By a 3-2 vote, the Federal Election Commission on Thursday rejected a national tea party group's request to stop disclosing its donors under an exemption that originated with protections given to the NAACP and its members who faced violence during the Jim Crow era.
Here's the background: The Tea Party Leadership Fund is a year-and-a-half old political outfit that has received $2.5 million in donations from some 600 contributors. The Fund makes independent expenditures and also contributes directly to candidates, including Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) and Reps. Paul Broun (R-Ga.) and Steve Gaines (R-Mont.). Earlier this year, the Fund handed the FEC 1,400 pages of what it said was evidence of "harassment, threats, and reprisals" against the group and its donors. Citing all that evidence, the group asked the FEC for an exemption so that it no longer had to disclose its donors and other vital campaign finance information.
This exemption has been granted only rarely by the FEC: The most prominent recipient is the Socialist Workers Party, which has received this exemption for several decades after showing considerable evidence of threats and harassment of their supporters. (The NAACP's exemption was granted by the Supreme Court in 1958, which set a precedent for future exemptions.)
The decision over whether to give the Tea Party Leadership Fund the same exemption has been closely watched by campaign finance advocates and election lawyers. Some feared granting the exemption could set a precedent allowing many other political committees who felt harassed to get the same treatment, gradually eroding the nation's disclosure laws. "If the FEC allows it, it's a very slippery slope of this group and that group and this group all getting exemptions, too," says one Democratic campaign finance lawyer.
Opponents of the Tea Party Leadership Fund's request also argued that what the group considered harassment was far less severe than what the NAACP and Socialist Workers Party faced. "This tea party group comparing itself to the NAACP of old, whose membership feared for its lives and its livelihoods, would fail the laugh test if their request was not so offensive and so outrageous on its face," Paul S. Ryan, a lawyer with the Campaign Legal Center, said on Wednesday.
At Thursday's meeting, the FEC's commissioners split on the matter. Republicans Matthew Petersen and Caroline Hunter agreed with the tea party group, citing the scandal over the IRS' targeting of tea party groups applying for tax-exempt status. The Democrats broke the other way. Chair Ellen Weintraub quoted Supreme Court Justice Antonin Scalia's 2010 comment that "running a democracy takes a certain amount of civic courage"; tea party donors, she said, needed to show that courage. Democrat Ann Ravel, meanwhile, agreed with the Campaign Legal Center's argument that the Tea Party Leadership Fund's evidence of harassment paled in comparison to what the NAACP and Socialist Workers Party experienced.
On Friday, May 10, a top official with the Internal Revenue Service dropped a bombshell. IRS staffers had singled out conservative organizations with "tea party" or "patriots" in their name that were seeking tax-exempt nonprofit status, subjecting them to extra scrutiny to see if they were abusing the tax law as it relates to political activity. They grilled these conservative groups about their members, their donors, their public statements, and who they employed. And there is no evidence yet that the IRS systemically treated non-conservative groups with the same level of attention.
Speaking to a group of tax lawyers, the IRS official, Lois Lerner, who oversees the agency's exempt organizations division, publicly apologizedfor the IRS's actions. Ever since, Democratic and Republican politicians have beenfalling over themselves to condemn the IRS. President Obama said that, if the allegations are true, "there's no place" for such behavior. Members of Congress have pledged to investigate any potential wrongdoing and grill the agency's leaders. "Heads need to roll" if the IRS unfairly targeted tea partiers and other conservatives, said Rep. Adam Schiff (D-Calif.).
Here's a primer on what you need to know about the IRS scandal.
How did this get started? It began back in March 2010, when the tea party movement was all the rage. According to a leaked timeline (PDF) from a draft report by the Treasury inspector general for tax administration, IRS staffers began flagging applications from groups with politically themed names like "We the People" and "Take Back the Country." Staffers also targeted groups whose names included the words "tea party" and "patriots." Those flagged applications were then sent to specialists for a more rigorous review than is typical.
The IRS gave extra scrutiny to 298 groups applying for tax-exempt status, the Washington Postreported. Seventy-two of those groups had "tea party" in their title, 13 had "patriots," and 11 had "9/12," shorthand for the 9/12 movement started by conservative TV host Glenn Beck.
Americans for Tax Reform, the conservative advocacy group run by activist Grover Norquist, plunged headlong into federal elections in 2012, urging voters in California, Colorado, and Ohio to oust Democratic lawmakers. In all, ATR told the Federal Election Commission that it spent nearly $16 million last year on independent expenditures—political ads urging voters to support or defeat a particular candidate that aren't coordinated with any candidates or parties.
Norquist's group recently submitted its 2012 tax filing to the IRS, detailing all its spending for last year. In that filing, ATR says it spent just $9.8 million on politics in 2012—a difference of some $6 million compared to what ATR told the FEC.
On Tuesday, Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group, seized on that discrepancy in a complaint filed with the IRS and Justice Department. CREW alleges that Norquist's group misled the IRS about the extent of its political spending.
ATR may have had reason to low-ball the political spending figures it reported to the IRS. Norquist's group is a 501(c)(4) nonprofit, also known as a social welfare organization. Under the tax law, 501(c)(4) nonprofits such as ATR—which do not have to disclose their donors—can wade into campaigns and elections but cannot spend a majority of their money on political activities. From only reading ATR's 2012 tax filing, the group appears to abide by that restriction: ATR reported spending a total of $30 million in 2012, only $9.8 million of which went toward politicking. No issue there.
But if ATR in fact spent nearly $16 million of its $30 million budget on politicking, as CREW claims it did, then that's a different story. "ATR's own IRS and FEC filings provide incontrovertible evidence that ATR is breaking the law," CREW executive director Melanie Sloan said in a statement. "If Al Capone could be nailed for tax violations, so can Grover Norquist."
ATR spokesman John Kartch says CREW's complaint is "baseless" and "nonsense." He added, "Americans for Tax Reform's reporting strictly abides by the definitions of political activity and political expenditures maintained by the FEC and IRS."
Read CREW's complaint against ATR:
This isn't the first time CREW has accused Norquist and ATR of misleading the IRS. In March 2012, the watchdog claimed that ATR failed to report to the IRS more than $2 million in political spending in 2010. (The group told the FEC it spent $4.2 million on independent expenditures, but it told the IRS its political outlays were just $1.85 million.) Neither the Justice Department nor the IRS has responded to CREW's 2012 complaint.
Nor is the ATR the only political group facing questions about its tax filings. The Center for Public Integrity recently reported that an anti-Obama nonprofit with ties to the Koch brothers, the American Energy Alliance, told the IRS it engaged in no "direct or indirect political campaign activities on behalf of or in opposition to candidates for public office" in 2012. Yet the group spent more than $1 million on TV ads in Virginia and Ohio last fall urging viewers to "vote no on Obama's failing energy policy." An American Energy Alliance spokesman said the ads were in no way political, but Marcus Owens, a former IRS official, said the group's tax filing "certainly raises a red flag."
The impetus for Warren's comments came on Tuesday, when Senate Republicans filibustered President Obama's nominee to the influential DC Circuit Court of Appeals, Georgetown Law Professor Cornelia Pillard. If she's ever confirmed, Pillard would be the fourth woman on this important federal appeals court, which decides often-consequential cases between the federal government and private parties. Senate Republicans have also filibustered Patricia Millett's nomination to the appeals court and say they plan to block another appeals court nominee, Robert Wilkins, as well.
In the face of all this obstruction, Warren has joined progressive stalwarts such as Sens. Jeff Merkley (D-Ore.) and Tom Udall (D-N.M.) in demanding real changes to how the filibuster is used. "So far they have shut down the government, they have filibustered people [President Obama] has nominated to fill out his administration, and they are now filibustering judges to block him from filling any of the vacancies with highly qualified people," she said. "We need to call out these filibusters for what they are: Naked attempts to nullify the results of the last election."
Warren went on: "If Republicans continue to filibuster these highly qualified nominees for no reason other than to nullify the president's constitutional authority, then senators not only have the right to change the filibuster, senators have a duty to change the filibuster rules," Warren said. "We cannot turn our backs on the Constitution. We cannot abdicate our oath of office."
Whether Warren's call for filibuster reform results in any actual changes is unlikely. The closest we've come in recent years to real filibuster reform came in July, when Senate Majority Leader Harry Reid grew so angry at the GOP's use (abuse, according to the Democrats) of the filibuster that he almost used the so-called "nuclear option"—changing the Senate rules so that a nominee could be confirmed with a simple 51-vote majority instead of 60 votes. At the last moment, Reid, Senate Minority Leader Mitch McConnell, and Sen. John McCain (R-Ariz.) cut a deal to avoid the nuclear option and instead confirm a slate of Obama nominees, including EPA administrator Gina McCarthy and Secretary of Labor Tom Perez.
Plan for more close calls like Reid's July showdown—but with both parties wary of losing the filibuster as a tool for minority power, don't expect major reform any time soon.
She's going to run and there's nothing anyone can do to stop her.
So goes the conventional wisdom surrounding Hillary Clinton's potential bid for the White House in 2016. And why shouldn't the former Secretary of State be the inevitable Democratic nominee? She's a household name, a prodigious fundraiser, and well-liked within her own party. In a recent survey by Public Policy Polling, 67 percent of Democratic primary voters said they supported her. Vice President Joe Biden finished a distant second with just 12 percent. The question isn't Will Hillary run? or Will she win the nomination? It is: Which Republican might she face? That list is long and changing daily: New Jersey Gov. Chris Christie, Sen. Rand Paul (R-Ky.), Gov. Bobby Jindal, Gov. Scott Walker, Sen. Ted Cruz (R-Texas), etc.
Not so fast, Noam Scheiber writes in the new cover story for the New Republic magazine. Clinton is anything but inevitable (remember 2008?), he argues, and in fact there is a Democratic challenger who poses a grave threat to Hillary's presidential aspirations, an "insurgent" who captures the party's growing populism and anti-Wall Street fervor better than any other Dem in the party: Senator Elizabeth Warren.
The delightfully bizarre cover of the new TNR dubs Warren "Hillary's Nightmare," and Scheiber makes a damn convincing case for why Warren, far more than Clinton, is the candidate most attuned to an angry and disillusioned Democratic base in 2013 (and, presumably, 2016). Scheiber cites poll after poll revealing a Democratic Party—in the Beltway and beyond it—moving closer to Warren's populist worldview:
Gallup finds that the percentage of Democrats with “very negative” views of the banking industry increased more than fivefold since 2007, while the percentage who have positive views fell from 51 to 31. Between 2001 and 2011, the percentage of Democrats who were dissatisfied with the “size and influence of major corporations” rose from 51 to a remarkable 79.3.
Of course, any prediction of a populist revolt against the party’s top brass must grapple with the tendency of such predictions to be wrong. From the Howard Dean campaign in 2004 to the Occupy Movement in 2011, the last decade in Democratic politics has been rife with heady declarations of grassroots rebellion, only to see the insiders assert control each time. Even the one insurgency that did succeed, the Obama campaign, was quickly absorbed into the party establishment, from which Obama was never so far removed in the first place.
But three developments suggest this time really could be different. The first is that, even at the elite level, the party has changed far more over the last few years than is widely understood. Chris Murphy, the Connecticut senator, estimates that not too long ago, congressional Democrats were split roughly evenly between Wall Street supporters and Wall Street skeptics. Today, he puts the skeptics’ strength at more like two-thirds. Warren told me she attributes this to the disillusionment surrounding Dodd-Frank, which ushered in a range of new regulations but left the details to regulators, who promptly caved.
There is also the fact that, unlike other liberal challenges, this one has broad national reach. The pollster Celinda Lake has found that support for “tougher rules” for Wall Street obliterates party lines, increasing in the last two years from more than 70 percent to more than 80. In South Dakota, a state Mitt Romney carried by 18 points, a recent poll showed Democrat Rick Weiland, an obscure ex-aide to Tom Daschle, a mere six points behind the state’s former Republican governor for a soon-to-be-vacant Senate seat. The animating principle of Weiland’s campaign is that government per se isn’t the problem; the problem is a government taken over by “big-money interests.” The same poll showed voters agreeing with this statement by a 68-to-26 margin.
Scheiber also teases out a fundamental and crucial difference between Clinton and Warren. The Clintons are seen as innately political creatures, the products of three decades spent running for office, raising money, and wielding power. As Scheiber writes, "The long-standing knock on the Clintons...(unfair in many ways) is that they primarily represent the cause of themselves." Warren has one cause and it is the reason she got into academics, public policy, and, later, politics: improving the lot of working people. Yes, she covets the spotlight and the media's attention whenever possible, but she does so for the purposes of advancing that cause. It's an important point that Scheiber does well to highlight:
Everything from her public denunciations of Clinton to her lobbying to lead the CFPB to her eventual Senate run was motivated by a zealous attachment to the cause that has preoccupied her since childhood, not necessarily an interest in holding office. In October of 2010, Eliot Spitzer, the former New York governor, was launching a show on CNN and was thrilled to land Warren as his inaugural guest. But Spitzer planned to open the broadcast calling for Geithner’s head and worried that his monologue might violate some delicate protocol. Geithner was officially Warren’s boss at Treasury, after all. He held a key vote over whether she would run the consumer agency. But when Spitzer offered to skip the diatribe, Warren didn’t even pause to mull it over. “No, it’s fine with me,” she told him flatly.
The threat Warren poses is not lost on Clintonland. Nor is she easily dismissed as another Bill Bradley circa 2000 or Howard Dean circa 2004. Her folksy, working-class message is far too appealing, especially to voters in, say, Iowa (cough, cough). Factor in Warren's footprint in the Boston media market, which reaches well into first-in-the-nation New Hampshire, and a roadmap to the nomination begins to look somewhat feasible.
Can Hillary and her team can do anything to keep Warren from running? Doubtful. "She has an immense—I can't put it in words—a sense of destiny," a former Warren aide told Scheiber. "If Hillary or the man on the moon is not representing her stuff, and her people don’t have a seat at table, she'll do what she can to make sure it’s represented." The decision is Warren's: Is the White House next on her lifelong crusade for working people?
Warren typically denied any speculation about her presidential ambitions for Scheiber's story, sticking to her talking points. "You've asked me about the politics," she said. "All I can do is take you back to the principle part of this. I know what I am in Washington to do: I’m here to fight for hardworking families."As for TNR's bold prediction, there's this caveat: In November 2005, the magazine toued then-Sen. Russ Feingold on its cover as "The Hillary Slayer." You can see how well that worked out.