Foreign corporate donors who want to influence US elections are funding efforts to persuade the Internal Revenue Service (IRS) to drop donor reporting requirements, specifically the Schedule B form for 501(c) nonprofits.
Lee Fang filed this report for The Intercept:
In recent years, 501(c) nonprofits have become the entities of choice for secret campaign spending. These nonprofit groups, which do not have to report any donor information to the public, can receive unlimited contributions from any source and, thanks to the Supreme Court’s 2010 Citizens United decision, spend unlimited amounts on elections.
Foreign spending, whether by a foreign national or a foreign-owned corporation, is still illegal under federal law. But the law has been poorly enforced, and the few instances in which penalties have been applied in recent years have come in reaction to publicly reported foreign corporate spending to Super PACs, such as The Intercept’s reporting on Chinese corporate donations in 2016 and the recent federal indictment over a shell company owned by a Russian national that gave to President Donald Trump’s Super PAC in 2018.
The one check on foreign contributions to dark-money groups has been the Schedule B form, which reports 501(c) donor information confidentially to the Internal Revenue Service. Under a new rule proposed last September by the Treasury Department and the IRS, nonprofits will no longer be required to report donor information, even to the government, allowing an unprecedented level of secrecy. Lobbyists for foreign-funded groups have pushed the administration to move forward with the rule, which is close to being finalized.
“Congress has failed to pass new transparency legislation, and the FEC has failed to enforce the transparency laws that are on the books,” said Brendan Fischer, director of Campaign Legal Center’s federal reform program. “As a result, the only donor disclosure reports that dark-money groups file with any federal agency are the confidential Schedule B reports filed with the IRS. These confidential donor reports are one of the few ways that federal agencies could detect and deter foreign money in U.S. elections.”