Tomorrow, Citizens United, which opened elections to unlimited third-party spending on ads -- often without disclosing their donors -- turns 1 year old. The case originally came from the Citizens United group's attempt to air a movie about Hillary Clinton despite bans on third parties' "electioneering communications" within a certain number of days before an election (in this case the 2008 Democratic primary). Now, in an ironic twist, the Sunlight Foundation shows how the decision didn't just allow spending immediately before an election but actually mandated it all year round:
Here's how it works: Under IRS rules, a corporation that wants to hide the donors to its election activities and still maintain its tax-exempt status cannot have the election of candidates as its “primary purpose.” So it must spend more on “education” or issue ads than it spends on electioneering communications. That means, for example, that in order to keep its tax-exempt status, Karl Rove brainchild Crossroads GPS, which spent $17 million on campaign ads on the November elections, must now spend at least twice that on issue ads.
During the election, groups organized as 501(c)4's, a nonprofit classification which does not require them to reveal their donors and allows what is presumed to be a small number of wealthy individual and corporate donors to pour millions into a campaign. According to Sunlight, this led directly to over $76 million in outside ads of more than $450 million in outside spending for the 2010 elections. It's unclear how much additional spending they will do to keep their tax-exempt status, but Crossroads has already spent $400,000 on "issue ads" urging Democratic representatives to extend the Bush tax cuts.
There are those who felt that all the outcry over Citizens United a year ago exaggerated the effect it would have on election spending. What's clear is that the combination of unlimited spending with the use of the 501(c)4 for political purposes changed the midterm elections. Now, and largely depending on if the IRS enforces the rules that political spending cannot be the sole purpose of the 501(c)4, we will see whether Citizens United will significantly ramp up "issue" spending all year round. As long as the money keeps rolling in, it's possible the eternal campaign season has arrived.
--Pema Levy
