Potential for Abuse of Tax-Exempt Groups During Campaigns Looms Over Election

For many Democrats and campaign finance watchdogs, an organization known as the Commission on Hope, Growth, and Opportunity exemplifies how easily U.S. election laws can be gamed by tax-exempt organizations, the reports.

According to the Times, the organization received its tax-exempt status in 2010 after reporting to the that it had no plans to spend money on election campaigns. It then proceeded to launch a multimillion-dollar effort against eleven Democratic candidates in that year's midterm elections. In the process, the organization failed to report any of its political spending to the Federal Election Commission and did not register as a political action committee, which are required to disclose the names of their donors. Facing multiple FEC and IRS inquiries, the group eventually disbanded.

Before it did, however, the group, which managed to raise $4.8 million — $4 million of that from a single anonymous donor — succeeded in helping to defeat a number of Democratic incumbents, including John Spratt (D-SC), then chair of the House Budget Committee.

Indeed, since the Supreme Court's Citizens United decision, nonprofit organizations such as Priorities USA, which supports Democrats, and Crossroads GPS, which backs Republicans, have pulled in tens of millions of dollars from anonymous donors interested in influencing high-profile electoral contests, including this year's presidential race. An effort in the Senate earlier this week to require better public accounting of campaign donations failed to get a formal hearing.

And the Commission on Hope, Growth, and Opportunity? "I still don't know who they are," Spratt told the Times. "It's a classic case."

Jonathan Weisman. "." New York Times 07/16/2012.