Highlights of Campaign Finance History – Part 1

by Kellye

Before the Federal Election Campaign Act (FECA) was passed in 1971, there were few laws to govern campaign finance at the federal level. The Tillman Act (1907) banned corporations from making political contributions to candidates in federal races. The Taft-Hartley Act (1947) barred unions from doing the same. Taft-Hartley also was the first law that prohibited both corporations and unions from making “independent expenditures” in support of or in opposition to candidates in federal elections. As will be shown in this post (Part 1) and the next (Part 2), whenever Congress would pass laws to reform campaign finance, the Supreme Court would strike down significant parts of each one of them.

The Real Story Behind 501(c)(4)s and 527s — Part I

by Kellye

Due to the current IRS controversy, 501(c)(4) groups have become a topic of conversation in the media again. What exactly is a 501(c)(4) organization? How does it differ from other 501(c) organizations, in particular, a 501(c)(3) charitable organization? How does it differ from a political 527 organization?

The original intent of the tax law that Congress passed that was incorporated into section 501(c) of the IRS code over 75 years ago was to give federal tax-exempt status to non-profit organizations which weren’t political groups. In particular, the law stated that organizations desiring 501(c)(4) status had to be “operated exclusively for the promotion of public welfare.” However, in 1959 the IRS decided to loosen this requirement (without the consent of Congress) and allow 501(c)(4) groups to engage in political activity, as long as that political activity wasn’t the group’s primary purpose. Many of these 501(c)(4) groups became political in the 1960s not long after the IRS made that decision.

Big Money in Education Part IV

by Anita

About a year ago I met a young woman who had attended a for-profit culinary school (for -profit schools are very expensive). She had been living at home with her parents while attending the school. When her father lost his job and had to move the family out of state in order to find work, she did not have the resources to stay behind and finish culinary school. Without completing her course of study, she couldn’t get a job at a real restaurant; instead, she ended up working in fast food. She cried as she told of the burden of the heavy debt and wondered how she would ever be able to pay her loans back considering her low income.

Her story was my introduction to the potential problems of for-profit schools. However, as I found out, she is not alone in her debt problem. Many young people (and some older, as well) have taken on large amounts of debt in order to attend college and improve their chances of getting a good job.

FCC’s New Rule on Tracking Political Ad Buys

Beginning August 2, 2012, about 200 TV station affiliates of NBC, ABC, CBS, and Fox in the nation’s top 50 TV markets were required by the FCC to start posting the records of political ad buys online for easier access.  Prior to this date, these records could still be obtained, but only by going directly to the TV station’s location and requesting them (this procedure is still in place for all other stations, including cable).  The ability to access this information more quickly and easily will allow for greater transparency in political elections.

Broadcasters had been fighting against this requirement for a number of years because they said it created “an onerous paperwork burden.”  They are now saying that the new rule would affect their bottom line by exposing their ad pricing to other customers and to their competitors.  After one year, the FCC will re-evaluate its decision based on the effect that it had on the 200 TV stations.

Unfortunately, there are still huge numbers of political ad buys that are not covered by the FCC ruling because they fall outside the nation’s top 50 TV markets.  According to the Sunlight Foundation, this includes more than half of the ads (tens of thousands) that have aired in 4 of the 9 presidential swing states.  None of the ad spending in Iowa has to be reported.  Only 30% of that in Wisconsin and  45% of that in Colorado have to be reported online.

The True Identity Behind Super PACs

by Anita

Who are the top Super PAC donors? According to rootstrikers.org, there have been 26 donors (so far) who have given almost 50% of all Super PAC money.  Who knows how many are giving secretly to the 501(c)4  “social welfare organizations”?  Here is a link to a post on the Rootstrikers blog that shows the names and occupations of those 26 donors (be sure to click on the image in the blog post to enlarge it):

http://www.rootstrikers.org/the_true_identity_behind_superpacs

You may notice that the Koch brothers aren’t in this graphic.

According to Szelena Gray at Rootstrikers, the graphic deals with Presidential Super PACs, and the Koch brothers primarily donate to Congressional races.

Also, John Lesko writes in a comment: