New York’s Attorney General Eric T. Schneiderman is ramping up his inquiry into secret, tax-exempt groups, which are overtaking Super PACs as the latest shady sector of the campaign spending world. Schneiderman has requested the tax returns and other financial documents from tax-exempt groups, both Republican and Democrat.
According to The New York Times, Schneiderman—who should also be applauded for investigating the LIBOR fraud—requested the financials of ”three major Republican-affiliated groups, Crossroads Grassroots Policy Strategies, co-founded by the political strategist Karl Rove; American Action Network; and American Future Fund.” His office also requested documents from Democratic groups, including Priorities USA Action (founded by two Obama aides), Patriot Majority USA, and America Votes.
Such groups are free from nearly all of the Federal Election Commission rules governing Super PACs and contributions to candidates.
Apparently, these groups organizes themselves as 501(c)(4)s, or tax-exempt “social welfare” organizations, and claim to deal in educational not political activity, which allows them to keep their donor rolls secret. Democracy!
One can well imagine that the secrecy option would be very attractive to corporations and billionaires who don’t want to negatively effect their business. Not everyone is like billionaire Sheldon Adelson, for example, who is quite open about his willingness to spend a fortune on behalf of the GOP.