House votes down amendment that would empower IRS to rein in dark money groups

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Yesterday, the House of Representatives voted down an amendment to the financial services and general government appropriations bill that would’ve boosted the IRS’ ability to regulate political dark money and rein in unaccountable spending on elections.

The omnibus budget legislation passed in December included a rider preventing the IRS from rulemaking on 501(c)(4) nonprofit groups, tax-exempt, “social-welfare” organizations that can engage in some political activity without having to disclose its donors. These groups are increasingly used to spend money from undisclosed sources on political activity, like TV ads, and some spend almost all their funds on politics despite rules against this. The IRS has been “deeply wounded” since the 2013 Tea Party targeting scandal, and rarely acts to curb political activity by these nonprofits.

The failed amendment, introduced by Rep. Xavier Becerra, D-Calif., would have reversed this rider, allowing the IRS to continue its rulemaking process on tightening regulation of dark money groups. With dark money spending on the 2016 election reaching almost $37 million already, empowering the IRS to regulate this activity is more necessary than ever.

During 10 minutes of debate all divided by party lines, Becerra’s remarks began by saying “secret money is killing our democracy.” While Republicans, led by Florida Rep. Ander Crenshaw, opposed the amendment, citing how the IRS previously handled of politically active nonprofits, stating “they made a real mess of it.”

The amendment failed by a vote of 183 to 239.

The House has been busy this year when it comes to action— or some might say inaction — on dark money. A recent bill, which was introduced by Rep. Pete Roskam, R-Ill., would eliminate a requirement that nonprofit organizations report their donors to the IRS (information that is never made public), a measure which Sunlight and several other good government groups oppose. IRS access to nonpublic disclosure is a key tool to eliminate fraud and the influence of foreign money on elections. The bill passed the House on June 14.