In the distinctly unsexy realm of government regulation, the IRS just won something of an Oscar: Its proposed regulation to define political activity by nonprofit organizations — so-called “dark money” groups — garnered comments from more than 143,000 people and organizations when comments closed last Thursday, earning it a ranking rivaled only by the Obamacare contraceptive mandate in capturing the public’s attention.
Like the outpouring on the contraceptive mandate, which drew some 165,000 comments (nearly 250,000 if combined with another docket concerning the same issue), the voices are mostly critical. And, analysis by Sunlight’s Docket Wrench tool suggests, many of those critical comments were inspired by letter-writing campaigns by conservative nonprofit organizations that would be affected by the regulation.
The large number of comments — and the number that appeared to be the result of organized efforts — underscores how motivated politically active nonprofit organizations are to keep the IRS’ hands off of their operations. Such groups have proliferated since the Supreme Court’s 2010 decision in Citizens United gave corporations a wider berth to donate in political campaigns. Now, the IRS is proposing to circumscribe the political activities of tax-exempt nonprofits, which enable donors to contribute to campaigns in unlimited amounts and anonymously.
To put the comment tsunami in perspective, the controversial Volcker rule prohibiting financial firms from engaging in proprietary trading under the Dodd-Frank law did not crack 18,000 comments. Other proposals that regularly draw intense public outcry, though to much lesser degree, tend to involve furry animals, such as this docket proposing to remove the gray wolf from the Endangered Species Act (88,000 comments) or hot button environmental issues like the effect of fishing on ocean ecosystems (102,401 comments).
The comments on the IRS docket flowed in fast and furious up to Thursday’s deadline, with some 41,000 comments logged by the agency last week alone. There was some humor — comedian Stephen Colbert weighed in — some political firepower from members of Congress and a respectable number of overall favorable comments generated by a group of campaign finance watchdogs (including the Sunlight Foundation).
But the overwhelming number of comments Sunlight analyzed were negative, continuing the trend we have seen since the agency started accepting them. Overall, Docket Wrench helped identify more than 79,799 negative comments that included common clusters of language — suggesting they were generated by organized campaigns. That compares to more than 4,654 positive comments with common language — a ratio of more than 17-to-1.1
A look at some key clusters and their apparent points of origin.
- The National Right to Work Committee (NRWC), an anti-union group with a reported budget of more than $10 million, appears to be ground zero for more than 17,000 comments, with this alert signed by president Mark Mix. The NRWC is organized as a 501(c)4 nonprofit group — the very type of organization the IRS regulation seeks to more closely define. The group also runs a small PAC, which currently reports $60,000 cash on hand, according to Sunlight’s Real-Time FEC tracker. For years the NRWC has reported that it does not engage in political activity; however, recent emails and phone transcripts have surfaced that indicate the group had participated in mail campaigns involving state candidates in 2010, according to this January report by the Center for Responsive Politics. The letters sent to the IRS bear this common language with the alert: “I urge the Federal Government to drop [the proposed regulation] and its unconstitutional restrictions on citizen organizations, and to cease using tax laws to suppress political speech.”
- Another very large group of comments — more than 16,000 — share language with this alert from the American Family Association, a conservative Christian group that is organized as a 501(c)3 nonprofit. It was founded in 1977 by Donald E. Wildmon, a minister, and operates more than 200 radio stations nationwide as well as news outlets.
- FreedomWorks, a tea party group organized as a 501(c)4 organization, received nearly 60 percent of its $15 million in 2012 revenue from just four donors, according to a report by OpenSecrets. The FreedomWorks super PAC spent $847,000; all of its independent expenditures went to Senate races, supporting Republicans and opposing Democrats. In 2012, Sunlight broke the news that two mysterious companies gave more than half of that year’s funding for the super PAC — about $12 million.
- Other conservative groups that have encouraged their supporters to weigh in include Americans for Prosperity, the National Pro-Life Alliance, the Faith & Freedom Coalition, NumbersUSA, True the Vote and the Homeschool Legal Defense Association.
The largest effort organizing in favor of the proposed regulation — albeit with comments about to how to refine and strengthen it — appears to be campaign finance and transparency organizations such as the Sunlight Foundation itself, the Center for Responsive Politics, Common Cause, the League of Women Voters and other organizations that endorsed Public Citizen’s Bright Lines Project or conducted their own individual efforts along similar lines.
There is also some opposition from the liberal side of the nonprofit world: For example, the Alliance for Justice, which provides technical assistance for progressive nonprofits, has been critical, as has been the ACLU.
The GOP-led House has kept up the pressure on the IRS in recent weeks with a series of hearings, and last week the House voted 241-to-176 to prevent the agency from enforcing the rules. (It’s a largely symbolic move, as the total in favor was substantially less than the two-thirds vote necessary to override an almost certain veto from President Barack Obama.) The agency has been under sharp scrutiny since last year, when the agency’s inspector general issued a report charging that the IRS had targeted conservative groups for greater scrutiny than other groups.
The Sunlight Foundation has long advocated that the IRS should bring greater clarity to the definitions of political activity by nonprofit organizations.