In an extraordinary bit of Orwellian ‘newspeak’, so-called ‘social welfare nonprofits’ in the US are using the many holes in the tax system to channel funds into political campaigns (predominantly right-wing Republicans) that circumvent state and federal rules on political donations. Organizations such as ‘Americans for Prosperity’, ‘The American Future Fund’, ‘Center for Individual Freedom’, ‘American Families First’, the ‘Republican Jewish Coalition’ and many others use the ‘social welfare nonprofits’ section of the Federal tax code – also known as 501(c)(4) – to hide both their income levels and the identities of their donors. An investigation by Pro-Publica exposes the huge volumes of ‘dark money’ (hidden by the tax code, but also being channeled through offshore trusts) that have funded the 2012 election campaigns. The IRS does not regard these organisations as a priority and in any case would be unlikely to be able to penetrate the layers of secrecy built in to the funding structures. As the Pro Publica piece argues:
Some experts … compared the transactions to Russian nesting dolls, with each layer opening to reveal another, equally inscrutable one underneath. Even if a social welfare nonprofit had to reveal the donors behind an ad, it would be another nonprofit. There would be no way to trace the money to the original source.
The PBS site Frontline also reports on the strange tale of documents found in a ‘meth house’ in Colorado that detail the activities of one ‘social welfare nonprofit’ called the ‘Western Tradition Partnership’. Presumably the ‘western tradition’ in this instance refers to the reputation of those inhabiting the US frontier for disregarding the law and, in the case of the meth house, extensive use of illicit stimulants.
In any case, a great day dawns for democracy where ‘dark’ spaces of tax-evasion are used to avoid taxes themselves, break the law with impunity, and promote the election of those who would further weaken the tax and regulatory powers of the US in the interests of the wealthy. And all in the name of ‘social welfare’.