Congress and the Executive Branch should focus on making the work of lobbyists and other paid influencers more transparent.
Money in Politics Disclosure
To uncover the levers of access and influence in Congress and the White House, real time online disclosure of money in politics must become the standard.
There is a wealth of government data that must be made accessible to the public.
The IRS should investigate nonprofit organizations that engage in electioneering activities and strip them of their 501(c)(4) status if they are found to have failed to have met their “social welfare” obligations. It should also reform its rules to prevent the misuse of a 501(c)(4) classification in the first place.
Nonprofit organizations spent hundreds of millions of dollars in an effort to impact the 2012 elections. By taking advantage of a provision in the tax code that allows “social welfare” organizations to maintain confidential donor lists, overtly political organizations never disclosed the names of corporations or individuals who spent millions to influence the election. In contrast, nonprofits that accurately report their mission as engaging in political activities are required to disclose their donors under section 527 of the tax code.
The IRS has so far allowed organizations to claim and maintain 501(c)(4) status, despite overwhelming evidence that they have been organized to impact the elections. The IRS must investigate such groups and redesignate them as 527s where the evidence suggests.
To prevent abuse of 501(c)(4) status in the future, the IRS must also initiate a rulemaking to clarify and limit the amount of political activity in which a group may engage. Currently, donors to 501(c)(4) organizations can remain anonymous even if as much as 49% of the organization’s total expenditures are made for political, rather than social welfare purposes. This “rule of thumb” must be replaced with a rule of law that creates a bright line making clear that only a de minimus or small percentage of a 501(c)(4)’s expenditures may be used for political purposes. Anything beyond a very small percentage of political activity must trigger disclosure requirements.