By NICHOLAS CONFESSORE
Published: November 26, 2013
he Obama administration on Tuesday moved to curb political activity by tax-exempt nonprofit organizations, with potentially major ramifications for some of the biggest and most secretive spenders in American politics.
New rules proposed by the Treasury Department and the Internal Revenue Service would clarify both how the I.R.S. defines political activity and how much nonprofits are allowed to spend on it. The proposal covers not just television advertising, but bread-and-butter political work like candidate forums and get-out-the-vote drives.
Long demanded by government watchdogs and Democrats who say the flow of money through tax-exempt groups is corrupting the political system, the changes would be the first wholesale shift in a generation in the regulations governing political activity by nonprofits.
The move follows years of legal and regulatory shifts, including the Supreme Court’s Citizens United ruling in 2010, that have steadily loosened the rules governing political spending, particularly by those with the biggest bank accounts: corporations, unions and wealthy individuals.
But the proposal also thrusts the I.R.S. into what is sure to be a polarizing regulatory battle, with some Republicans immediately criticizing the proposal on Tuesday as an attack on free speech and a ploy to undermine congressional investigations into the agency’s handling of applications from Tea Party groups.
“Before rushing forward with new rules, especially ones that appear to make it harder to engage in public debate, I would hope Treasury would let all the facts come out first,” said Representative David Camp of Michigan, the chairman of the House Ways and Means Committee.
Political spending by tax-exempt groups — from Crossroads Grassroots Policy Strategies, co-founded by the Republican strategist Karl Rove, to the League of Conservation Voters — skyrocketed to more than $300 million in 2012 from less than $5.2 million in 2006, according to the Center for Responsive Politics.
Much of the money has been funneled through chains of interlinked nonprofit groups, making it even harder to determine the original source.
And unlike political parties and “super PACs,” political nonprofits are permitted to keep the names of donors confidential, making them the vehicle of choice for deep-pocketed donors seeking to influence campaigns in secret.
The new rules would not prohibit political activity by nonprofits.