President Donald signed an executive order this week, intending to relax tax-law consequences on churches that endorse political candidates. In his zeal to “protect and vigorously promote religious liberty,” he opened the door to yet another avenue for really rich people to subvert democratic choice in U.S. elections.
Donald’s language a few months ago foreshadowed this: “I will get rid of and totally destroy the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution.” Well, he can’t do that. Congress makes law, not presidents.
However, his executive order “discourages the IRS from going after churches aggressively for their political expression.” The Johnson Amendment “prohibits tax-exempt charitable organizations such as churches from participating directly or indirectly in any political campaign to support or oppose a candidate. That means no donations to candidates’ campaigns and no public statements explicitly on behalf of or against a candidate.” The penalty can be loss of tax-exempt status. However, IRS enforcement historically has been spotty. Trump’s order ensures enforcement will continue to be rare.
Enter the gazillionaires who want to anonymously spend enormous amounts of money to covertly influence elections and legislation.
The Johnson Amendment does not focus solely on churches. Its prohibitions against endorsing candidates are aimed at “tax-exempt charitable organizations such as churches.” That means lax IRS enforcement of political activities by tax-exempt charitable organizations allows creation of such organizations with covertly political intent.
Imagine just one or two really rich people creating such a 501(c)(3) charitable group, funding it with tens of millions if not hundreds of millions of dollars, subverting the stated intent of the group (charitable activities), directing all money into political attack ads … and receiving a tax deduction.
Just one or two gazillionaires? That’s happened. According to the Center for Responsive Politics:
A politically active nonprofit that supported Sen. Marco Rubio’s (R-Fla.) failed 2016 presidential bid raised nearly $22 million in two years, 93 percent of which came from either one or two anonymous donors. [emphasis added]
Wait, there’s more:
Conservative Solutions Project, a 501(c)(4) “social welfare” organization with no employees or volunteers that isn’t supposed to be primarily political, spent millions of dollars on ads, research and polling to boost the Florida senator’s candidacy, but it appears to have done little or no social welfare — unless one counts portraying Rubio as a champion on taxes and foreign policy as being a public good. That raises questions of whether CSP crossed a legal line by acting mainly as a political group — and also whether it existed to benefit a single person, violating the IRS’ “private benefit” rule. [emphasis added]
Now, thanks to President Donald’s admonition to the IRS to back off enforcing Johnson Amendment prohibitions on charitable organizations, individuals with a lot of money now have a new toy to play with — anonymously.
That’s the argument of Brendan Fischer of the Campaign Legal Center in an email about “super dark money” to supporters:
Without this prohibition, wealthy donors could use groups organized as charities or religious organizations to secretly influence elections — and to get a charitable tax deduction for doing so. … Places of worship and charities have essential roles to play in our society, but channeling secret money into elections isn’t one of them.” [emphasis in original]
Remember, Donald did this all in the name of “religious liberty.” Well, he certainly answered the prayers of some wealthy conservative donors (and maybe a few liberals).