Citizens United: The great red herring of the IRS scandal

Written by . Posted in 2012 Presidential Race, Elections, Featured

Published on May 17, 2013

UPDATE: See follow-up post here.

During the IRS targeting scandal hearings, House Ways and Means Chairman Dave Camp, R-Mich., questioned the ability of IRS officials to tell the truth. He forced Acting IRS Commissioner Stephen Miller to swear in — something that is not usually done for government officials — citing the fact that the IRS has misled the committee so much in the past. Noting the multiple scandals currently percolating in the news along with this one, Camp said in his opening statement that “it seems like the truth was hidden from the American people just long enough to make it through an election.”

Rep. Paul Ryan, R-Wis., identified what is perhaps the most obvious deception of all. Miller, who is obligated by law (with or without an oath) to give Congress the truth and the whole truth, had been specifically asked about¬† targeting of conservative non-profit applicants — and it happened after he had been briefed on the targeting of groups with names that included “Tea Party,” “Patriot” and other words frequently used by conservative activists. Miller maintained throughout Round One that he “answered truthfully,” but his failure to mention this at the time suggests he may not have — at least not according to the standards expected in Congressional Testimony.

Democrats on the Ways and Means Committee focused like a laser on the Supreme Court’s 2010 Citizens United decision as the true culprit for this targeting. But there are a few problems with this explanation.

First of all, this excuse blames the victims and turns the perpetrator — the IRS — into some kind of victim of their constitutional rights. It’s one thing if Democrats don’t like what the law or the Constitution or the Supreme Court has to say about free speech — they are welcome to attempt to change it. But that doesn’t justify the singling out of conservative groups, who were not given any special status above and beyond their liberal peers. At best, it’s a separate issue.

Second, the data show that there was no surge in 501c(4) applications by Spring 2010, around which time the IRS decided to target conservative applicants — in fact, the number of applications declined sharply between fiscal 2009 and 2010. So the idea that a sudden surge of Citizens United-inspired non-profit applications created the need for this extra scrutiny is a completely false one. (When this fact came up in the hearing, Miller played dumb and pretended he hadn’t read this part of the Inspector General’s report.)

Third, the groups that were targeted mostly do not even remotely fit the profile huge “dark money” actors that Democrats associate with Citizens United. The Associated Press studied tax returns for 93 of them only to find that they had little money and were genuinely grassroots groups — their median income (mostly from fundraising) was $16,700 per year, and their median expenses were just $12,770 — not even enough for a typical campaign ad buy.

Only a very small number of big players have used 501c(4) money for mass-scale electioneering, and none of them seem to have been targeted. Pro-Publica set up this graph in August 2012 to document the total dominance of just two such groups in this area at that point:

propublicaI’m compiling more complete numbers for another post, but just take this away: If Citizens United had ever been the problem, no one was solving it by targeting the mom-and-pop organizations who got the Spanish Inquisition from the IRS.

Finally, 501c(4) groups have always been allowed to engage in politics to some degree. Americans for Tax Reform — Grover Norquist’s group — is just one of the many well-known ones in Washington. If they don’t count as politically involved, I don’t know who does. But like other such groups, they pursue social goals — in their case, lower taxes.

501c(4) groups ran election ads routinely prior to McCain-Feingold (which passed in 2002) — but they were “issue ads” that did not expressly ask viewers to vote for or against candidates. The typical ad would say, “Call Congressman so-and-so and tell him his tax hike is unacceptable.” McCain-Feingold put new limits on these ads — forbidding them to mention or depict candidates shortly before elections — but those restrictions were mostly gutted by the Supreme Court in the 2007 Wisconsin Right to Life case.

The main difference the Citizens United decision made is that now these groups can explicitly endorse or (more often) oppose a candidate. But even that difference is not as big as you think. Look back to 2000, and the Brennan Center was complaining about how less than 1 percent of the $98 million in ads run by non-disclosing outside groups were genuine issue ads. When adjusted for the overall increase in political spending since 2000, that’s not nearly as far a cry from the roughly $305 million spent by such groups in 2012 (again, dominated by a few huge players) as some would have you think.¬†