The Nation

The exterior of the Internal Revenue Service building in Washington, Friday, March 22, 2013. (AP Photo/Susan Walsh)

The additional questions provided by the IRS to Tea Party and some Democratic-leaning groups seeking social welfare 501(c)(4) status appears to have been inappropriate level of scrutiny. But is the current controversy swirling around Washington obscuring much, much bigger issues around the 501(c)(4) tax status?

The real scandal has been the blatant abuse of 501(c)(4) status by dozens of lobbyists and operatives who have set up such tax exempt organizations as political slush funds to conceal money in political campaigns. 501(c)(4) groups, since the Citizens United decision, have operated as Super PACs—raising and spending tens of millions in corporate funds—without disclosing a dime of their contributors. IRS rules state that the primary activity of such groups cannot relate to political advocacy, yet examples abound of 501(c)(4) groups spending well over fifty percent of their funds on attack ads, political action committees and other clearly political expenses. These potential violations of the law have gone on for several years now, with very little interest from the Beltway media or Capitol Hill Republicans, many of whom owe their election to spending by bogus 501(c)(4) organizations.

Here are just five examples of bogus 501(c)(4) groups that deserve more scrutiny under the law:

The American Action Network is a 501(c)(4) nonprofit run by corporate lobbyists like Vin Weber (of Sallie Mae) and Tom Reynolds (of Goldman Sachs). Citizens for Responsibility and Ethics in Washington found that on its tax returns, “AAN reported spending a total of $27,139,009 on all activities from July 2009 through June 2011—$1,446,675 on its 2009 tax return and $25,692,334 on its 2010 tax return—making political activity 66.8 percent of its total spending.” Since IRS rules for primary activity have been interpreted to mean that 501(c)(4) groups cannot spend more than 49 percent of their funds on political endeavors, American Action Network appears to be skirting the law. The group spent more than $745,000 to help elect Sen. Ron Johnson (R-WI), one of the lawmakers now calling for hearings into the IRS narrowly on grounds that the agency inappropriately targeted Tea Party groups.

Please support our journalism. Get a digital subscription for just $9.50!

The Commission on Hope, Growth and Opportunity is a 501(c)(4) organization reportedly set up by lobbyist Scott Reed, which told the IRS when it applied for social welfare status that it would not spend money on political campaigns. In fact, Reed boasted to reporters that he had sought big donations from the health insurance, energy and banking industry to run ads against Democrats. According to disclosures, CHGO broke the primary activity threshold and spent 53 percent of its funds during the midterm elections on political advertising. The group spent big on defeating lawmakers like John Spratt (D-SC).

The American Justice Partnership is a 501(c)(4) group run in part by Republican consultants Dan Pero and Cleta Mitchell. In 2010, the group spent 77 percent of its funds moving money to political attack ad groups like the American Future Fund or to political action committees like the "Michigan Republican Party Admin Account." Part of the remainder of the funds appears to have been spent on consulting fees to the board members of the group.

The American Future Fund is a 501(c)(4) group set up by a number of Republican operatives, and has aired millions of dollars in attack ads against President Obama and Democratic candidates for Congress. In 2010, the group spent 15.3 million of its 21.3 million expense budget on media consultants. AFF reportedly used its funds on television attack ads, direct mail against candidates and political telemarketing. In other words, the group spent 71 percent of its funds on political purposes.

The 60 Plus Association is a front group designed by Republican operatives to appeal to senior citizens. The group's budget swelled during the 2010 midterm campaign. Through June of 2010, the group spent about $15.5 million, $11.5 million of which went to media-buying and direct mail firms for campaign advertisements—74 percent. One set of ads deceptively claimed congressional Democrats voted to cut $500 billion from Medicare, failing to note that actual cuts were to Medicare Advantage, not to regular Medicare beneficiaries. As Jim Martin, the head of the group told me last year, though the organization touts itself as a voice for seniors, the group openly solicited corporate donors as well.

It's clear why these Republican operatives used 501(c)(4) organizations as tools to move millions in political money. Big publicly traded corporations have been eager to exploit the Citizens United decision but have avoided Super PACs because Super PACs face regular disclosure requirements. 501(c)(4) never have to disclose donors. For instance, health insurer Aetna accidentally revealed that it had provided $3 million to the American Action Network, a fact the company apparently wanted to keep secret.

The IRS 501(c)(4) system is horribly broken, but it seems the scandal surrounding added scrutiny for Tea Party groups will not fix any of the problems. The IRS should focus on big players that skirt the law, especially the ones proven to have passed the fifty percent threshold as I've documented above.

And there are many ways to fix systemic issues with the IRS that go beyond investigating sham groups. For one, the minimal disclosure system for 501(c)(4) groups is only in paper/CD format and is displayed to the public over a year after the money is spent. That's why we still have little to no data on new Democratic groups, like Priorities USA, that recently began mimicking Republican 501(c)(4) organizations that were so active in the 2010 election cycle. Moreover, PublicResource.org's Carl Malamud has a proposal to digitize all the 501(c)(4) disclosures so the public and press can review them, and well, make a decision about "primary purpose" for themselves.

Mad at the IRS? Blame congress!

President Obama reportedly fantasizes about “going Bulworth,” voicing exactly what’s on his mind, like Warren Beatty’s character in the 1998 film. Steve Brodner, the artist behind the Bulworth movie poster, wonders what other films may have inspired the Obama presidency, such as The Manchurian Candidate.

It's not easy to do the right thing when outside forces are trying to corrupt your thoughts. Check out the five more illustrations at the Washington Post.

President Obama speaks at Morehouse College commencement in Atlanta. (AP Photo/Carolyn Kaster)

First lady Michelle Obama and President Barack Obama were the respective featured commencement speakers this year at Bowie State University and Morehouse College—two historically black colleges and universities (HBCUs) founded nearly 150 years ago. While the Obamas could have taken the opportunity to inspire black graduates entering an uncertain future, both chose, instead, to pepper their remarks with problematic and unobliging stereotypes about black youth. While doing so, both also conveniently neglected to call attention to the policy changes that President Obama could have enacted to help alleviate the insurmountable odds that young people of color—and blacks in particular—face in the United States.

When the first lady addressed Bowie graduates last Friday, she summoned the likes of Dr. King, Thurgood Marshall and Fredrick Douglass to help weave a brief history of the school—founded in Maryland just as the Civil War was coming to an end. And yet, as she talked about a long tradition of black students’ hunger for education, she added that about 150 years after the Emancipation Proclamation and more than fifty years after Brown v. Board, “too many of young people just can’t be bothered” to pursue an education. Michelle Obama said that rather than walk miles to school everyday, black students sit “on couches for hours playing video games, watching TV.” And the stereotypes didn’t stop there. “Instead of dreaming of being a teacher or a lawyer or a business leader,” proclaimed the first lady, “they’re fantasizing about being a baller or a rapper.”

Michelle Obama’s banal descriptions come at a time when many of us are waiting with bated breath for the Supreme Court’s decision on affirmative action, which could reverse the positive—and still developing—results of Brown v. Board. Although the first lady pointed out that one in three black students drops out of high school, and that only one in five between the ages of 25 and 29 have a college degree, her remarks appear to put the onus not on a system designed to ensure black failure but on lazy individuals.

Forget that Chicago Mayor and former White House Chief of Staff under Obama, Rahm Emanuel, is backing the closing more than fifty schools, which will disproportionately affect black students—as violence rages on and is literally killing black and Latino youth. Forget the ways in which Obama has made “painful cuts” to Pell Grants—benefits available to students whose families cannot otherwise afford to pay for college (read: black, brown and Native families who have fared worse under Obama, and can never seem to catch up to the wealth that white families have secured after centuries of inequities). Michelle Obama’s remarks reserve blame not for an entire structure that betrays black students at multiple levels, but on black students themselves whom she condemns for wasting time in front of television sets. The first lady’s remarks about black youth fantasizing about “being a baller or a rapper” might cut extraordinarily deep for those youth who essentially learn literary criticism by close readings of rap lyrics. Those youth are grasping rhyme, metaphor and syntax before the concepts are even introduced in their public school. And there is innately nothing wrong with—and, in fact, much to be celebrated about—the art of hip-hop, or learning to survive as a so-called baller when other avenues have systemically been closed to you.

Perhaps more problematic were the president’s remarks to Morehouse graduates on Sunday—after all, perhaps the first lady can and should be spared the most egregious consequences of this administration’s decisions on communities of color. It will be Barack Obama, and not his better half, who will inherit the legacy of continued criminalization schemes that secure the inordinate number of blacks in jails and prisons, along with increased deportation schemes that secure a record number of immigrant removals. The outrageous bounty placed on Assata Shakur, the flawed use and defense of drone strikes that result in extrajudicial killings—these are some of the ways in which this president will inevitably be remembered.

During his address, the president, too, evoked Dr. King, Thurgood Marshall and Fredrick Douglass, and included personal observations such as the times when he used to write off his “own failings as just another example of the world trying to keep a black man down.” But that conviction was swayed after learning that “there’s no longer any room for excuses.” While Barack acknowledged the legacies of slavery and segregation, and the continued practices of racism and discrimination, he stressed the need to overcome these barriers because of an increasingly competitive global market in which “nobody is going to give [black graduates] anything that [they] have not earned.” He could have added that even earned rewards can quickly evaporate once race mediates the situation. Like his partner, the president stressed individual responsibility—dangerous and impractical guidance at a time when an undying system of white supremacy continues to dictate not only access to wealth and education, but also continues to determine matters of life and death.

Please support our journalism. Get a digital subscription for just $9.50!

Graduation is often a time for inspiration, not attacks—although that may have been lost on the first couple. Still, neither Michelle Obama nor Barack Obama could possibly fail to grasp that their words echo beyond commencement services and to audiences far and wide. In that respect, the speeches they’ve shared were written for all of us, and perhaps for black youth in especially, who are at once being bombarded with insulting stereotypes, and being blamed for a reality they haven’t constructed or can easily benefit from. As the president is being rocked by a right-wing-manufactured scandal, he might consider searching for support from the imaginative movements that helped bring him to power—movements that recognize that it’s not black people who are failing to succeed, but that a long-entrenched power structure fails to fully recognize the value of its entire people.

The Obama adminstration could take executive action to ensure better jobs for workers paid by government contracts and subsidies. Read Josh Eidelson’s report on today’s strike action.

Prospects for a peaceful settlement of the civil war in Syria are dim, despite the peace conference expected to take place next month in Geneva, jointly sponsored by the United States and Russia. It’s unclear, yet, whether either side—the Syrian government or the rebels—will participate, though both are under great pressure from their respective patrons. If the conference fails, President Obama, Secretary of State Kerry and the Russian leaders, Vladimir Putin and Foreign Minister Sergei Lavrov, will have egg on their faces. Worse, of course, the killing will continue.

This week, Kerry will meet with the troublesome and fractious opposition movement in Jordan. His job there will be to persuade the rebels not to boycott the conference. That task could, conceivably, have the happy effect of splitting the opposition into moderate and radical factions—but just as well it could result in the opposition as a whole deciding not to talk to the government of President Assad. However, if the Syrian government agrees to take part, under pressure from Moscow, and the rebels don’t, it will be very, very difficult for the United States to continue supporting the rebels, at least in their present form.

As The New York Times says, in an editorial today:

[Kerry] will need to do a better job of clarifying the American vision, and organizing the allies, than Washington has done so far. The opposition forces are scheduled to meet in Istanbul on Thursday, followed by an Arab League meeting in Cairo. For the opposition to boycott the conference would hand a significant propaganda victory to Mr. Assad.

Meanwhile, on the battlefield, it appears that the Syrian government is making significant progress, bolstered by arms from Russia and Iran and taking advantage, perhaps, of disarray among the opposition. The Wall Street Journal reports today that the battle for Qusayr, a small city with strategic importance between the Lebanese border and Homs, Syria, could be a “turning point” in the war, tipping the balance in Assad’s favor. It says:

The bloody battle over the city of Qusayr, near the Lebanese border, has the potential to transform Syria’s conflict, say fighters, diplomats and analysts. A government victory there could give the regime of President Bashar al-Assad a corridor of territory connecting Damascus to Syria’s pro-Assad coastline and to Lebanese territory controlled by Iran-backed Hezbollah. This would split rebel forces into fragmented strongholds.

The article quotes a Western diplomat thus:

“The entire paradigm has shifted” in Syria’s conflict, a Western diplomat said, describing the government’s push into Qusayr as the latest in a string of “confident, defiant and strategic moves.”

That’s a far cry from the expectation, two years ago, that the Syrian version of the Arab Spring movement that topped rulers in Tunisia, Egypt, Libya and Yemen would make short work of Assad.

The Los Angeles Times, in a parallel report titled “Syrian military shows unexpected resilience,” says that rebels elsewhere in Syria, outside Qusayr, are worried that the government will move against their positions next.It’s worth quoting the piece at length:

The military onslaught this week against the strategic Syrian town of Qusair has dramatized a surprising combat resilience that has already put rebel forces on the defensive on other key fronts, including near the capital, Damascus.

The military’s still-robust fighting ability—apparently bolstered in Qusair by the presence of combatants from Hezbollah, the Lebanese militant group—has confounded predictions from experts and foreign capitals that the Syrian government’s days were numbered.

Some are recalibrating their forecasts of the regime’s certain demise, even as Russia and the United States try to organize an international conference meant to jump-start peace talks and create a transitional government in Syria.

In recent weeks, forces loyal to President Bashar Assad have scored significant victories in the south and north.

In the media, much is being made of the fact that Hezbollah, the Lebanese Shiite militia backed by Syria and Iran, is taking part in the fighting. While the reports are mostly accurate, the main Syrian fighting force is the state’s own armed forces, who are being supplied readily by Iran and, especially, Russia. Russia’s support, which is routinely demonized in the Western media, can be a good thing, because it gives Russia leverage over Assad in the peace conference. But the success of that conference will depend on whether or not the United States is willing to exercise similar leverage over the rebels, more and more of whom are jihadist-influenced Sunni radicals and Al Qaeda types.