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Opposition Grows to Bill Delaying IRS Rulemaking on Nonprofits
IRS Rulemaking to Clearly Define Political Activity Must Move Forward, Public Citizen Says
WASHINGTON
Public Citizen's Bright Lines Project is urging House Ways and Means Committee members to oppose a bill that would delay new IRS rules for 501(c)(4) organizations.
The Bright Lines Project has been working for years to create clear, fair rules that would apply to all nonprofits and would encourage nonpartisan civic engagement while removing opportunities for abuse. The IRS' new rules seek to resolve the ambiguity of the current "facts and circumstances" test that allowed 501(c)(4)s, so-called "social welfare" groups, to spend millions of dollars on elections in 2012 without disclosing their donors.
But House Resolution 3865, sponsored by U.S. Rep. Dave Camp (R-Mich.), would prevent the IRS from finalizing the rules for one year.
"The IRS has rightfully moved to correct a standard that has been confusing nonprofits for decades, and we applaud it for taking the initiative to do so," said Lisa Gilbert, director of Public Citizen's Congress Watch division, which oversees the Bright Lines Project. "Changes in the proposed rules are necessary, but hindering the process will only exacerbate the uncertainty that nonprofit organizations on both sides of the aisle feel concerning the current vague rules."
Added Craig Holman, government affairs lobbyist for Public Citizen's Congress Watch division, "There is no justification for delaying the rulemaking. Doing so will only increase the opportunities for hundreds of millions of dollars of undisclosed 'dark money' to flow into federal elections due to abuses of the tax code."
Also today, Public Citizen and other reform groups describe the need for new regulations governing 501(c)(4)s in a letter (PDF) and are calling upon the committee not to hinder the rulemaking.
The comment period for the IRS' new proposed rulemaking closes on Feb. 27.
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.
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'No Question That It's Illegal': Watchdogs Pan DeSantis Super PAC Scheme
"The FEC should investigate and act as appropriate," said one ethics expert.
May 24, 2023
When Florida Gov. Ron DeSantis formally enters the 2024 presidential race on Wednesday, he will have the support of a super PAC that expects to be flush with at least $200 million in cash and ready to spend big.
But a sizable portion of that war chest—around $86 million of it—is facing scrutiny from campaign finance watchdogs given its origins: a Florida political committee named Friends of Ron DeSantis.
In an apparent attempt to evade campaign finance rules barring candidates from using funds raised for a state election to finance a federal campaign, DeSantis' allies reportedly plan to transfer the nearly $90 million from the Florida committee to Never Back Down, a pro-DeSantis super PAC that is free to raise and spend unlimited sums as long as it does not coordinate directly with any candidate.
The ability of Never Back Down to remain entirely independent has been called into doubt given that the organization is led by some of DeSantis' closest friends, including former Nevada Attorney General Adam Laxalt.
Erin Chlopak, senior director for campaign finance at Campaign Legal Center (CLC), told OpenSecrets on Wednesday that "there's no question that it's illegal for a federal candidate to transfer money they raised for a state committee to a federal super PAC."
"Although super PACs are permitted to raise and spend unlimited amounts of money, an essential, fundamental legal requirement is that they operate independently," said Chlopak. "That independence is nonexistent when a super PAC receives tens of millions of dollars from a state committee tied to the very candidate it is supporting."
Chlopak argued that the transfer of funds from Friends of Ron DeSantis to Never Back Down "would enable the candidate to completely circumvent the rules Congress enacted to prevent corruption and ensure our federal election campaigns are transparent."
CLC has said it will file a complaint with the Federal Election Commission (FEC)—which is evenly split between Republicans and Democrats—if the money transfer takes place as expected.
Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington (CREW), wrote on Twitter earlier this month that "the moves that Ron DeSantis appears poised to make—transferring funds from his state political committee to a federal super PAC—would likely violate campaign finance laws.
"If he does take this step," Bookbinder wrote, "the FEC should investigate and act as appropriate."
