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IRS Targeting of Conservatives: Indisputably Political

Posted By Matthew Vadum On May 23, 2013 @ 12:55 am In Daily Mailer,FrontPage | 16 Comments

To order David Horowitz and Jacob Laksin’s The New Leviathan: How the Left-Wing Money Machine Shapes American Politics and Threatens America’s Future, click here.

Despite propaganda relentlessly churned out by the mainstream media to justify the Obama IRS crackdown on conservative groups, the fact remains that the American Right is severely outgunned by the much better funded Left. And while highly political left-wing organizations far outpace their conservative counterparts in number and assets, they have never been subjected to the kind of rigorous scrutiny and interference that the IRS has recently inflicted on right-wing groups, making allegations of partisan abuse by the agency difficult to refute.

CNN legal analyst Jeffrey Toobin stands as a case in point of the kind of misinformation being peddled by the Left to shield the Obama administration from the IRS scandal. Toobin writes in the New Yorker that Obama’s IRS didn’t do anything wrong. The Tea Party groups targeted by Obama’s bureaucrats got what was coming to them. Those organizations

were seeking approval to operate under section 501(c)(4) of the Internal Revenue Code. This would require them to be “social welfare,” not political, operations. There are significant advantages to being a 501(c)(4). These groups don’t pay taxes; they don’t have to disclose their donors—unlike traditional political organizations, such as political-action committees. In return for the tax advantage and the secrecy, the 501(c)(4) organizations must refrain from traditional partisan political activity, like endorsing candidates.

If that definition sounds murky—that is, if it’s unclear what 501(c)(4) organizations are allowed to do—that’s because it is murky. Particularly leading up to the 2012 elections, many conservative organizations, nominally 501(c)(4)s, were all but explicitly political in their work.

However, as David Horowitz and Jacob Laksin show in their meticulously researched 2012 book, The New Leviathan: How the Left-Wing Money Machine Shapes American Politics and Threatens America’s Future, the greatest exploiters of the “murkiness” of “social welfare” activism are by far left-wing organizations. The collective assets of liberal-progressive grant-making foundations are in fact 10 times the size of the assets of conservative foundations.

DiscoverTheNetworks.org, a website run by the David Horowitz Freedom Center, identified 115 major progressive or left-leaning foundations. In 2010, it found the progressive foundations had total assets of $104.56 billion.

The left-leaning National Committee for Responsive Philanthropy and Think Progress, a popular blog run by the Center for American Progress Action Fund, identified 82 major conservative grant-making foundations. In 2010, they found the conservative foundations had total assets of just $10.29 billion.

The progressive foundations awarded $8.81 billion in grants compared to the conservative foundations’ paltry $831.8 million in grants. As long as grant makers “don’t violate IRS rules that bar direct contributions to candidates and parties, tax-exempt foundations can operate without constraints,” Horowitz and Laksin write.

This vast network of left-wing funders and activist groups dwarfs anything the activist Right has to offer. It is “self-sufficient and self-perpetuating … an aristocracy of wealth whose dimensions exceed any previous accumulations of financial power, whose influence already represents a massive disenfranchisement of the American people and whose agendas pose a disturbing prospect for the American future,” according to the authors.

For example, Horowitz and Laksin also show that the Left thoroughly dominates two huge areas of interest-group warfare today: immigration and environmentalist activism.

In immigration, they found that there are nine major conservative groups “that support traditional immigration policies” and 117 progressive groups “that support radical departures from traditional immigration policies and notions of sovereignty.”

The conservative groups (e.g. Federation for American Immigration Reform, NumbersUSA Foundation) have net assets of $15.05 million (based on annual revenues of $13.8 million), compared to the $194.67 million in net assets (based on annual revenues of $306.11 million) held by progressive groups (e.g. National Council of La Raza, Redlands Christian Migrant Association).

In other words, progressive immigration groups have 22 times the revenues that their conservative counterparts have.

In the world of environmental activism, Horowitz and Laksin report that there are 32 major conservative groups that “promote market-friendly solutions” and 552 progressive groups that “promote radical views that are anti-business.” Collectively, the conservative groups have net assets of $38.24 million, a figure that seems insignificant compared to the $9.31 billion figure representing the progressive groups’ combined net assets.

The progressive environmental groups enjoy a 37 to 1 advantage over conservative environmental groups in revenues ($3.56 billion compared to $96.17 million).

And left-wing groups almost never face the kind of heightened IRS scrutiny to which conservative groups are subjected. Republican Richard Nixon may have used the IRS against perceived enemies of all political stripes, but IRS abuse is generally a tool of Democratic administrations. President Franklin Roosevelt directed the IRS to target newspaper publishers opposed to the New Deal and John F. Kennedy “raised the political exploitation of the IRS to an art form,” according to author James Bovard.

The Obama administration leaves its friends in the nonprofit community alone no matter how odious or reprehensible their behavior. Obama’s IRS harasses only right-of-center nonprofit groups.

Toobin goes on to lament the political nature of conservative 501c4 organizations, as if this were a unique characteristic of right-wing groups that would explain selective IRS harassment of them. For instance, Toobin writes that Americans for Prosperity (which also has a 501c3 affiliate), funded in part by the Kochs, are “[i]n every meaningful sense … operating as units of the Republican Party.” Such groups were “an instrumental force in helping the Republicans hold the House of Representatives” in the 2012 election.

One can argue about the precise impact AFP had on the last congressional election, but Toobin’s undue focus on AFP and other Koch-funded groups distracts from the fact that conservative organizations are consistently, dramatically outspent by their left-wing counterparts, which are deeply embedded in the Democratic political establishment and which operate unimpeded as arms of the Democratic Party.

