For all the headlines and hand-wringing about super-PACs, it is dark-money nonprofits like Karl Rove’s Crossroads GPS and Americans for Prosperity that dominate the political money wars. These politically oriented groups, which keep their donors secret, outspent super-PACs 3-to-2 in the 2010 elections. Through the spring of 2012, 91 percent of advertising by independent groups came from nonprofits and big business trade groups. And a growing pile of evidence suggests that it’s these nonprofits, not super-PACs, hauling in the bulk of corporate political cash. But come Saturday, the dark-money nonprofits face a dilemma. A high-profile court case known as Van Hollen v. FEC threatens to shine an unwelcome beam of sunlight on donors bankrolling these organizations. Nothing’s stopping Crossroads GPS or AFP from running more “issue” ads hitting Obama and other Democrats (that is, ads that don’t explicitly say “vote for” or “vote against”). Except now nonprofits will have to reveal who funded those spots. Dark-money nonprofits don’t want to name names. Their pitch to donors includes the promise of anonymity and a shield from public scrutiny. This means that Crossroads GPS and other politically active nonprofits—which aren’t supposed to make politicking their primary purpose—have to rethink their ad strategy, election experts say. Do they shift money to super-PACs? Go dark in the months before the election? Find another loophole to run ads and keep their donors secret?
Tax and election law experts say that, short of shutting down, any new strategy carries significant risks. Run-ins with the Internal Revenue Service or the Federal Election Commission, the federal elections watchdog, could be on the horizon. “It’s a tough strategic choice for these groups,” says Joseph Birkenstock, an election law attorney and former chief counsel at the Democratic National Committee.
Here’s the quick-and-dirty version of how nonprofits including Crossroads GPS, Americans for Prosperity, and pro-Obama Priorities USA, among others, ended up in this bind. Until recently, nonprofits had exploited a federal loophole allowing them to run issue ads without disclosing the sources of their funding. These so-called social welfare organizations may also run ads directly backing or opposing candidates, but can’t run too many of them at the risk of running afoul of the IRS for being too political.
Full Article: Karl Rove’s Catch-22 | Mother Jones.