December, 06 2013, 10:48am EDT

For Immediate Release
Contact:
Angela Bradbery, Public Citizen at 202-588-7741 or abradbery@citizen.org
Kathryn Beard, Democracy 21 at 202-355-9600 or kbeard@democracy21.org
David Vance, Campaign Legal Center 202-736-2200 or dvance@campaignlegalcenter.org
Statement of Democracy 21, Public Citizen and the Campaign Legal Center on Withdrawal of Lawsuit Calling for New IRS Regulations on 501(c)(4) Groups and their Campaign Activities
Based on the IRS' announcement last week that it is undertaking a rulemaking proceeding to address the problems arising from campaign activities by 501(c)(4) groups, U.S. Rep. Chris Van Hollen, Democracy 21, Public Citizen and the Campaign Legal Center today dismissed without prejudice the lawsuit they filed in federal court to obtain such a rulemaking proceeding.
WASHINGTON
Based on the IRS' announcement last week that it is undertaking a rulemaking proceeding to address the problems arising from campaign activities by 501(c)(4) groups, U.S. Rep. Chris Van Hollen, Democracy 21, Public Citizen and the Campaign Legal Center today dismissed without prejudice the lawsuit they filed in federal court to obtain such a rulemaking proceeding.
The lawsuit, filed on Aug. 21, 2013, challenged the failure of the IRS to conduct a rulemaking proceeding to adopt new rules to properly implement the tax law's eligibility requirements for tax-exempt status as a 501(c)(4) "social welfare" organization.
Under the existing rules, 501(c) organizations spent more than $300 million in the 2012 federal elections, with the great bulk of those campaign expenditures made by 501(c)(4) organizations that kept secret the identity of the donors funding their campaign spending.
Van Hollen and the three organizations will closely monitor the IRS proceedings announced last week. If the agency fails to adopt new regulations to properly implement the tax laws and prevent groups from misusing the laws to obtain 501(c)(4) tax-exempt status, the lawsuit will be filed again.
The lawsuit built on a petition filed with the IRS in July 2011 by Democracy 21 and the Campaign Legal Center urging the agency to undertake a rulemaking proceeding to bring its regulations into compliance with a provision of the Internal Revenue Code requiring 501(c)(4) groups to be devoted "exclusively" to social welfare activities, which do not include campaign activities.
By regulation, the IRS has said that social welfare groups need only be "primarily" operated for social welfare purposes, a standard that has been interpreted to allow such groups to spend up to 49 percent of their funds on campaign activities. Because 501(c)(4) groups are not required to disclose their donors, the IRS regulations have permitted such groups to serve as vehicles to inject hundreds of millions of dollars from secret contributors into federal elections.
In its announcement last week, the IRS said that its rulemaking proceeding will consider specific changes to the definition of what constitutes "campaign-related activity" by a 501(c)(4) group. Currently, the IRS uses a "facts and circumstances" test to determine what spending constitutes campaign activity.
The IRS also said it would consider whether to revoke the regulation challenged in the lawsuit and adopt new regulations to limit how much campaign activity a social welfare organization is permitted to engage in under the tax laws, however campaign activity is defined.
If the IRS rulemaking fails to make clear that a 501(c)(4) group must engage exclusively in "social welfare" activities and thus may not engage in any campaign activity, or, at most, in any more than an insubstantial amount of campaign activity, the rules will not properly implement the statute.
Retaining the current understanding that groups can spend up to 49 percent of their annual expenditures on campaign activity would unlawfully license 501(c)(4) groups to continue to spend huge amounts on campaign activities without disclosure of the donors funding the expenditures.
The Internal Revenue Code did not envision that 501(c)(4) groups would engage in campaign activities. Groups that want the benefit of tax exemption for campaign activities should create organizations under section 527 of the tax laws, which provides tax-exempt status for groups engaging in campaign activities and requires such groups to disclose their campaign expenditures and the donors financing the spending.
Public Citizen is a nonprofit consumer advocacy organization that champions the public interest in the halls of power. We defend democracy, resist corporate power and work to ensure that government works for the people - not for big corporations. Founded in 1971, we now have 500,000 members and supporters throughout the country.
(202) 588-1000LATEST NEWS
Asked If He Must Uphold the US Constitution, Trump Says: 'I Don't Know'
"I'm not a lawyer," the president said in a newly aired interview.
