Yesterday, House Ways and Means Committee Chairman Dave Camp sent a letter to the Justice Department stating that former IRS official Lois Lerner may have violated criminal statutes and asking the Department to act on the findings within the letter. 

At the core of the letter is a charge that Lerner and the IRS engaged in an “aggressive and improper pursuit of Crossroads [GPS].” 

The letter implies that this so-called “improper pursuit” was motivated by letters submitted by Democracy 21 and the Campaign Legal Center to the IRS detailing the extensive political activities of Crossroads GPS.

Democracy 21 and the Campaign Legal Center strongly disagree with the Committee’s finding that the IRS’ investigation of Crossroads GPS was improper. 

The IRS’s investigation of Crossroads GPS was not only proper, but essential to the agency’s fulfillment of its law enforcement responsibilities. Far from being too aggressive, the IRS’s efforts with respect to Crossroads GPS were too slow. Crossroads GPS has raised and spent nearly $100 million on candidate election ads since its formation in 2010 - activity that Democracy 21 and the Campaign Legal Center believe constitutes abuses of the tax laws and violations of the campaign finance laws.

Beginning in October 2010, Democracy 21 and the Campaign Legal Center sent a series of letters to the IRS documenting that Crossroads GPS was not entitled to section 501(c)(4) tax status as a “social welfare” organization and calling on the IRS to take appropriate action.  Many of the letters raised similar concerns about three other organizations, including Priorities USA, a group that supported Democrats, American Action Network a group that supported Republicans and Americans Elect, a group that supported Independents.

Crossroads GPS is the brainchild of Karl Rove. It appeared clear that the organization, formed at the same time as an affiliated Super PAC, American Crossroads, was created to provide a way for donors to fund campaign activities without being disclosed.

It also appeared clear that the organization was a political organization and not a “social welfare” group.”  Founder Karl Rove left little doubt that Crossroads GPS is a political operation in an op-ed article he published in The Wall Street Journal on August 1, 2012.  Rove wrote:

Roughly $111 million of Mr. Obama’s ad blitz was paid for by his campaign; outside groups chipped in just over $20 million.  The Romney campaign spent only $42 million over the same period in response, with $107.4 million more in ads attacking Mr. Obama’s policies or boosting Mr. Romney coming from outside groups (with Crossroads GPS, a group I helped found, providing over half). 

Rove thus stated that in response to an “ad blitz” by President Obama’s reelection campaign and supportive Democratic outside groups, Crossroads GPS spent more than $53 million on ads “attacking Mr. Obama’s policies or boosting Mr. Romney.”

We believe the documentation we submitted to the IRS starting in 2010 provides clear and convincing evidence that Crossroads GPS is not entitled to tax-exempt status as a 501(c)(4) group. 

We continue to strongly call on the IRS to deny non-profit tax status to Crossroads GPS.

The Camp letter also says that there is “no evidence she [Lerner] directed review of similarly situated left-leaning groups.”  We are not in a position to know what the IRS did or did not do with other groups.  If there was no action taken regarding the other three groups implicated in our letters, this means there was no action taken against one group supporting Republicans, one group supporting Democrats and one group supporting Independents.

The Camp letter also mentions that representatives from Democracy 21 and the Campaign Legal Center met with IRS officials on January 4, 2013.  Of course, there is nothing improper about meeting with governmental officials. 

That meeting was requested to discuss a petition filed by Democracy 21 and the Campaign Legal Center with the IRS on July 27, 2011.  The petition challenged the existing regulations governing eligibility for section 501(c)(4) tax status as contrary to statutory law and court decisions interpreting the law. The petition called on the IRS to conduct a rulemaking to adopt regulations that properly implemented the law.

The meeting was not about and did not involve any discussion of the specific cases we had brought to the attention of the IRS in the letters we sent about Crossroads GPS and other three groups.  Indeed, as the Ways and Means letter acknowledges, Ms. Lerner carefully adhered to the rule against discussing any specific cases.   

