The political network organized by Charles and David Koch plans to spend an incredible $889 million to capture the White House in 2016 and deepen the Koch party’s bench in Congress. But that’s not what they’ll tell federal regulators.
If history is a guide, the Koch network will claim that much of the nearly $1 billion it will funnel through an array of nonprofit groups is not about elections at all. Instead, the Koch groups will claim that their efforts to elect politicians who will lower capital gains taxes and overturn environmental regulations is really all about “social welfare.”
That’s what happened during the last presidential cycle.
The Kochs’ main political advocacy arm, Americans for Prosperity, spent $122 million in 2012—more than it had spent in its previous eight years of existence combined—but told the IRS that the vast majority of its spending had nothing to do with elections. AFP reported spending less than a quarter of its overall expenditures on electoral intervention, around $33.5 million, about the same amount that it reported in spending to the Federal Elections Commission.
Another group in the Koch network, the 60 Plus Association, spent around $18 million in the 2012 election year, but told the IRS that only $35,000 of that total had anything to do with electoral politics. Similarly, American Commitment spent $11.5 million in 2012, but told the IRS it spent only $1.86 million on elections. Wisconsin Club for Growth told the IRS that it spent $0 on elections in 2011 and 2012, despite spending $9.1 million on Wisconsin’s recall elections and working closely with Scott Walker’s campaign; the Center for Media and Democracy filed a complaint against the group last year.
Most of the groups in the ever-expanding Koch universe are nonprofits organized under Section 501(c)(4) of the tax code, whose primary activity is supposed to be “social welfare” rather than electoral politics. In turn, these nonprofits are allowed to keep their donors secret.
The Koch nonprofits assert that any ads or activities that don’t expressly tell viewers how to vote should count as “social welfare” rather than electoral intervention, a claim that in many cases would appear to be contradicted by IRS guidance and court decisions.
But a recent Center for Public Integrity analysis found that the IRS, hobbled by budget cuts and under intense political pressure, almost never audits nonprofits engaged in excessive political activity.
Politically active nonprofits are simply “not afraid of the IRS or anybody else on this matter,” Paul Streckfus, a former exempt organizations division employee, told CPI. “Anything goes as far as spending.”
The IRS proposed new rules for nonprofit political activity in late 2013, but pulled the guidelines amidst criticism that the proposal was both over- and under-inclusive. Groups like the Bright Lines Project have been urging the IRS to go back to the drawing board, but it is very unlikely that any new guidelines will be in place before the 2016 elections.
Which means that the Kochs will have free reign in 2016 not only to pour astonishing amounts of money into US elections, but—in contrast with traditional parties—to do so in secret, without disclosing the financial interests behind the spending.
The $1 billion the Koch network plans to spend in 2016 should dispel any doubts that the Kochs are operating their own secretly-funded shadow political party.
The level of resources that the Kochs and their donor-allies can muster can determine political futures. (Just ask Joni Ernst.) The “Koch primary” is now a vital part of the GOP presidential race, where Oval Office hopefuls like Scott Walker, Chris Christie, and Marco Rubio drop everything to attend Koch confabs. For Republican presidential contenders, appealing to the handful of wealthy donors in the Koch network is at least as important as building support among voters in Iowa and New Hampshire.
And as the Kochs continue to ramp up their political spending, it will only further solidify the network’s role as a dominant (and shadowy) force in US elections.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy