concentrated wealth, top earners grabbing a disproportionate share of the economic pie, and the steady erosion of campaign finance rules. Taken together, the two trends have the power to badly distort the political agenda.
For example, in a recession, it is widely held that government spending, even if it creates temporary deficits, helps stimulate recovery. But wealthy interests are far more concerned about the deficit and debt, and they have successfully stymied more stimulus programs, while advocating budget cuts that actually slow economic growth.
While it is not always true that the candidate with the most money wins, strategists agree that once you get beyond races that can be won on shoe leather alone (say, a ward race), a candidate and his or her supporters must have enough money, for television ads, mass mailings and the like, to reach voters.
In other words, you must have enough money to get into the game, or you can never win.
The other point about big money and politics is that the rarity of bribery convictions doesn’t mean the system isn’t corrupt. By supporting those they already agree with, big donors guarantee themselves a seat at the table when decisions are made. They don’t always win, but their average is a lot better than the average voter’s.
Last week’s column erred in describing Bryan Williams’ election to the state school board in 2012. He ran to fill the balance of a term.
Hoffman is a Beacon Journal editorial writer. He can be reached at 330-996-3740 or emailed at email@example.com.