Should 501s Be 527s?
The Democrats loved 501(c)(4)s — until they started hurting Democrats.


Ian Tuttle

And that’s what Van Hollen’s lawsuit is all about: exploiting the IRS targeting scandal to eliminate a Democratic bugbear: money that finds its way into the political arena without the “accountability” mandated by disclosure rules. It’s not a reform effort; it’s opportunistic politics.

Years before Citizens United, the Planned Parenthood Action Fund, NARAL Pro-Choice America Inc.,, the Sierra Club, and the ACLU were already operating as 501(c)(4) organizations. And nary a peep was heard. Now, under the guise of reforming the IRS, Democrats hope to impose measures that would make victims of IRS persecution publicly known targets.

That is exactly what would happen if tea-party groups, as Van Hollen proposes, were to apply for tax-exempt status under section 527. Organizations constituted as 527s have to disclose donors.

Signing onto this lawsuit is a way to circumvent the legislative process. In April 2010 Van Hollen proposed the Democracy Is Strengthened by Casting Light on Spending in Elections — or DISCLOSE — Act, which Senator Charles Schumer (D., N.Y.) introduced in the Senate by saying, “the deterrent effect should not be underestimated.” The bill failed to secure cloture that year, and when Senator Sheldon Whitehouse (D., R.I.) introduced DISCLOSE 2.0 the following year, it died in committee.

It is an unnecessary measure, and, worse, it would be liable to massive political abuse. As Senate Minority Leader Mitch McConnell, who has been in the vanguard of the Republican charge against overbearing campaign-finance laws, told the American Enterprise Institute in June, “I’ve seen what the loudest proponents of disclosure have intended in the past, and it’s not good government.”

And that is the case here, too. Van Hollen and his allies are just interested in swapping one kind of targeting for another.

— Ian Tuttle is an intern at National Review.