\u201cThe moves that Ron DeSantis appears poised to make--transferring funds from his state political committee to a federal super PAC--would likely violate campaign finance laws. If he does take this step, the FEC should investigate and act as appropriate.\nhttps://t.co/AFXaO7ORr0\u201d— Noah Bookbinder (@Noah Bookbinder) 1683898201
DeSantis, who has spent the past few months flying around the U.S. in private jets on the dime of secret donors, insists he is no longer associated with Friends of Ron DeSantis.
Earlier this month, as he prepared to officially launch his presidential campaign, the Republican governor submitted a notice to the state of Florida indicating that he is "no longer associated with the political committee."
But observers were quick to voice skepticism.
"The idea that Ron DeSantis is no longer controlling or associated with 'Friends of Ron DeSantis' is absurd," journalist Judd Legum recently wrote in his newsletter Popular Information. "And the notion that the money held by Friends of Ron DeSantis will decide to transfer its funds to Never Back Down independent of DeSantis is not credible."
Politicoreported that after DeSantis filed his notice with the state, the website of Friends of Ron DeSantis was "changed to say that the committee is associated with state Sen. Blaise Ingoglia and not DeSantis."
"The committee... also filed paperwork that said Ingoglia replaced a Tampa accountant as the official chair of the organization," Politico added. "Ingoglia is a Republican ally of DeSantis who sponsored several of the governor's key legislative priorities during the recently concluded legislative session."
"The failure to enforce the law has carved a clear path for others to follow, and it seems like DeSantis knows it."
Saurav Ghosh, CLC's director of federal campaign finance reform, noted in response to the Politicostory that "it has been illegal for over 20 years to use 'soft money'—including money raised by a state PAC under state law—to run for federal office." (Soft money is defined as funds raised outside the constraints of federal campaign finance law.)
"Unfortunately, the FEC has failed to hold candidates accountable for doing exactly what the law prohibits: moving soft money in state committees to federal super PACs backing their candidacy," Ghosh wrote on Twitter. "We filed complaints against [Republican Reps.] Byron Donalds and Debbie Lesko, but the FEC did nothing."
"The failure to enforce the law has carved a clear path for others to follow, and it seems like DeSantis knows it," Ghosh added. "He's distancing himself from 'Friends of Ron DeSantis' the same way Byron Donalds did before transferring soft money to an allied super PAC. If DeSantis does break the law, he won't be alone."
DeSantis' main opponent for the Republican nomination will be former President Donald Trump, who is widely viewed as the GOP frontrunner.
A day before Trump formally launched his 2024 bid late last year, CLC filed a complaint with the FEC alleging that the former president illegally transferred $20 million from his leadership PAC Save America to the pro-Trump super PAC Make America Great Again, Inc.
Last week, CLC and the advocacy group NRDC Action Votes filed a supplemental complaint alleging that Trump and Save America "unlawfully transferred an additional $40 million to MAGA, Inc. on November 3, 2022, raising the total amount in violation to $60 million."
"When federal candidates themselves sidestep laws designed to reduce political corruption and provide transparency about who is spending on elections, they undermine our election system and damage voter trust," CLC's Chlopak said in a statement. "That 'soft money' injection into a federal election was a violation of federal law, and he must be held accountable."
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Bernie Sanders to Joe Biden: Invoke the 14th Amendment—Now
Doing so, argues the U.S. senator, will allow the country "to pay its bills on time and without delay, prevent an economic catastrophe, and prevent huge cuts to healthcare, education, childcare, affordable housing, nutrition assistance, and the needs of our veterans."
May 24, 2023
Just over a week away from U.S. House Republicans potentially forcing an economically devastating default by refusing to raise the debt ceiling, Sen. Bernie Sandersadvised for President Joe Biden to take urgent unilateral action by invoking the 14th Amendment.
"The willingness of Republicans to hold the world's economy hostage to their Draconian and cruel demands has made it extremely difficult to enact a bipartisan budget deal at this time," Sanders (I-Vt.) wrote in a Fox News op-ed. "So where do we go from here?"
