- Not enactedThe President has not signed this bill
- The senate has not voted
- The house has not voted
Committee on Ways and MeansIntroducedJanuary 30th, 2019
- house Committees
What is House Bill H.R. 918?
Cost of House Bill H.R. 918
In-Depth: Rep. David Price (D-NC) reintroduced this bill from the 115th Congress to reverse the Treasury Department’s recent decision allowing politically active non-profit organizations to avoid disclosing certain donor information to the IRS and compel these organizations to disclose major donors’ names to the public:
“The Trump administration’s decision to allow politically active organizations to obscure millions in dark campaign money further weakens our already failing campaign finance system. At a time when our elections are plagued by unlimited corporate spending, anonymous donors, and illegal foreign meddling, this action provides a mask to special interests and bad actors while diminishing the power of voters.”
House Speaker Nancy Pelosi (D-CA) adds:
“Our Founders pledged their lives, their liberty and their sacred honor to build a government of the many, not of the money. Congressman David Price and the House Democracy Reform Task Force have been champions in the fight to bring transparency and accountability to our campaign finance laws, and restore the full promise of our democracy. By joining the Senate to overturn this dangerous IRS guidance, Democrats are taking action to strengthen the voices of the American people and end the self-enrichment, dark money and special interests that threaten our democratic institutions. Guided by the vision and values of our Members and the priorities of the American people, the new Democratic Majority introduced H.R. 1, the For The People Act, to restore integrity in Washington and ensure that our government works for the public interest, not the special interests.”
Democracy 21 supports this bill. Its president, Fred Wertheimer, says:
“Democracy 21 strongly urges Representatives to support the CRA disapproval resolution sponsored by Representative David Price to invalidate the irresponsible Treasury Department rule that eliminates the existing requirement for nonprofit groups to disclose their donors to the IRS. Under existing law foreign governments can contribute unlimited amounts to nonprofit groups that spend money to influence elections. The elimination of the requirement for these contributions to be disclosed to the IRS opens the door for foreign interests to illegally launder huge sums through nonprofit groups to influence our elections without the government being able to know it is going on. If the new Treasury rule is not eliminated, a massive dark money loophole will be opened in our laws for foreign individuals, foreign corporations and foreign corporations to illegally spend unlimited amounts of money to influence our elections. Any Representative who opposes the Price the disapproval resolution will be supporting a dangerous dark money loophole for illegal foreign money to be secretly laundered into our elections.”
In September 2018, the Ninth Circuit Court ruled that the state of California could collect information about major donors to 501(c)4 charitable organizations, including PACs. However, the Ninth Circuit’s ruling did not make this information public, and California Attorney General Xavier Becerra’s office would only make it public in “very limited circumstances.”
However, the Supreme Court has said that forcing charitable groups, even those involved in politics, to disclose their donors’ names could chill free speech. Ray Cordato, a resident scholar at the John Locke Foundation who has defended anonymous speech and anonymous donations as essential to avoiding harassment and retaliation and preserving free speech and political dialogue, concurs, arguing:
“It’s clear what the purpose of this [bill] is. It’s a way of scaring people into not giving money to certain kinds of organizations. The fact of the matter is this is the kind of thing that was used against Martin Luther King and civil rights organizations [by racists seeking the names of their contributors]. Now it is [by] the Left, and everyone knows now they are all about intimidation.”
When announcing the Treasury Department’s July 2018 decision to exempt 501(c)4 organizations from disclosing their donor information to the IRS, Treasury Secretary Steve Mnuchin argued that the IRS doesn’t need these organizations’ donor information to do its job:
“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area. It is important to emphasize that this change will in no way limit transparency. The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected. The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”
This bill has nine cosponsors, all of whom are Democrats, in the current session of Congress. Last Congress, it had the support of 13 cosponsors, all of whom were Democrats. End Citizens United, Common Cause, and Democracy 21 support this bill.
A Senate version of this bill has been reintroduced by Sens. Ron Wyden (D-OR) and Jon Tester (D-MT). Last Congress, Sen. Tester introduced this bill in the Senate with the support of 28 cosponsors, all of whom were Democrats.
In addition to this bill, Sens. Tester and Wyden introduced a Congressional Review Act (CRA) resolution to reverse the Treasury Dept.’s decision in September. That resolution — which had the support of 41 cosponsors, including 39 Democrats and two Independents — passed the Senate by a 50-49 vote, but was never taken up for a vote in the House.
Of Note: In July 2018, the Treasury Department announced that it would begin allowing politically active 501(c)4 charitable organizations to shield some donor information from the IRS. 501(c)3 charitable organizations, whose donors can claim tax deductions from their contributions, are still required to disclose information about their donors to the IRS. 501(c)4 groups, whose donors generally can’t claim tax deductions, are exempted from sending donor information to the IRS.
Those who favor requiring nonprofits that engage in political activity to disclose their donor information argue that a lack of disclosure allows anonymous donors to spend huge sums of unchecked money to rig the system in their own favor.
During the 2018 cycle, dark money groups reported nearly $148 million in outside spending, not including money spent toward so-called issue ads aired before election season and other undisclosed political efforts, to the FEC. These groups also contributed over $176 million to super PACs in 2018.
- Sponsoring Rep. David Price (D-NC) Press Release
- Sponsoring Rep. David Price (D-NC) Press Release (115th Congress)
- End Citizens United Press Release (In Favor of Senate Version) (115th Congress)
- Treasury Department Decision on 501(c)3 Organizations
- Carolina Journal
Summary by Lorelei Yang(Photo Credit: iStock.com / D-Keine)