Republicans Gear Up to Eviscerate the Campaign-Finance Rules

AP Photo/Molly Riley

President-elect Donald Trump, accompanied by his wife Melania, and Senate Majority Leader Mitch McConnell of Kentucky in Washington on November 10, 2016. 

Donald Trump’s ethics conflicts and billionaire-heavy cabinet appointments are making news these days, but an even bigger special-interest bonanza is on the horizon, when Republicans make good on their plans to knock down what remains of the campaign-finance laws.

A Supreme Court that includes a Trump appointee will likely uphold a constitutional challenge to the 14-year-old ban on soft (unregulated) money that is now wending its way to the high court. Contribution limits, long reviled by Republicans who now control Capitol Hill, are on the chopping block. Most alarmingly, Trump has pledged to end the ban on partisan political activity by charitable groups, raising the specter of what one tax expert has called “Charity PACs” that would operate in total secrecy while handing wealthy donors a federal subsidy.

This last plan, which is also part of the Republican Party platform and the centerpiece of a House GOP bill, was actually the one specific campaign-finance proposal that Trump spelled out while running for president. For all his pledges to send special interests packing, Trump actually never released an agenda of proposed campaign-finance reforms. He’s taken what watchdogs say are inadequate steps to avoid business conflicts of interest, and rolled out a series of new lobbying restrictions—but his political money agenda has been largely a blank.

Nevertheless, in a September address to social conservatives, Trump pledged to repeal a 1954 tax law that limits lobbying by 501(c)(3) charitable groups, and bars them completely from campaigning for or against candidates. Widely known as the Johnson Amendment because it was first proposed by then-Senator Lyndon B. Johnson, the rule has come under attack in recent years from evangelical religious leaders who say it squelches their free speech.

It’s not clear whether Trump wants to lift the political activity ban just for churches, or for all charitable groups, which run the gamut from colleges to think tanks, museums, and animal shelters, and which collect more than $370 billion in tax-deductible contributions every year. It’s also not clear how Trump’s plan to free up charities for political donations fits in with his proposal to cap tax write-offs, including charitable donations. Whatever the case, any move to drag charities into elections would damage both the political system and the charitable sector.

Any rule that gives religious groups political freedoms not bestowed on other charities would violate both the First Amendment and the constitutional separation of church and state, says Robert Tuttle, a professor of law and religion at George Washington University. Tuttle pointed to the Supreme Court’s 1989 ruling in Texas Monthly v. Bullock that struck down a sales tax exemption for religious publications on the grounds that it conferred a government benefit on religion.

Expanding the political playing field to all charities is equally if not more problematic, because it creates a new type of tax-deductible political contribution, essentially offering a federal subsidy for campaign activity. This raises the possibility that superrich political donors could simultaneously dominate campaigns, hide their contributions—since charities operate outside the public disclosure rules—and enjoy a huge tax windfall.

Never mind that Republicans have long objected to public financing on the grounds that it amounts to taxpayer-funded elections—in this case, some conservatives appear perfectly prepared to embrace a federal subsidy for politics. In a 1930 case known as Slee v. Commissioner, federal judge Learned Hand held that the government should not favor one type of speech over another through tax subsidies, a principle known as the neutrality rationale, says Roger Colinvaux, a law professor at Catholic University’s Columbus School of Law.

Inviting charities into politics would also diminish public trust in the charitable sector, Colinvaux predicts. “I don’t think we really want ‘red’ charities, or ‘blue’ charities,” he says. “We want our charities to be nonpartisan, above politics and trusted institutions. And that’s one of the great things to me about our charitable sector.”

It’s a good bet that Congress would balk at changing the charitable laws, particularly if Trump attempts to impose a tough new cap on charitable deductions. But the fact that such a plan is even on the table illustrates just how far some Republicans and the new administration are prepared to go in deregulating big money. Republicans have already vigorously attacked any attempt by the Internal Revenue Service to rein in or even clarify the rules for politically active 501(c)(4) advocacy and social welfare groups, which spend more undisclosed money on campaigns with every election cycle.

The jarring disconnect between Trump’s populist campaign promises and his embrace of special interests as president-elect is becoming increasingly clear to voters, 60 percent of whom now have concerns about his conflicts of interest. If Republicans succeed in throwing out what remains of the campaign-finance regulations—particularly if they usher in a new generation of “Charity PACs”—political money abuses, and public anger, will only intensify.

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