Wednesday, May 21, 2014

Nope, Nothing Political About This Ad

Imagine two kajillionaires, one a pioneer of Internet commerce and the other a spectacularly successful investment fund manager. One lives on the east coast, the other on the west coast. They are known to be partial to liberal causes. They are losing sleep, awakened repeatedly by recurring nightmares. Always the same dream . . . Scott Walker sitting behind the big desk in the Oval Office.

They figure the best way to blow up Walker's road to the White House once and for all is to doom his reelection as Wisconsin's governor. They instruct political operatives they know to set up a tax-exempt social welfare group called "Hacked-Off Badgers." They each funnel several million dollars to the organization.

In the month leading up to the November 2014 election, the group buys weeks worth of advertising time on every television station in Wisconsin. It airs this message, accompanied by ominous music and grainy images of shuttered factories and men in hardhats line up outside the unemployment office:
Scott Walker is a college dropout. And he has been on the dole ever since. Every job he's had has been a government job. That explains why he has no clue how to get Wisconsin's economy moving. Why our state has been dead last in job creation with Scott Walker as governor. Walker's dismal performance doesn't hurt him any. He just keeps feeding from the public trough. But can the rest of us afford to have the worst governor Wisconsin has ever seen? – Authorized and paid for by Hacked-Off Badgers
A pack of federal judges in Chicago just ruled last week that such an ad has no political purpose. Because the message contains no words such as "vote for," "vote against," "elect," "defeat," "support" or "oppose," it is not a political ad. Because Hacked-Off Badgers did not say any of the magic words that ads with a political purpose must contain, the group does not have to disclose how much it paid to launch this attack on Walker, nor does it have to reveal who put up the money.

The political operatives doing the bidding of our two kajillionaires set up Hacked-Off Badgers under a federal law – 26 U.S.C. §501(c)(4) – designed for the creation of groups "not organized for profit but operated exclusively for the promotion of social welfare." The law exempts from taxation the "net earnings of which are devoted exclusively to charitable, educational, or recreational purposes."

In writing regulations to implement the law, the Internal Revenue Service bizarrely took the position that an organization "is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community."

You read right. Exclusively means primarily. So a 501(c)(4) group like Hacked-Off Badgers can spend millions to air their attack on Walker even though the law says the "promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office." Under IRS guidelines, a 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. And for good measure, federal judges have determined that ads like the one sponsored by Hacked-Off Badgers are not political ads at all. Because those magic words are absent, the purpose of the Hacked-Off Badgers' message must be "charitable, educational, or recreational."

Take your pick.


Karen M. said...

Good points, Mike. But of course my first reflexive thoughts were: "I'll chip in to run that ad. To whom do I write the check?"

Tim Morrissey said...

This ad would clearly educate quite a few voters in Wisconsin's more "red" counties. Is it political? Of course it is, to everyone who is not a judge or an IRS agent.

Anonymous said...

But....Why was it OK for all of those right wingers to organize their packs under the same law and crucify the IRS for challenging the legality? Oh, and I believe the difference between this ad and the typical Koch funded hack job is this one is honest.

Mike McCabe said...

"Is it political? Of course it is, to everyone who is not a judge or an IRS agent."

Or most legislators.

Unknown said...

Your Hack Off statement would make a good letter to the editor.