Groups backed by secret donors take the lead in shaping 2016 elections

Published July 15 2015

WASHINGTON — The latest television ad touting GOP presidential contender Sen. Marco Rubio, R-Fla., proclaims that he is "leading the fight" to stop President Barack Obama's nuclear deal with Iran.

"Lessons of history are that evil is either confronted and defeated, or it grows," Rubio says sternly, standing in front of a giant American flag.

But the new spot, which hits the airwaves today, is not the work of his official campaign or even his allied super PAC. It was paid for by the Conservative Solutions Project, part of a crop of politically active nonprofit groups that are taking on new prominence in the 2016 elections.

These tax-exempt groups — which can keep their donors secret even as they sponsor hard-hitting ads — are being increasingly embraced by campaign operatives looking for new ways to influence the political environment.

While such "social welfare" organizations are not supposed to be primarily focused on elections, they face little oversight from a deadlocked Federal Election Commission or the Internal Revenue Service, whose effort to issue new rules governing their political activity has stalled.

In the absence of such scrutiny, political nonprofits are poised to take on their biggest role yet in the coming federal elections. The Republican opposition group America Rising announced Tuesday that it has launched a new nonprofit called AR2, which will focus on researching liberal groups and policies, along with a state-based affiliate in Missouri. Supporters of Senate Majority Whip John Cornyn, R-Texas, announced a new Senate-focused nonprofit this week called Our Next America.

And eight Republican White House hopefuls already have aligned tax-exempt organizations, set up under section 501(c)(4) of the tax code.

"It's pretty clear that politically wise candidates and political operatives aren't feeling any particular constraints on their financial behavior," said Marcus Owens, who ran the IRS's exempt organizations division for a decade.

The lack of action by the FEC and IRS has prompted Sen. Sheldon Whitehouse, D-R.I., to call on the Justice Department to intervene. In a letter he plans to send today, Whitehouse urges Attorney General Loretta Lynch to investigate possible false statements made by tax-exempt groups about their political activity, according to a copy provided to the Washington Post.

"The IRS has basically defanged itself and it's going to be too timorous to go into this area," Whitehouse said in an interview. "When the front-line agencies break down, my view is the Department of Justice has a backstop responsibility to try to prevent the utter lawlessness we see now."

However, any crackdown on political nonprofits is sure to provoke heated protests from conservatives, particularly after the recent IRS scandal in which agency employees used inappropriate criteria to single out tax-exempt groups for extra scrutiny.

Supporters of limited regulation argue that there is an important value in allowing anonymous donations.

"You're going to get speech you don't get otherwise," said David Keating, president of the Center for Competitive Politics. "There are going to be people willing to fund speech who want to change government policy, and they won't fund an organization if they are going to be tied publicly to it."

Tax-exempt groups such as the National Rifle Association and the Sierra Club have long been active politically. But there was a dramatic proliferation in such activity after the Supreme Court's Citizens United decision, which freed nonprofits and other corporations to spend money on independent campaign activity.

And this presidential race has seen a new twist: nonprofits aligned with particular White House contenders.

The most prominent so far is Conservative Solutions Project, whose founders include J. Warren Tompkins, a South Carolina political operative who is running the similarly named pro-Rubio super PAC, Conservative Solutions PAC.

The nonprofit has raised $15.8 million since launching in 2014, giving it a war chest roughly the same size as that of super PAC. In recent weeks, it has taken the lead in promoting Rubio on the airwaves in a national television buy. Last year, the group quietly financed a study of voters in key presidential states.

Jeffrey Sadosky, a spokesman for both organizations, said they have distinct missions. The nonprofit is "not about any one candidate or elected office," he said. "It's about how to try to push along conservative ideas."

But so far, the two ads run by the project have been focused on Rubio, highlighting his opposition to the Obama administration's approach on Iran while stopping short of calling for voters to back him. Nonprofits have wide berth to run such so-called "issue ads," which do not count as political activity.

Alex Conant, a spokesman for Rubio, did not say whether the U.S. senator believes the group should disclose its donors.

"Marco Rubio believes in freedom of speech," he said. "Independent groups that follow the law have a right to free speech."

A tax-exempt group supporting former Florida Gov. Jeb Bush, called Right to Rise Policy Solutions, has taken a different tack. The organization, which is expected to have a much smaller budget than the group aligned with Rubio, is financing policy research that it plans to post online.

Set up in Arkansas by Bush ally Bill Simon, the group is now being run by David Johnson, a former executive director of the Florida Republican Party.

So far, there are not similar candidate-aligned nonprofits on the Democratic side. A tax-exempt arm of Priorities USA Action, the super PAC backing Hillary Rodham Clinton, was disbanded after the 2012 elections, and there are no current plans to resurrect it.

But a network of liberal tax-exempt groups such as Media Matters for America, American Bridge and America Votes is in place to bolster the eventual Democratic nominee.

There are no signs that the IRS will take steps to rein in activity of political nonprofits before the 2016 elections. The Treasury Department had to yank a new regulation it proposed in 2013 after groups across the political spectrum complained it was too broad.

Erin Donar, a Treasury spokeswoman, said the proposal had received a record 150,000 comments.

"Treasury and the IRS are carefully considering the issues raised in the comments as part of the ongoing rulemaking process," she said.