May 04, 2025
U.S. President Donald Trump refused in an interview released Sunday to affirm that the nation's Constitution affords due process to citizens and noncitizens alike and that he, as president, must uphold that fundamental right.
"I don't know, I'm not a lawyer," Trump told NBC's Kristen Welker, who asked if the president agrees with U.S. Secretary of State Marco Rubio's statement that everyone on U.S. soil is entitled to due process.
When Welker pointed to the Fifth Amendment—which states that "no person shall be... deprived of life, liberty, or property, without due process of law"—Trump again replied that he's unsure and suggested granting due process to the undocumented immigrants he wants to deport would be too burdensome.
"We'd have to have a million or 2 million or 3 million trials," Trump said, echoing a sentiment that his vice president expressed last month.
Asked whether he needs to "uphold the Constitution of the United States as president," Trump replied, "I don't know."
Watch:
WELKER: The 5th Amendment says everyone deserves due process
TRUMP: It might say that, but if you're talking about that, then we'd have to have a million or two million or three million trials pic.twitter.com/FMZQ7O9mTP
— Aaron Rupar (@atrupar) May 4, 2025
Trump, who similarly deferred to "the lawyers" when asked recently about his refusal to bring home wrongly deported Maryland resident Kilmar Abrego Garcia, has unlawfully cited the Alien Enemies Act to swiftly remove undocumented immigrants from the U.S. without due process. Federal agents have also arrested and detained students, academics, and a current and former judge in recent weeks, heightening alarm over the administration's authoritarian tactics.
CNNreported Friday that the administration has "been examining whether it can label some suspected cartel and gang members inside the U.S. as 'enemy combatants' as a possible way to detain them more easily and limit their ability to challenge their imprisonment."
"Trump has expressed extreme frustration with federal courts halting many of those migrants' deportations, amid legal challenges questioning whether they were being afforded due process," the outlet added. "By labeling the migrants as enemy combatants, they would have fewer rights, the thinking goes."
Some top administration officials have publicly expressed disdain for the constitutional right to due process. Stephen Miller, the White House deputy chief of staff, wrote in a social media post last month that "the judicial process is for Americans" and "immediate deportation" is for undocumented immigrants.
The New Republic's Greg Sargent wrote in a column Saturday that "Miller appears to want Trump to have the power to declare undocumented immigrants to be terrorists and gang members by fiat; to have the power to absurdly decree them members of a hostile nation's invading army, again by fiat; and then to have quasi-unlimited power to remove them, unconstrained by any court."
"The more transparency we have gained into the rot of corruption and bad faith at the core of this whole saga, the worse it has come to look," Sargent continued. "Trump himself is exposing it all for what it truly is: the stuff of Mad Kings."
Keep ReadingShow Less
Republicans Set to Give Self-Described 'DOGE Person' Keys to Social Security Agency
"A vote for Trump's Social Security Commissioner is a vote to destroy Social Security," warned one advocacy group.
May 04, 2025
The U.S. Senate on Tuesday is set to hold a confirmation vote for President Donald Trump's pick to lead the Social Security Administration—an ultra-rich former Wall Street executive who has aligned himself with the Elon Musk-led slash-and-burn effort at agencies across the federal government.
"I am fundamentally a DOGE person," Frank Bisignano told CNBC in March, amplifying concerns that he would take his experience in the financial technology industry—where he was notorious for inflicting mass layoffs while raking in a huge compensation package—to SSA, which is already facing large-scale staffing cuts that threaten the delivery of benefits for millions of Americans.
In an email on Saturday, the progressive advocacy group Social Security Works warned that Bisignano "is not the cure to the DOGE-manufactured chaos at the Social Security Administration."
"In fact, he is part of it, and, if confirmed, would make it even worse," the group added. "We're not going down without a fight. Republicans may have a majority in the Senate, but we're going to rally to send a message: A vote for Trump's Social Security Commissioner is a vote to destroy Social Security!"
"If Mr. Bisignano can get away with lying before he's even in place as commissioner, who knows what else he'll be able to get away with once he's in office."
Bisignano, the CEO of payment processing giant Fiserv, has been accused during his confirmation process of lying under oath about his ties to DOGE, which has worked to seize control of Social Security data as part of a purported effort to root out "fraud" that advocates say is virtually nonexistent.
As The Washington Post reported in March, Bisignano testified to the Senate Finance Committee that "he has had no contact" with DOGE.
"But Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, said the claim is 'not true,' citing an account the senator said he received from a senior Social Security official who recently left the agency," the Post noted. "The former official... described 'numerous contacts Mr. Bisignano made with the agency since his nomination,' including 'frequent' conversations with senior executives."
Wyden pointed again to the former SSA official's statement in a floor speech Thursday in opposition to Bisignano, saying that "according to the whistleblower, Mr. Bisignano personally appointed his Wall Street buddy, Michael Russo, to be the leader of DOGE's team at Social Security."
The Oregon Democrat said Republicans on the Senate Finance Committee refused his request for a bipartisan meeting with the whistleblower to evaluate their accusations unless "we agreed to hand over any information received from the whistleblower directly to the nominee and the Trump administration."
"All Americans should be concerned that a nominee for a position of public trust like commissioner of Social Security is accused of lying about his actions at the agency and that efforts to bring this important information to light are being thwarted," Wyden said Thursday. "If Mr. Bisignano can get away with lying before he's even in place as commissioner, who knows what else he'll be able to get away with once he's in office."
"He could lie by denying any American who paid their Social Security taxes the benefits they've earned, claiming some phony pretense," the senator warned. "He could lie about how sensitive personal information is being mishandled—or worse, exploited for commercial use."
Keep ReadingShow Less
'Chilling Attempt to Normalize Fascism': Groups Decry Trump Official's Arrest Threats
"We must not allow intimidation and authoritarian tactics to take root in our political system."
May 04, 2025
A coalition of advocacy organizations on Saturday expressed support for Wisconsin Gov. Tony Evers and warned that the Trump border czar's threat against the Democratic leader marks a "dangerous escalation" of the administration's assault on the rule of law across the United States.
The groups—including All Voting Is Local and the ACLU of Wisconsin—said in a joint statement that Evers' guidance to state officials on how to handle being confronted by federal agents was "a prudent measure aimed at ensuring compliance with state and federal laws while protecting the rights of state employees."
The suggestion by Tom Homan, a leader of President Donald Trump's mass deportation campaign, that Evers could be arrested for issuing such guidance undermines "the foundational principles of our democracy, including the separation of powers, the rule of law, and the right of state governments to operate without undue federal interference," the groups said Saturday.
"To threaten our governor over his legal directive is gross overreach by our federal government, and it is not occurring in a vacuum," they continued, warning that the administration's rhetoric and actions represent a "chilling attempt to normalize fascism."
"Similar occurrences are happening across the nation, including within our academic systems," the groups added. "If we do not reject these actions now, states and other institutions will only lose more and more of their autonomy and power. This is exactly why we underscore Gov. Evers' claim that this event is 'chilling.'"
The threats against Gov. Evers in Wisconsin undermine the foundational principles of our democracy: the separation of powers, the rule of law, and the right of state governments to operate without undue federal interference. We must reject this overreach. allvotingislocal.org/statements/w...
[image or embed]
— All Voting is Local (@allvotingislocal.bsky.social) May 3, 2025 at 9:58 AM
Trump administration officials and the president himself have repeatedly threatened state and local officials as the White House rushes ahead with its lawless mass deportation campaign, which has ensnared tens of thousands of undocumented immigrants and at least over a dozen U.S. citizens—including children.
In an executive order signed late last month, Trump accused "some state and local officials" of engaging in a "lawless insurrection" against the federal government by refusing to cooperate with the administration's deportation efforts.
But as Temple University law professor Jennifer Lee recently noted, localities "can legally decide not to cooperate with federal immigration enforcement."
"Cities, like states, have constitutional protections against being forced to administer or enforce federal programs," Lee wrote. "The Trump administration cannot force any state or local official to assist in enforcing federal immigration law."
Administration officials have also leveled threats against members of Congress, with Homan suggesting earlier this year that he would refer Rep. Alexandria Ocasio-Cortez (D-N.Y.) to the U.S. Justice Department for holding a webinar informing constituents of their rights.
During a town hall on Friday, Ocasio-Cortez dared Homan to do so.
"To that I say: Come for me," she said to cheers from the audience. "We need to challenge them. So don't let them intimidate you."
Keep ReadingShow Less
Most Popular