U.S. Treasury moves to protect identities of 'dark money' political donors

https://www.reuters.com/article/us-...-of-dark-money-political-donors-idUSKBN1K704F

U.S. Treasury moves to protect identities of 'dark money' political donors

WASHINGTON (Reuters) - The U.S. Treasury said on Monday that it will no longer require certain tax-exempt organizations including politically active nonprofit groups, such as the National Rifle Association and Planned Parenthood, to identify their financial donors to U.S. tax authorities.

The policy change, heralded by conservatives as an advance for free speech, maintains donor disclosure requirements for traditional charity groups organized to receive tax-exempt donations under a section of the Internal Revenue code known as 501(c)(3), the Treasury said.

But the move frees labor unions, issue advocacy organizations, veterans groups and other nonprofits that do not receive tax-exempt money from meeting confidential disclosure requirements set in place decades ago.

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That's good news for dark money contributors, and those who might want to funnel foreign money into our elections process - there is no need for dark money groups to disclose to anyone who their big fat cat donors are. Thank goodness for that - what we need is more unknown plutocrat and corporate donors dominating the election process in this country, and for their identities to be hidden from EVERYONE!

BTW, the article does note that this data wasn't publicly disclosed before and won't be now, so that doesn't change. What the change does do is make it even more difficult to detect the influence of perhaps illegal donors, and give them more confidence they all can buy influence without the public knowing who is buying what.

...heralded...as an advance for free speech, maintains donor disclosure requirements for traditional charity groups organized to receive tax-exempt donations under a section of the Internal Revenue code known as 501(c)(3), the Treasury said.

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Oh, so free speech in the form of big-money contributions can only happen when one isn't required to be accountable for having "spoken." So now the DoTr. is of the mind that everyone should be free to "speak" and "say" what they want, which everyone already is, but the rest of us aren't entitled to know who's "speaking."

That's not boosting freedom of expression. It's forbearing cowardice.

Phew...just in time to protect the NRA from disclosing it's Russian donors.


https://www.vanityfair.com/news/201...0-million-to-elect-trump-was-it-russian-money

And another thing. Just how is the prohibition on foreign donations to political organizations supposed to be enforced if organizations aren't required to positively attest who their donors are?

• 11 CFR 110.20 - Prohibition on contributions, donations, expenditures, independent expenditures, and disbursements by foreign nationals (52 U.S.C. 30121, 36 U.S.C. 510).

When a political non-profit isn't required to report from whom/where the money came, one can't determine whether the donor is legit or not.
What exactly is from whom/where the money came but the donor's identity?

I can hear the excuses now:

• Oh, we didn't know so-and-so was a foreigner.
• Oh, we don't track that information because we aren't required to report it to the IRS.
• Some other "the dog ate my homework" lameass excuse.

This change by the DoTr. serves one purpose: to reduce the enforceability of extant laws regarding foreign contributions and money laundering.

This is exactly the kind of thing Putin or any other foreign adversary would want done.

Is the kind of thing Trump and Putin discussed when nobody else was around?

Moot said:

Phew...just in time to protect the NRA from disclosing it's Russian donors.

https://www.vanityfair.com/news/201...0-million-to-elect-trump-was-it-russian-money

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The NRA isn't really the sort of organization of which the donor list interests me all that much, though to be sure it and other non-profit organizations are plausibyObjective: Convert other people’s money to your money. Step 1: Establish “charity” (The Trump Foundation) Step 2: Charity collects other people’s money. Step 3: Charity donates other people’s money to another charity run by your son (Erik Trump Foundation). Step 4: Charity run by your son uses the money your charity donated to buy services (previously provided for free) from one of your businesses (a golf course) at inflated prices. fronts for corporate money laundering, but I'm not at the point of just calling the NRA or other large public charities (aka, "private operating foundation") "fronts" and "money launderers."

Could they be? Yes; any 501(c) organization can be, but it takes a lot of collusion for that to happen in a large public charity because public charities actually have operations and internal controls and degrees of separation between parties in the cash receipts and expenditure cycles' processes that make collusion of that sort hard to undertake without raising suspicion.


