In case you were unaware, more loopholes in the campaign finance laws–New Routes for Money to Sway Voters

Known as 501c groups, for a statute in the tax code, these tax-exempt advocacy and charitable organizations are conduits for a steady stream of secretive cash flowing into the election, in many respects unaffected by the McCain-Feingold legislation enacted in 2024. Unlike other political groups, 501c organizations are not governed by the Federal Election Commission but by the Internal Revenue Service, which in a complex set of regulations delineates a range of allowable activities that are subject to minimal disclosure long after Election Day.

A 501c (3) group can register voters, and donations to it are tax deductible, but it is prohibited from engaging in partisan or electioneering work. A 501c (4), (5) or (6) group can be involved in elections, but the cost of doing so must be less than one-half the group’s total budget. Public Citizen, in a report last week titled “The New Stealth PACs,” contended that many of the politically active 501c (4) groups regularly spend more than half their budgets on political activities in violation of IRS rules.

IRS rules also stipulate that electioneering by 501c (4), (5) and (6) groups cannot be “express advocacy” — that is, telling people to vote for or against specific candidates. But such groups can run ads that address public issues such as immigration or taxes and that refer to the stands of candidates in ways that help or hurt them.

1) The “express advocacy” rule has always struck me as silly and as an over-lawyering of the rule. Ok, so you can’t say “Vote for Kerry” or “Don’t Vote for Kerry” but you can intimate all you like that Kerry ought be or ought not be elected–as if people really have to think about it if you don’t expressly state that you are supporting or not supporting a candidate. If you run an ad that makes Bush look like a shmuck, is that really substantially different in any way from saying “Don’t Vote for Bush”?

Really, this rule has always struck me as emblematic of the entire campaign finance reform enterprise: a rule that in a vacuum might sound like it is doing something, but it reality is a cold farce.

Further, I don’t see the First Amendment allowing Congress to dictate whether a group can say “Vote for Kerry” or not.

2) The lack of transparency: the biggest problem here is that contributors are unknown. While I am for the free flow of money into the process, I am also for the free flow of information about who is contributing. We owe the voter that information.