A new liberal 501(c)(4) “dark money” group linked to the liberal House Majority PAC intends to spend millions on TV and digital ads to help Democrats maintain control of the House of Representatives. Internal Revenue Service rules stipulate that 501(c)(4) organizations cannot make politicking the primary purpose, yet the new group plans to devote 94% of its 2019 budget to ads.
OpenSecrets reported on Aug. 22, that a new 501(c)(4) dubbed House Majority Forward (HMF) had been created as an arm of the House Majority PAC. It planned to “spend almost all of its $10.4 million budget on ads helping Democrats in House races heading into 2020,” dodging IRS rules through careful framing.
HMF and House Majority PAC share staff, including Hillary Clinton’s 2016 campaign manager, according to OpenSecrets. The site detailed the “cozy relationship” between HMF and House Majority PAC, including the fact that the PAC website initially had “a since-removed disclaimer that it [HMF] was paid for by the super PAC.”
The new group anticipated spending the vast majority (94%) of its 2019 budget on ads to help Democratic candidates, according to OpenSecrets. This raised ethical concerns since IRS rules prohibit 501(c)(4) groups from too much “politicking.”
“The IRS does not have a bright-line rule for determining what constitutes too much politicking, but a general rule of thumb is that 501(c)(4) nonprofits are not allowed to devote more than half of their activities to political purposes,” it said.
HMF managed to skirt those rules and OpenSecrets explained how. It pointed out the group is framing ads as issues advocacy and using “artfully crafted” language that stops short of explicitly advocating for or against a candidate’s election.
“The spots hurl compliments at the democrats and urge viewers to call their representatives in Congress to thank them,” OpenSecrets wrote.
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ABC News reported on Aug. 26, that HMF paid for a “half a million-dollar” ad campaign to support Democratic candidate Dan McCready in North Carolina.
OpenSecrets noted that HMF had also kicked off ad blitzes in California and New Mexico to boost Democratic candidates. The group plans to raise $20 million for the 2019-2020 cycle, with more than half of that being allocated towards ad purchases, according to a July 25, Politico story.
This comes at a time when the Federal Election Commission (FEC), which is in charge of enforcing campaign finance law, is hobbled. Newsweek reported on Aug. 27, that it lost its vice-chairman on the day before, “essentially rendering the agency useless.”
In the 2018 election, House Majority PAC spent more than $72 million to help Democrats take majority control of the House, according to Open Secrets. Its top recipients included Planned Parenthood’s super PAC, which received $3,420,000.
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