Sunrise (5/11/11)

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IRS TARGETS DARK MONEY GROUPS

Politico: “The Internal Revenue Service appears to have begun to enforce a tax on gifts to the non-profit organizations that were a key vehicle for anonymous politics in the last five years and had promised to play a large role in the presidential cycle, a move which could reshape the place of money in politics in 2012. … “It appears that the IRS Estate and Gift Tax team has also started paying attention to 501(c)(4) organizations,” a Los Angeles tax lawyer who has followed the issue closely, Ofer Lion, wrote in a memo to clients today. … Gifts to other political organizations are not taxable under federal law, and lawyers informally say many donors do not typically pay the gift tax — which may run as high as 35%, mirroring income tax rates — for contributions to 501(c)4s. … The IRS focus would only apply to quite large donors: the first $13,000 annually are exempt. The rest of the contributions, however, reduce a donor’s lifetime tax exemption, which stands currently at $5 million but stands to drop to $1 million in 2013, a fact which would mean a donor’s heirs lose substantially more to estate taxes, including potentially a “clawback” of money that’s already been given away back into the taxable estate.”

IN-HOUSE LOBBYISTS RISE

Roll Call: “Over the past decade, many corporations, unions and other groups spent more money on in-house teams of lobbyists, shifting away from hiring outside firms to do their advocacy. … As a result, K Street firms’ share of total lobbying spending has fallen from nearly 60 percent at the end of 2005 to just more than 42 percent last quarter, according to a CQ MoneyLine study of lobbying reports. … The shift to in-house instead of contract lobbyists, coupled with the recent financial downturn, has led to a six-year low in revenue for contract lobbying firms. Lobbying firms disclosed billing less than $356 million during the first three months of 2011 — an amount not seen since the beginning of President George W. Bush’s second term.”

DEMS RAISE DARK MONEY

Roll Call: “Democrats have railed for more than a year against the landmark Supreme Court decision that unleashed unlimited and undisclosed corporate and union dollars in political campaigns, but now they’re preparing to collect and spend this same money. … Democratic operatives are racing to organize new groups to solicit and spend millions of dollars that the Citizens United ruling allowed, gearing up to play by the same rules as Republicans regardless of whether they like those rules.”

MONITOR GROUP HIRES AG’S FORMER LAW FIRM

Boston Progressive Examiner: “The possibility of five years in federal prison for Monitor Group executives has led the controversial consulting firm to hire the prestigious–and costly–worldwide law firm Covington and Burling. … Monitor Group, a Cambridge, Massachusetts international consulting firm, has admitted it did not register as a foreign agent from 2006 to 2008, despite multi-million dollar contracts with Libya’s regime of Muammar Khadafy. … Attorney General Eric Holder left Covington and Burling to become the nation’s top law officer.  The law firm, with offices in a half-dozen foreign cities, boasts numerous former United States government lawyers in its ranks filling a list nine pages long.  Eleven Covington and Burling lawyers used to work in the White House. … Justice Department prosecutions under FARA are rare and voluntary compliance is urged.  However, occasionally a high-profile case draws enough attention that prosecution commences.  One example of a FARA conviction that may have Monitor Group CEO Mark Fuller sweating is that of a former U.S. Ambassador to the United Nations. … Mark Siljander is a former U.S. Representative from Michigan and represented the United States in the United Nations.  Siljander also worked, without registering under FARA, for an Islamic charity linked to Osama Bin Laden.”

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