Tales from the Trail

Feds unlikely to launch campaign finance probe anytime soon

October 26, 2010

For weeks, leading Democrats have castigated pro-Republican special interest groups involved in the current election campaign for what they describe as secretive fundraising practices. USA/

In an effort to call further attention to the activities of groups like American Crossroads GPS, a political fundraising committee which GOP guru Karl Rove helped to set up, some prominent Democrats and non-partisan election watchdogs have written law enforcement agencies demanding official investigations.

But there is little indication that any relevant agency is going to launch an  in-depth probe anytime soon.

In early October, the liberal activist group MoveOn.org sent a letter to the Justice Department demanding that it investigate allegations that the U.S. Chamber of Commerce had received election-related funds from unspecified foreign sources — something the Chamber emphatically denies. A similar request for an investigation was sent by Senator Al Franken, a Minnesota Democrat, to the Federal Election Commission.

Around the same time, two political finance watchdog groups, the Campaign Legal Center and Democracy 21, sent a letter to the Internal Revenue Service requesting an investigation into whether Crossroads GPS is violating its status as a tax-exempt organization by spending too much of its time and resources on electioneering.

Senator Max Baucus, chairman of the powerful Senate Finance Committee, also sent a letter to the IRS requesting that it conduct a broad “survey” of such tax exempt groups to see if they are following the rules or merit further inquiry.

Groups targeted by pro-Democrat and liberal activists for such complaints, including the Chamber of Commerce and Crossroads GPS, insist they are operating entirely within the law and vigorously deny any wrongdoing.

And for the moment there is no sign that any government agency is going to take any urgent action in response to the assorted requests for investigations. A Justice Department spokesman had no comment, and IRS officials say they never comment on the existence of tax-related investigations.

But an official familiar with Obama Administration policy on campaign finance told Reuters that the Justice Department is not likely to act any time soon on the complaints it has received from MoveOn.  And other campaign finance monitors say they see no indication that the IRS has decided to open a major investigation, though they also say that if such an investigation was under way, because of IRS confidentiality practices it might not become public for years. (A spokeswoman for Baucus referred inquiries to the IRS).

Campaign finance experts say that political gridlock at the Federal Election Commission, short-staffing and secrecy at the IRS, and a major Supreme Court ruling which made it easier for business groups to finance campaign ads have made it very difficult for Federal authorities to even investigate, let alone crack down on, some of the practices Democrats and activitists have complained about.

Photo credit: Reuters/Fred Prouser (Karl Rove in July 2008)

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