Strassel: The Really Big Money in Politics

While the IRS goes after 501(c)(4)s for such "political activities" as voter registration drives, many wonder why the agency isn't turning its immense firepower on 501(c)(5)s — organized unions that spent $4.4 billion on politics between 2005 and 2011 alone and are the "biggest, baddest, 'darkest' spenders of all" on politics, reports Kimberley Strassel @ the WSJ.

When he recently took to the Senate floor to berate the billionaire brothers Charles and David Koch for spending "unlimited money" to "rig the system" and "buy elections," the majority leader clearly meant to be condemning unions. ...

Unions, as 501(c)(5) organizations, are technically held to the same standards [as 501(c)(4)s] against coordination with political parties. Yet no Democrat or union official today even troubles to maintain that fiction. Hundreds upon hundreds of the delegates to the 2012 Democratic convention were union members. They were in the same room as party officials, plotting campaign strategies. The question therefore is how much of that $4.4 billion in union spending was at the disposal of the Democratic Party—potentially in violation of a bajillion campaign-finance rules? ...

As for Mr. Reid's complaint that some "rig the system to benefit themselves," that was undoubtedly a reference to the overt, transactional nature of union money. Nobody doubts the Kochs and many corporations support candidates who they hope will push for free-market principles. Though imagine the political outcry if David or Charles Koch openly conditioned dollars for a politician on policies to benefit Koch Industries?

In the past months alone, unions demanded an exemption to a tax under ObamaCare; the administration gave it. They demanded an end to plans to "fast track" trade deals; Mr. Reid killed it. They wanted more money for union job training; President Obama put it in his budget. Everybody understands—the press matter-of-fact reports it—that these policy giveaways are to ensure unions open their coffers to help Mr. Reid keep the Senate in November. The quid pro quo is even more explicit and self-serving at the state level, where public-sector unions elect politicians who promise to pay them more. If the CEO of Exxon tried this, the Justice Department would come knocking. The unions do it daily.

The unions have had a special interest in funding attacks on conservative groups, since it has led to the IRS's regulatory muzzling of 501(c)(4) speech. Under the new rule, conservative 501(c)(4)s are restricted in candidate support; unions can do what they want. Conservative groups are stymied in get-out-the-vote campaigns; unions can continue theirs. Conservative outfits must count up volunteer hours; not unions.

So now, in addition to a system in which organized labor spends "unlimited money" to "rig the system to benefit themselves" and "buy elections," (to quote Mr. Reid), Mr. Obama's IRS has made sure to shut up anyone who might compete with unions or complain about them.

Strassel: IRS Targeting and 2014

"President Obama and Democrats have been at great pains to insist they knew nothing about IRS targeting of conservative 501(c)(4) nonprofits before the 2012 election," writes Kimberley Strassel at the WSJ. "They've been at even greater pains this week to ensure that the same conservative groups are silenced in the 2014 midterms."

That's the big, dirty secret of the omnibus negotiations. As one of the only bills destined to pass this year, the omnibus was—behind the scenes—a flurry of horse trading. One of the biggest fights was over GOP efforts to include language to stop the IRS from instituting a new round of 501(c)(4) targeting. The White House is so counting on the tax agency to muzzle its political opponents that it willingly sacrificed any manner of its own priorities to keep the muzzle in place.

...my sources say that throughout the negotiations Democrats went all in on keeping the IRS rule, even though it meant losing their own priorities. In the final hours before the omnibus was introduced Monday night, the administration made a last push for IMF money. Asked to negotiate that demand in the context of new IRS language, it refused.

Strassel points out that unions will have no such restrictions on their political activities.

And an IRS rule that purports to—as Mr. Werfel explained—"improve our work in the tax-exempt area" completely ignores the biggest of political players in the tax-exempt area: unions. The guidance is directed only at 501(c)(4) social-welfare groups—the tax category that has of late been flooded by conservative groups. Mr. Obama's union foot soldiers—which file under 501(c)(5)—can continue playing in politics.

Strassel reports that Cleta Mitchell, an attorney representing targeted tea party groups, has filed a Freedom of Information Act request with Treasury and the IRS "demanding documents or correspondence with the White House or outside groups in the formulation of this rule." Treasury has already said it won't comply until April, after the rule's comment period closes; and IRS has not responded at all.

House Ways and Means Chairman Dave Camp (R., Mich.) "has now authored stand-alone legislation to rein in the IRS, though the chance of Majority Leader Harry Reid (D., Nev.) allowing a Senate vote is approximately equal to that of the press corps paying attention to this IRS rule." Concludes Strassel:

So that puts a spotlight on newly sworn-in IRS Commissioner John Koskinen, who vowed during his confirmation hearing to restore public trust in the agency, and now must decide whether to aid in a new and blatantly political abuse of IRS powers. The White House is using the agency to win an election this fall. They gave the proof this week.

Obama 'Legalizes' IRS Abuse of Tea Party Groups

Attorney Cleta Mitchell, who represents several conservative organizations abused by the IRS, told attendees at the Institute's 2013 summer DC Intern Seminar:

I'm not surprised that the agents in the IRS decided it was completely appropriate to single out and target, terrorize, and harass conservative organizations. I think we will learn — because I've had enough conversations with conservative and tea party leaders around the country who were visited by the FBI ... I think it will come out at some point that the FBI classified the tea party groups as domestic terrorists, or at least were investigating them to see if they were domestic terrorists.

Yesterday, in an article titled IRS Targeting, Round Two, Kim Strassel @ Wall Street Journal wrote that the Obama "Treasury and IRS are back at it — this time in broad daylight."

In the media blackout of Thanksgiving week, the Treasury Department dumped a new proposal to govern the political activity of 501(c)(4) groups. The administration claims this rule is needed to clarify confusing tax laws. Hardly. The rule is the IRS's new targeting program—only this time systematic, more effective, and with the force of law.

That this rule was meant to crack down on the White House's political opponents was never in doubt. What is new is the growing concern by House Ways and Means Committee investigators that the regulation was reverse-engineered—designed to isolate and shut down the same tea party groups victimized in the first targeting round. Treasury appears to have combed through those tea party applications, compiled all the groups' main activities, and then restricted those activities in the new rule.