Skip to main content

The Brief: Nov. 27, 2013

The Obama administration said on Tuesday it is taking action to curtail the growing influence of "dark money" in U.S. politics.

Lead image for this article

The Big Conversation

The Obama administration said on Tuesday it is taking action to curtail the growing influence of "dark money" in U.S. politics. But doubts arose almost immediately as to whether the new proposed guidelines would work as intended.

The new rules are intended to address the growing use of social welfare groups, referred to as 501(c)4s for where they are listed in the tax code, to spend money independently in campaigns. After the Citizens United decision by the U.S. Supreme Court that allowed for corporations to spend money directly in political campaigns, these social welfare groups became the preferred vehicle because they allowed donors to remain anonymous.

The most famous of these on the national scene is Crossroads GPS, founded by Karl Rove. But there are examples of these groups in Texas as well. The best-known are Texans for Fiscal Responsibility, which is affiliated with Michael Quinn Sullivan's Empower Texans, and the Texas Organizing Project, which has received big donations from trial lawyer Steve Mostyn.

"Administration officials described the new proposal as a response to complaints — including objections from the Treasury’s own inspector general after the Tea Party controversy — that the existing regulations were too vague, leading to inconsistent or arbitrary enforcement," reported The New York Times' Nicholas Confessore.

He added: "The final guidance could also include a more precise definition of how much political activity a 501(c)4 group is permitted to engage in while still maintaining its tax exemption. Many election lawyers and their clients use an unofficial rule of thumb: If a tax-exempt group spends less than 50 percent of its budget on political activity, then its primary purpose is not winning campaigns. Some activists have argued that a rule requiring 501(c)4s to spend no more than 15 percent of their budgets on political activities would be closer to the letter and spirit of existing law."

The Times story noted that spending by political nonprofits has soared in recent years — increasing from $5.2 million in 2006 to $300-plus million in 2012.

And that might prove the biggest problem for anyone trying to stop this "dark money." There's just too much of it, and critics say the cash will just find different conduits to enter political campaigns.

Byron Tau and Lauren French of Politico list several ways in which the new guidelines might soon be circumvented. The quickest and easiest way would be for these political nonprofits to just form different kinds of entities to spend on political races.

“If 501(c)4s become an inconvenient vehicle, I have no doubt that funders will find a different vessel and 501(c)6s and LLCs would be likely suspects,” former Federal Election Commission associate general counsel Kenneth Gross told Politico.

Other loopholes exist in the proposed guidelines, including one described in the Politico piece as a "gift to Karl Rove."

While impossible to say at this point how it will all play out, it's probably safe to say that the fight over these new guidelines will create an occasion for yet another bruising fight between Republican and Democratic partisans. And it won't be decided anytime soon. The Times noted that the final rules most likely won't be adopted until after the 2014 midterm elections.


•    Guard to allow same-sex couples to register for benefits (Houston Chronicle): "The Texas National Guard said late Tuesday it will immediately let same-sex couples register for benefits, ending a highly publicized standoff with the Pentagon. Five Texas Guard facilities, including one in Houston, that had been off limits for same-sex couples seeking benefits will begin to enroll same-sex dependent spouses in benefits programs. 'We're going to go back to business as usual,' said Lt. Col. Joanne MacGregor, a Texas Guard spokeswoman. 'It will be full service.'"

•    Jim Solis goes to prison (Valley Morning Star): "Former state Rep. Jim Solis surrendered at noon Tuesday to a minimum-security prison camp in Arkansas to begin serving a sentence for bribery that begins a partial closure to his ordeal, his attorney said. 'He and his family still have a long way to go,' Solis’ attorney, retired Judge Robert Garza, said Tuesday."

•    Judge to rule Wednesday on American-US Air merger and bankruptcy plan (The Dallas Morning News): "American Airlines Inc. and parent AMR Corp. may finally get the go-ahead Wednesday to exit bankruptcy and close their merger with US Airways Group Inc. At the very least, they’ll learn the state of the last big snag — a lawsuit that challenges the merger on antitrust grounds."

•    Abortion clinic reopens in Fort Worth (Austin American-Statesman): "Whole Woman’s Health has reopened its Fort Worth abortion clinic after an affiliated doctor gained admitting privileges in a nearby hospital, the company announced Tuesday. Of five abortion clinics owned by Whole Woman’s Health, only the McAllen facility remains closed due to a lack of admitting privileges as required by House Bill 2, the abortion-regulation law passed last summer by the Legislature."

•    Stockman should amend disclosures, experts say (Houston Chronicle): "U.S. Rep. Steve Stockman should be required to amend his congressional disclosures to clarify any of his various business affiliations and to more fully identify the entity that supplied him with all $350,000 of his recently reported income, ethics experts told the Houston Chronicle in response to an investigative story the newspaper published Sunday."

Quote to NoteTony Soprano didn’t own the pork store for the sandwiches.” — Josh Orton, the political director of Progressives United, arguing the time has come to restrict further the activity of political nonprofit groups.


Texans need truth. Help us report it.

Yes, I'll donate today

Explore related story topics

Politics Carlos "Charlie" Uresti