"In my view, there is only one option," he argued, explaining that Biden "has the authority and the responsibility" to prevent a default under the 14th Amendment to the U.S. Constitution, which says in part that "the validity of the public debt of the United States... shall not be questioned."
"This is a constitutional guarantee that the U.S. will always pay all its debts, period," Sanders said, adding:
This is not a radical idea. Making sure that the United States continues to pay its bills regardless of whether the statutory increase in the debt ceiling is raised or not is an idea that has been supported by Republicans and Democrats.
Back in 2016, then-President Donald Trump was correct when he said: "This is the United States government. First of all, you never have to default because you print the money."
Using the 14th Amendment would allow the United States to continue to pay its bills on time and without delay, prevent an economic catastrophe, and prevent huge cuts to healthcare, education, childcare, affordable housing, nutrition assistance, and the needs of our veterans.
It must be exercised.
Americans are already living with "unprecedented wealth and income inequality," corporations raking in huge profits from jacking up prices, and the world's highest prescription drug costs, Sanders noted. Meanwhile, GOP lawmakers are plotting more tax cuts for the rich and demanding additional military spending—despite the hundreds of billions of dollars the U.S. already pours into the Pentagon and recent revelations about private military contractors' price gouging.
"The hypocrisy of Republicans in Washington is truly breathtaking," the senator charged, emphasizing that the GOP's proposed tax breaks for the wealthy and boosted military spending would collectively increase the deficit they claim to care about by trillions of dollars.
\u201cBiden must resist Republican debt ceiling demands. Here\u2019s what he needs to do instead\n\nUS economy out of touch with lives of most Americans. Biden must resist GOP debt plan that would make things worse\n\nBy Sen. Bernie Sanders \n\nhttps://t.co/cuAIfQgV4m\u201d— OurRev305 (@OurRev305) 1684943573
"While defaulting on our nation's debt would be a disaster so would enacting the budget Republicans passed in the House in April," Sanders asserted. In the op-ed, he also detailed some estimated impacts from cuts to nonmilitary discretionary spending in the GOP's so-called Limit, Save, Grow Act:
- Deep and sweeping budget cuts... would push 790,000 Americans out of their jobs and push our economy toward a recession.
- Up to 21 million Americans could lose Medicaid, ripping away the healthcare they need.
- 80,000 jobs would be cut at the Department of Veterans Affairs alone and millions of veterans would be forced to wait much longer for the care and benefits they need.
- 1.2 million women, infants, and children would not receive the nutrition they need to stay healthy through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program.
- Nutrition services, such as Meals on Wheels, would be cut for more than 1 million low-income seniors.
- 640,000 families would lose access to rental assistance and more than 430,000 low-income families would be evicted from their homes.
- 200,000 children would be thrown off Head Start and 180,000 kids would lose access to childcare.
- 2 million Americans would lose access to healthcare services through community health centers.
Sanders is among a growing number of progressive lawmakers and legal scholars who have urged Biden to reject the GOP's push for "massive cuts on the needs of working people, the elderly, the children, the sick, and the poor," and pointed to the 14th Amendment.
The head of the American Federation of Government Employees joined in Tuesday with a letter to the White House—which came as U.S. District Judge Richard Stearns held a conference for a case involving the 14th Amendment that the National Association of Government Employees filed earlier this month against Biden and Treasury Secretary Janet Yellen.
Stearns, an appointee of former President Bill Clinton, ordered the U.S. Department of Justice to file a document that lays out the DOJ's views of Biden's authority relating to the public debt by May 30 and scheduled a hearing for May 31, the eve of the so-called X-date, or when Yellen warns the government could run out of money to pay its bills.
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New Research Exposes Chevron's Carbon Offsets as Worthless 'Junk'
"Chevron's 'net zero' rhetoric looks to be little more than a PR ploy to prevent strong climate action while the corporation rakes in record profits and plans for further production or expansion in at least 20 countries."