I'm more concerned about private foundations and political action committees. The former because they are tailor made for money laundering. The later because of federal election laws prohibiting donations from foreign persons and entities, those laws being in place to help deter foreign influence in our elections.

The basics of how it works is straightforward:

1. 
   [*=1]F establishes “charity” C.
   [*=1]C collects other people’s money.
   [*=1]C donates other people’s money to another charity run by a related party (co-conspirator) A.
   [*=1]A uses the money C donated to A to buy services from one of F's businesses, usually at inflated prices.

There are, of course, variations on the process. One is that F directs C to uses the money collected from other people to purchase things on F's behalf (that only F can use/enjoy) and that F would otherwise have to purchase out of F's personal stores/sources of cash. The things purchased can be fungible or not; it really doesn't matter so long as F doesn't have to pay for them out of F's own money. Obviously, it doesn't take much imagination to see how F can direct "shady" individuals with whom F is involved to donate to C rather than make a payment directly to F.

It's also important to note that the distinction between a public charity (operating foundation) and a private foundation (non-operating) affects the deductibility of monies donated; therefore knowing from where the 501(c) organization receives its revenue is important for whether donations are subject to the 50% rule or the 30% rule will be determined by the entity' status, and that status is determined in part by a sources of income test ("support test").

Xelor said:

Oh, so free speech in the form of big-money contributions can only happen when one isn't required to be accountable for having "spoken." So now the DoTr. is of the mind that everyone should be free to "speak" and "say" what they want, which everyone already is, but the rest of us aren't entitled to know who's "speaking."

That's not boosting freedom of expression. It's forbearing cowardice.

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Yeah, I remember very well back before Citizens United was decided Sen. McConnell arguing for eliminating the restrictions on donor limits because sunlight is the best medicine and disclosure would prevent undue influence, etc. So the GOP got their limits removed - the dark money groups can raise as much as they want from any one person - $500 million? no problem! And now they're trying like heck to keep the donors hidden.

The bad faith at every step of recent developments in campaign finance is pretty stunning. What right wing leaders want is not only a system where a few plutocrats can dominate our politics, but to do so in total secrecy. It's stunning, really. And defending it on "free speech" grounds is, as you say, insulting.

JasperL said:

Yeah, I remember very well back before Citizens United was decided Sen. McConnell arguing for eliminating the restrictions on donor limits because sunlight is the best medicine and disclosure would prevent undue influence, etc. So the GOP got their limits removed - the dark money groups can raise as much as they want from any one person - $500 million? no problem! And now they're trying like heck to keep the donors hidden.

The bad faith at every step of recent developments in campaign finance is pretty stunning. What right wing leaders want is not only a system where a few plutocrats can dominate our politics, but to do so in total secrecy. It's stunning, really. And defending it on "free speech" grounds is, as you say, insulting.

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Red:
I don't know who was bamboozled by McConnell's BS back then, but I know that disclosure has no bearing on one's ability to "purchase" influence via lawful largesse. Disclosure only makes known the nature, timing and extent of the largesse one bestowed.

The same concept that gave rise to the U.S. Senate's very existence is the operative one in evaluating the nature and extent of influence donation size can have on donation recipients. How McConnell, as a senator, could assert that disclosure would prevent undue influence and expect anyone, most especially other senators, to think that notion held water is beyond me.

Xelor said:

Oh, so free speech in the form of big-money contributions can only happen when one isn't required to be accountable for having "spoken." So now the DoTr. is of the mind that everyone should be free to "speak" and "say" what they want, which everyone already is, but the rest of us aren't entitled to know who's "speaking."

That's not boosting freedom of expression. It's forbearing cowardice.

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Yeah, the equivalent of what happens on the internet where many express themselves without consequence since they can benefit from anonymity.

