Friday, August 23, 2013

Follow up: Van Hollen Actually Does Sue!

Following up on my post from yesterday, Chris Van Hollen (and Democaracy 21, Campaign Legal Center, and Public Citizen) did file suit yesterday against the IRS and Treasury.   For those of you interested in reading the Complaint, it is in the District Court for D.C., Case 1:13-cv-01276.   I retrieved my copy from Bloomberg BNA online; if anyone has a public link, let me know and I'll post it.  A quick summary

1.  It's a proceding under the Administrative Procedure Act (APA), 5 U.S.C. 702/703/704/706(1)/and 706(2)(A), "to compel agency action unlawfully withheld and unreasonably delayed, and to set aside agency action that is contrary to law."

2.   Quote:  "By redefining 'exclusively' as 'primarily' in violation of the clear terms of its governing statutes, the IRS permits tax-exempt social welfare organizations to engage in substantial electoral activities in contravention of the law and the court decisions interpreting it" (p. 2).

3.  In answer to my question of yesterday, the Plaintiffs assert the following personal harms:

  • Denial of information regarding election expenditures as Section 501(c)(4) organization do not need to disclose donors, and
  • Candidates such as Van Hollen and their organizations must compete on unequal terms with tax-exempt organizations that are not subject to disclosure.

4.  The Complaint specifically alledges that the IRS' recent 40% safe harbor pronoucements allows too much non-exempt political activity.

5.  Quote:  "Electoral campaign spending by section 501(c)(4) organizations soared after the U.S. Supreme Court's decisions in FEC v. Wisconsin Right to Life ... and Citizens United v. Federal Election Commission .. , which, respectively, narrowly construed and then invalidated federal laws prohibiting corporate electoral campaign expenditures.  In the wake of those decisions, section 501(c)(4) organizations became the vehicles of choice for mobilizing anonymous contributions for political purposes." (p. 9, cites omitted).

6.  For those interested, the paragraphs that follow the quote above give some signficant figures regarding Section 501(c)(4) spending since Citizens United - e.g., in the 2012 presidential election, approximately $310 million in electoral campaign spending was by non-disclosing groups including section 501(c)(4) and 501(c)(6) organizations. (p. 11).

7.   The APA statutory standard of review is "arbitrary, capricious, and abuse of discretion, or not in accordance with law."  (p. 19).

EWW

 P.S. 8/26   Reader Russell Willis was kind enough to point me to the following link for the petition:

 http://www.democracy21.org/wp-content/uploads/2013/08/Complaint-August-20-final-for-filing.pdf

 

Thanks Russell!!!

 

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