One of the reasons the DISCLOSE Act -- legislation designed to squelch 501(c)(4) political speech in and around election time -- was defeated in 2010 was the presence of carve-outs in the bill to protect favored special interests.
Under the proposal, since only aggregate contributions over $600 would have to be disclosed, labor unions were exempted — most union dues are less than that. Media organizations were also carved out.
Exceptions were also granted to the Sierra Club, the Humane Society, AARP and the National Rifle Association. Everybody else was out of luck.
Designed to lessen opposition to the bill’s passage, it had precisely the opposite effect. Groups that were not excluded rallied against the legislation, railing against the sleazy back-room deals designed to grease the wheels in Congress — a favor factory that was easily countered for the corruption it exposed.
The DISCLOSE Act was ultimately stymied in the Senate in July 2010 as Republicans filibustered, and the bill lacked the 60 votes needed for it to proceed to final passage.
But the idea was not dead. Failure in Congress did not stop President Obama, for what his administration could not achieve via legislation it now pursues via regulation.
They were delayed even as the groups said they would participate in political activities that have been legal for decades for (c)(4)s.
In the meantime, IRS officials feigned ignorance over what was allowable, while thousands of existing (c)(4)s were unaffected by the new standard. But that would soon change.
Even before the targeting was revealed publicly, it turns out the Obama administration was already contemplating a new regulation once again aimed at all 501(c)(4)s, according to documents uncovered by the House Ways and Means Committee.
The proposed regulation, published in November 2013, severely restricts the activities of (c)(4)s — even barring them from mentioning the name of any politician, such as a member of Congress, during campaigns.
Unsurprisingly, the new rule does not apply to unions, which are similar 501(c)(5) organizations, and which spent more than $772 million on elections and lobbying in 2012.
The Service Employees International Union led the political spending charge with almost $114 million in political activity, according to official filings submitted to the U.S. Department of Labor.
Not including SEIU and AFL-CIO spending (each of which have significant public employee membership), the top public employee unions spent more than $144 million on political activity and lobbying, with AFSCME alone totaling more than $70 million in expenditures.
All of this would be ignored under the new rules, as would expenditures by 501(c)(6) trade associations and media organizations, groups that remain unaffected by the regulation.
In short, the proposed regulation violates the principles of equal protection of the law because it fails to treat similar organizations in a similar manner.
In the meantime, 501(c)(4)s would be barred from such expenditures 30 days before a primary election at the federal, state and local level, and 60 days prior to the general election, or risk losing their tax status.
As a matter of law, under existing rules, an organization may carry on electioneering so long as it does not constitute a majority of its activities. There never was any reason to single out disfavored groups like the Tea Party.
When the scandal was exposed, it led to a public uproar and multiple congressional investigations over the taxing agency being used politically to target enemies of the administration.
At the outset, even Obama called the targeting “inexcusable, and Americans are right to be angry about it, and I'm angry about it.”
Yet the targeting continues today. Decisions on the applications of conservative groups like the Tea Party Patriots and True the Vote still have not been made by the IRS.
Now the Obama administration wants to institutionalize the targeting in the form of the new IRS regulations that will leave unions, trade groups and big media unscathed.
Hopefully, these unfair carve outs will be as destructive to the fate of the proposed regulations as they were to the DISCLOSE Act.
Unfortunately for the White House and the IRS, affected groups have had the opportunity to read the proposed regulation before it was finalized, leading to traditional Obama allies like the American Civil Liberties Union and even the SEIU to openly criticize the regulation. Support is already collapsing.
Even those in the Obama administration should be able to grasp the concept that freedom of speech cannot be granted to a few while being denied to many. This is akin to feeding alligators hoping you’ll be eaten last.
Eventually, should this regulation go into effect, the inevitable result is that it will be applied to every covered organization whether they were Obama supporters or not.
That would signal the end of the American democratic history of dissent.Nathan Mehrens is president and general counsel of Americans for Limited Government.