Ways and Means Committee Chairman Dave Camp’s letter is a political act, apparently aimed, among other things, at getting the IRS to avoid scrutiny of 501(c)(4) groups like Crossroads GPS. 

Late Friday, the Federal Communications Commission (FCC) issued a notice reminding all U.S. television broadcasters that as of July 1, 2014, they will be required to post their political files online in a Commission-hosted database.  Of vital importance in this requirement is the information it provides regarding political advertisers.  The Public Interest Public Airwaves Coalition (PIPAC) has repeatedly urged the FCC to require this disclosure to increase transparency as required by statute.  The National Association of Broadcasters (NAB) has fought this move despite losing an effort to stay the requirement at the U.S. Court of Appeals in 2012.

“Applying these online disclosure requirements for every TV broadcast station in the U.S. is an important victory for transparency in our political process,” said Meredith McGehee, Policy Director of Campaign Legal Center, which leads the PIPAC. “By moving forward with the online filing requirement for the political file, the FCC’s policy will help ensure that viewers have the information they need to assess for themselves the messages they are viewing.  We commend FCC Chair Tom Wheeler and the Commission for letting a little more sunshine breakthrough in the multi-billion dollar business of political advertising, despite pushback from some FCC licensees.”

The Coalition recognizes the dominant role that television plays in our nation’s political contests.  The Sunlight Foundation estimates that money spent on broadcast political ads in 2012 was about $5.6 billion, up 30% from 2008.  “For too long these files, which contain important information about who is paying to influence voters through political ads, have existed only on paper,” said Lisa Rosenberg, government affairs consultant for the Sunlight Foundation. "This information has long been considered public, but accessible only to those who could take the time to dig through a station's file cabinet. By putting already public information online, the FCC will ensure that anyone who wants access can get it.”  Noted Cheryl A. Leanza, policy advisor for the UCC's media justice ministry, OC Inc., "The United Church of Christ's media justice ministry has long pushed to ensure that ordinary citizens can better understand the political process through this kind of disclosure."

Broadcasters’ claims that such reporting is burdensome do not withstand the laugh test.  Not only have they kept these files without issue for years, even the smallest broadcasters keep the vast majority of their information on computers.  “Putting the political files online is a small and inconsequential price for TV stations for the millions in additional revenue they get from political advertising,” said Charles Benton of the Benton Foundation.  “Indeed, filing these reports should be accurately viewed as a minor matter in complying with the stations’ public interest obligations.” 

PIPAC’s members include the Benton Foundation, the Campaign Legal Center, Common Cause, Free Press, Institute for Public Representation of Georgetown Law, New America Foundation, Public Citizen, Sunlight Foundation, United Church of Christ Office of Communication, Inc.

As the FCC noted in its reminder, “stations affiliated with the top four national networks (ABC, CBS, Fox and NBC) licensed to service communities in the top 50 Designated Market Areas (DMAs) were required to post political file documents online beginning August 2, 2012.”  Prior to that date, the ad files were only available by making an appointment at a local TV station to arrange a personal visit during business hours and usually facing a charge for making copies of the files.  “Even though this information has long been public record, many stations did not realize it and were reluctant to open up their files,” said Craig Holman, government affairs lobbyist for Public Citizen. “Now that this information is going on-line, the public will have easy access to these records.”

The information required to be included in a broadcast licensee’s political advertising file includes “a complete and orderly” record of all requests for specific schedules of advertising time by candidates and certain issue advertisers on issues of national importance, as well as the final dispositions or “deals” agreed to by the broadcaster and the advertiser in response to any requests.  For ads from outside groups, the file is supposed to fully identify the ad’s sponsors as well as the issue and the candidate referred to in the ad.  Also, the file should record any free time provided to a candidate.  The file must have information on offers of “lowest unit charge” for candidates, as well as the station’s compliance with “equal access” for all legally qualified candidates for public office and reasonable access” for federal candidates.  Finally, the file must include the reconciliation of the deal such as a description of when advertising actually aired, advertising preempted, and the timing of any make-goods of preempted time, as well as credits or rebates provided the advertiser. 