Xelor said:

The NRA isn't really the sort of organization of which the donor list interests me all that much, though to be sure it and other non-profit organizations are plausiby fronts for corporate money laundering, but I'm not at the point of just calling the NRA or other large public charities (aka, "private operating foundation") "fronts" and "money launderers."

Could they be? Yes; any 501(c) organization can be, but it takes a lot of collusion for that to happen in a large public charity because public charities actually have operations and internal controls and degrees of separation between parties in the cash receipts and expenditure cycles' processes that make collusion of that sort hard to undertake without raising suspicion.


I'm more concerned about private foundations and political action committees. The former because they are tailor made for money laundering. The later because of federal election laws prohibiting donations from foreign persons and entities, those laws being in place to help deter foreign influence in our elections.

The basics of how it works is straightforward:

Objective: Convert other people’s money to your money.​

1. 
   [*=1]F establishes “charity” C.
   [*=1]C collects other people’s money.
   [*=1]C donates other people’s money to another charity run by a related party (co-conspirator) A.
   [*=1]A uses the money C donated to A to buy services from one of F's businesses, usually at inflated prices.

Goal achieved.
​

There are, of course, variations on the process. One is that F directs C to uses the money collected from other people to purchase things on F's behalf (that only F can use/enjoy) and that F would otherwise have to purchase out of F's personal stores/sources of cash. The things purchased can be fungible or not; it really doesn't matter so long as F doesn't have to pay for them out of F's own money. Obviously, it doesn't take much imagination to see how F can direct "shady" individuals with whom F is involved to donate to C rather than make a payment directly to F.

It's also important to note that the distinction between a public charity (operating foundation) and a private foundation (non-operating) affects the deductibility of monies donated; therefore knowing from where the 501(c) organization receives its revenue is important for whether donations are subject to the 50% rule or the 30% rule will be determined by the entity' status, and that status is determined in part by a sources of income test ("support test").

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Correction:

JasperL said:

https://www.reuters.com/article/us-...-of-dark-money-political-donors-idUSKBN1K704F



That's good news for dark money contributors, and those who might want to funnel foreign money into our elections process - there is no need for dark money groups to disclose to anyone who their big fat cat donors are. Thank goodness for that - what we need is more unknown plutocrat and corporate donors dominating the election process in this country, and for their identities to be hidden from EVERYONE!

BTW, the article does note that this data wasn't publicly disclosed before and won't be now, so that doesn't change. What the change does do is make it even more difficult to detect the influence of perhaps illegal donors, and give them more confidence they all can buy influence without the public knowing who is buying what.

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Can you provide a source to indicate that there is: "no need for dark money groups to disclose to anyone"

I think perhaps the Federal Election Commission would still be involved and require such donations for political contributions.

AliHajiSheik said:

Can you provide a source to indicate that there is: "no need for dark money groups to disclose to anyone"

I think perhaps the Federal Election Commission would still be involved and require such donations for political contributions.

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It appears that they don't, unless they donate and earmark their contributions for certain purposes, which the donors who want to hide their identity simply won't do. Here's a summary of the rules: https://afjactioncampaign.org/wp-content/uploads/2017/03/501c4-Reporting.pdf

At any rate, I've never heard that the dark money groups have to disclose donors to anyone if they arrange themselves properly, which we can assume they'll do if they want to remain secret. If you have different information, I'm willing to learn!

Just as an aside, the FEC is a joke and we all know it. The IRS might audit the bigger 501(c)(4)s but now that's the only way anyone will ever know if some group gets $500 million from a single LLC that might be a conduit for Saudi money or whatever. So it's a loss for any notion of transparency in our elections, which IMO is a big loss for the system as a whole. I'd far prefer the opposite - more or less immediate disclosure of all contributions to any group that engages in political activity. I don't see the need for secrecy when the goal is to mess with our political system.

Why should we NOT know that Mr. Pharma worth $10 billion spends $100 million to elect President Sanders or whoever? I can almost get the concept that money restrictions are a restriction on free speech, but not that those donors must, as a matter of protecting their 'rights', be allowed to be secret when they use their money to speak.