501(c) nonsense

George Scoville Media Strategist
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An honest election-year appeal from a zealous campaign finance reform candidate would sound something like this: “If you send me to Washington, I promise to make it more difficult and expensive than it is now to remove me when I inevitably betray you!” But since Mitt Romney’s campaign out-raised President Obama’s re-election campaign by $35 million in June 2012, after Obama 2012 raised only $39 million in May 2012 (approximately $270 million cycle-to-date; that’s not only off-pace to reach his $750 million total haul in 2008, but puts him far short of his present $1 billion goal), the “secret money” knives are again coming out in campaign finance warfare. The left’s latest targets are 501(c)(4) nonprofit groups, for which it is lawful to raise unlimited sums from anonymous donors, and to spend unlimited sums on issue ads (relative to Internal Revenue Service compliance requirements).

Take, for example, a recent blog post by New York Times editorial board overseer Andrew Rosenthal, who opines, complete with a Koch brothers dog whistle, that “501(c) mischief” will be to blame for any electoral misfortune Dear Leader may suffer this fall — never mind the president’s now-infamous “one-term proposition” on righting the economy, his betrayal of the anti-war left, or his broken-record responses on unemployment figures. Rosenthal directly attacks Crossroads GPS, preemptively blaming the 501(c)(4) sister organization to the American Crossroads super PAC for a yet-to-be-determined political outcome. (You’ll be tickled to know that just over a week after Rosenthal’s screed, Crossroads GPS announced a $25 million swing-state ad buy that takes the president to task for his perpetual victimhood in the face of ongoing national crises.)

Rosenthal says the $100 million that Crossroads GPS plans to spend this cycle, raised from anonymous donors, is evidence of a broken and corrupt system, and woe be unto all of us since neither the IRS, nor the Federal Election Commission, nor members of Congress will do anything about the “problem.”

Funny, I don’t recall Rosenthal decrying the Service Employees International Union’s $85 million in expenditures during the 2008 election cycle. What about the AFL-CIO, SEIU, and American Federation of State, County, and Municipal Employees spending a combined $150 million in the 2010 cycle? What’s the spending threshold for a nonprofit group before its ad buys become a litany of insidious dirty tricks, worthy of scaremongering by a distinguished newspaper’s editorial page overseer? What about groups on the left — particularly “money in politics” groups like United Republic — that use nonprofit groups to launder money that funds political speech? What about the pro-Obama super PAC Priorities USA Action, which accepted over $200k in funds from its sister 501(c)(4) Priorities USA, which doesn’t have to disclose its donors, even though the Obama campaign openly stipulated that any super PAC spending money on its behalf must disclose its donors?

There’s only one correct answer to these questions: there is no spending threshold, there is no universal ethical principle backing these absurd claims. Campaign finance reformers don’t want money out of politics. They only want their opponents’ money out of politics. And lest anyone mistake me, I even want my friends on the left to be able to raise and spend money anonymously on political campaigns. What people facing inevitable defeat will say in their defense boggles the mind.

In fact, President Obama so badly wants Mitt Romney’s supporters’ money out of politics that he recently claimed to have been outspent in the 2008 cycle, in an effort to make “money in politics” an issue for the current election. Data, however, show that President Obama more than doubled Senator John McCain’s spending during the 2008 cycle. (Cue Rep. Joe Wilson …) A new paper out of Dartmouth College by Deborah Jordan Brooks and Michael Murov, too, finds that ads paid for by outside groups are more effective than ads sponsored by candidates themselves … so look forward to more temper tantrums about “money in politics” from our victim in chief and his allies in the coming months, especially if they maintain their current burn rate just to be virtually tied with Mitt Romney in swing states.

The great irony in all of this, too, is that campaign finance reformers have campaign finance reform to thank for 501(c)(pick a number, any number) groups spending money on First Amendment-protected political speech. This is a very basic lesson in prohibition economics. When Congress tried to decide who could manufacture, distribute, sell, and consume alcohol, organized crime surged as prohibition gave birth to a black market for bootlegged liquor. Would there have been organized crime in America had the 18th Amendment never passed? Maybe, but the effects of prohibition were both stark and predictable, particularly given the inelastic demand for temporarily checking out of reality when the stock market crashed nearly 11 years later, and Congress was forced to repeal the 18th Amendment with the 21st Amendment in 1933.

So too are the effects of prohibitions of political speech and participation both stark and predictable when the economy is in the toilet, a decade-long unpopular war rages on halfway around the globe, and you receive either a porno scan or complimentary fondle from a government thug whenever you want to visit your dear Aunt Sally in Muskogee. People will find a way to move their ideas, to try to persuade their fellow voters that the people in power haven’t measured up, no matter how difficult those people in power try to make communicating. There wouldn’t be a perception of “501(c) mischief” if “Congress shall make no law … abridging the freedom of speech” really meant no law.

George Scoville is an independent media strategist in Springfield, Virginia. He blogs at The Dangerous Servant and contributes to United Liberty.