In its explanation of the new rules, the FCC notes that the Commission first adopted rules requiring broadcast stations to keep a public file more than 40 years ago and certain political programming files have been public for nearly 75 years. 

“Under Professor Angela Campbell’s leadership, the Institute for Public Representation has worked for years to get the FCC to insist on greater transparency about broadcasters' activities,” said Andrew Jay Schwartzman, Benton Senior Counselor at IPR.  “This is an important milestone, but we're going to press for even more disclosure.”  Currently, the FCC allows broadcasters to upload these files as “pdf” files -- documents without standardized formatting.   The Public Interest Public Airwaves Coalition has urged the FCC to adopt a standardized reporting form and will continue to strongly urge the FCC to require broadcast licensees to upload this information in a searchable, sortable and downloadable format, similar to other government databases (e.g., lobbying disclosure database, federal election information).

The Court today abandoned any pretense of respecting Supreme Court precedent or Congressional expertise on matters of campaign finance when it struck down longstanding federal limits on aggregate contributions to candidates, parties and PACs.  To reach this decision in McCutcheon v. FEC, the Court refused to follow its 1976 decision in Buckley v. Valeo, which upheld the predecessor version of the aggregate contribution limits.  Once again, the Roberts Court exhibits its complete ignorance of political realities, or worse, chose to ignore those realities, in striking down laws written by Congress, which is intimately aware of the political corruption that will likely ensue in the wake of this decision.

The decision provides a roadmap for the wholesale evasion of the base contribution limits.  Candidates will solicit million-dollar checks, contributors will write them and the pay-to-play system in Washington will only become more direct.  The Roberts Court has exponentially increased the already-significant political influence of the very richest while further undermining the influence of the overwhelming majority of Americans who could not afford to write checks to politicians for even a fraction of the former aggregate contribution limit of more than $120,000 per election cycle. 

The nation’s Founders believed that Members of Congress would be representative of all Americans.  James Madison observed, for example, that the popular government they were forming would be one where our elected Members of Congress would be beholden to the many, not just the wealthy few.  The Court’s decision today is another blow from this Supreme Court majority to the principle that our democracy is a participatory one, where “We the People” get to decide who represents us. Instead, it’s now increasingly just “We the Wealthy”.

That today’s decision uses the First Amendment as a justification makes a mockery of the Constitution. The First Amendment was intended to facilitate the exchange of ideas and information among all of us and thereby encourage our informed participation in our government.  This decision turns the First Amendment on its head by enabling those with the biggest check books to gain even more influence and access to our elected officials.  In doing so, it lessens the relative political role of ordinary Americans in our election system.  It defies both logic and common sense to suggest that the wealthiest Americans are lacking in “speech opportunities” because of the aggregate contribution limits, which have been in place for decades. 

The fig leaf the Court used to justify Citizens United was the proposition that spending by outside groups could not possibly corrupt or even lead to the appearance of corruption.  It wasn’t true when they wrote it and now we have two election cycles worth of evidence to the contrary.  But today’s decision in McCutcheon did not even bother with a fig leaf.  An activist Court simply discarded decades of its own precedents and the common sense principle enunciated in the Supreme Court’s 1976 Buckley decision that that unchecked and direct political contributions give rise to indebted - and often corrupted - officeholders and candidates.  Once again the Roberts Courts has decided that its opinion is far more important than previous courts, the American public, and Congress when it comes to campaign finance and elections.

To read the brief filed by the Campaign Legal Center and a number of citizen, civil rights and watchdog organizations (from AARP to the League of Women Voters), click here.

To read the District Court's decision upholding the aggregate contribution limits, click here.