For example, none of what conservative C4s have done is anywhere near as partisan as what ACORN, the left-wing poster child for nonprofit abuses, perpetrated in its 40-year reign of terror against American taxpayers.

For decades ACORN, with its intricate network of hundreds of nonprofit entities, defrauded Uncle Sam by spending government grants and tax-privileged dollars on partisan campaigns and voter drives that benefited Democrats exclusively. Every election cycle Project Vote, the ACORN affiliate President Obama worked for in 1992 and that Obama White House officials remain in close contact with to the present day, spends millions of tax-exempt dollars getting Democrats, dead or alive, to the polls.

Attorney General Eric Holder’s Justice Department never lifted a finger to investigate a nearly $1 million misappropriation from ACORN by Dale Rathke, the socialite brother of ACORN founder Wade Rathke. As I detailed in my book Subversion Inc., Dale blew ACORN employees’ pension money on parties, limousines, and shopping trips to New York.

President Obama’s 501c4 goon platoon, Organizing for Action, also enjoys tax-exempt status. Formally incorporated earlier this year, the Saul Alinsky-inspired, in-your-face group grew out of Obama’s election campaign and was previously called Organizing for America when it was a project of the Democratic National Committee.

And take the egregious case of Media Matters for America, which even the New York Times describes as a “highly partisan” organization. MMfA has been mysteriously immune from IRS audits.

Underwritten by George Soros, every working day the lavishly funded Media Matters churns out political propaganda calculated to pressure journalists into unquestioningly backing the Democratic Party line. It has absurdly characterized Chris Matthews and former New York Times editor Bill Keller as sellouts to the left-wing cause.

The organization’s CEO, the emotionally unstable former journalist and self-described “hit man” David Brock, declares that MMfA’s mission is to wage “war on Fox (News)” as well as “to disrupt [News Corp. CEO Rupert Murdoch's] commercial interests” and to turn regulators against his media outlets. MMfA claims to combat “conservative misinformation,” but concentrates its fire on Fox because it dares to air political viewpoints that sometimes overlap with the views of Republicans. The ultimate purpose of Media Matters is to silence opposition to the Left.

C. Boyden Gray, White House counsel to President George H.W. Bush, has complained to the IRS about MMfA, which he accurately describes as a “Democratic training camp.” (Any taxpayer may file an IRS Form 13909 with the Internal Revenue Service to complain about the conduct of a tax-exempt organization.) Gray notes that the group compiled an “enemies list” and had plans to engage investigators “to look into the personal lives of Fox News anchors, hosts,” and others.

“Anyone is free to promote or criticize political views of any stripe, using one’s own money and other resources,” Gray says. But MMfA’s “partisan success was built on a much different model: it uses the taxpayers’ subsidy, through Section 501(c)(3)’s tax exemption, to try to punish private persons and companies for airing political views.”

Giving Media Matters tax-exempt status affords it an advantage not enjoyed by its victim, Fox News. That tax-exemption in effect legitimizes MMfA “by having the government affirm that the organization’s operations are truly ‘charitable’ and therefore consistent with the nation’s public policies,” according to Gray.

As for the evil conservative corporate moneymen the Left and Toobin assail, Horowitz and Laksin’s research demolishes the idea that the activist Right in America is this huge, powerful empire bankrolled by right-wing counterparts to leftist billionaire donors like George Soros, Peter B. Lewis, and Herb Sandler. In reality, deep-pocketed conservative donors are generally hard to find. For every Sheldon Adelson (casino magnate), there are a dozen left-wing billionaires and millionaires like Tim Gill (software magnate), Rob McKay (Taco Bell heir), Anne Bartley (Rockefeller heiress), Pat Stryker (medical technology heiress), Susie Tompkins Buell (Esprit co-founder), Rob Glaser (RealNetworks), Norman Lear (Hollywood producer), and Rachel Pritzker Hunter (hotel heiress).

Toobin’s deeply flawed analysis of the IRS scandal unwittingly reveals the real reason those on the Left are countenancing the clearly politically motivated repression of conservative nonprofits and why the Obama IRS engaged in these tactics in the first place. As Toobin all but admits, Democrats view Tea Party groups, that is, right-wing populist 501c4 groups, as an existential threat to the Left. These 501c4s tend to be Republican-leaning organizations and they have been successful so far in derailing, or at least slowing, parts of President Obama’s ongoing transmogrification of America. (Note: Unlike donors to 501c3 groups, which tend to be educational in nature and less explicitly political than 501c4 groups, donors to 501c4 groups are not allowed to deduct their donations from their income tax. Organizations recognized under 501c3 of the Internal Revenue Code face stricter constraints on their behavior but are not required to publicly disclose their donors.)

Toobin and his ilk don’t think any conservative nonprofits ought to enjoy tax-exempt status because they are statists who view the rule of law as an obstacle to human progress. To them, teaching Americans to respect the Constitution and the God-given rights and freedoms it protects is not a legitimate activity, or at least not sufficiently legitimate to merit a tax exemption. These groups are working against the Left, standing in the way and preventing America from becoming a leftist utopia. They’re all enemy combatants. This is why numerous high profile Democratic politicians, like Sens. Al Franken and Chuck Schumer, had no reservations openly calling for the systematic targeting of right-wing groups and the selective suppression of conservative citizen inroads into an avenue of political power long monopolized by the Left.

As Jonathan S. Tobin (not to be confused with Jeffrey Toobin) beautifully sums up the leftist position in Commentary:

“As far as a lot of liberals are concerned, the problem here isn’t the Nixonian abuse of power by the IRS but the fact that these conservatives are being allowed to raise money to resist the policies of a liberal administration.”

The targeting campaign undertaken by the IRS was never about getting the tax code right. It was about getting the ideology right.

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