May 24, 2023
Research published Wednesday reveals that nearly all of the carbon offsets Chevron relies on to "cancel out" its planet-heating emissions are likely "worthless," rendering the oil giant's so-called "net zero aspiration" a masterclass in greenwashing that threatens to exacerbate the fossil fuel-driven climate crisis.
According to a new report from Corporate Accountability, at least 93% of the voluntary carbon market offsets Chevron purchased and counted toward its climate targets between 2020 and 2022 are "of low environmental integrity and therefore appear to be junk, until or unless proven otherwise." To make matters worse, at least 42% of the purportedly green initiatives the company invested in and gave itself credit for over the past three years are linked to claims of ecological and social harm, particularly in the Global South.
"This is how we lose a planet: through corporate dishonesty and obstruction."
Over half of Chevron's offset credits from 2020-2022 (including over 97% in 2022) were based on large hydroelectric projects, but these are "meaningless" from a carbon accounting standpoint because they don't deliver additional reductions in greenhouse gas (GHG) pollution, the report notes.
The authors cite a preexisting explanation from the GHG Management Institute and Stockholm Environmental Institute: "GHG emissions reductions are additional if they would not have occurred in the absence of a market for offset credits. If the reductions would have happened anyway—i.e., without any prospect for project owners to sell carbon offset credits—then they are not additional… if their associated GHG reductions are not additional, then purchasing offset credits in lieu of reducing your own emissions will make climate change worse."
Mega-dams also tend to be associated with myriad downsides, including widespread displacement and violent repression. Two projects in Colombia that account for a combined 37% of Chevron's recent offsets—Proyecto Hidroeléctrico El Quimbo and the Sogamoso Hydropower Project—have been accused of inflicting substantial damage on local ecosystems and communities, with the latter under fire for allegedly threatening, disappearing, and even killing opponents.
One-third of Chevron's offset credits over the past three years came from Reducing Emissions From Deforestation and Forest Degradation in Developing Countries, or REDD+, projects. The vast majority were purchased through Verra, the world's largest carbon credit certifier; a recent analysis found that 94% of the rainforest offsets sold by Verra have no discernible climate benefits, contributing to its CEO's Tuesday decision to resign. In addition to largely failing to reduce deforestation—resulting in dubious emissions reduction effects—REDD+ projects "are also notorious for their negative impacts on Indigenous peoples and local communities worldwide due to risks of land grabbing and loss of land tenure rights," the new investigation points out.
Chevron's recent offsets also include several ostensible reforestation projects, but according to the report, two of them are large rubber plantation monocultures for latex extraction and another is based on pine and eucalyptus plantations destined to be harvested before 2040.
"Large plantations such as these, unlike natural or even secondary forests (e.g., those that are replanted and left to grow naturally), require sterile habitats, frequent harvesting, and sometimes clearing, which releases stored carbon back into the atmosphere," the report notes. "These plantations can actually create cumulatively worsening conditions for local ecosystems and biodiversity and are not effective carbon-offsetting strategies."
"In addition to junk offsets, Chevron also promotes its investment in CCUS [Carbon Capture Utilization and Storage] as central to achieving its 'net zero' target," the report observes. "By its own admission, Chevron's CCUS projects are failing to achieve even close to the amount of emissions removals promised, in some cases even failing to meet the targets by 50%."
\u201cBREAKING: Chevron is consistently ranked as one of the worst #BigPolluters to repeatedly obstruct climate policy.\n\nBut just how deeply misaligned is the corporation when it comes to upholding its climate commitments?\n\n\u2b07\ufe0f Our latest on #ChevronsJunkAgenda.\nhttps://t.co/IVMA0M3cxp\u201d— Corporate Accountability (@Corporate Accountability) 1684917060
Notably, even if Chevron were to hit its current climate targets, it would still ignore 90% of its overall emissions. That's because the oil giant's goal of achieving "net zero" GHG pollution by 2050 only applies to upstream ("scope 1" and "scope 2") emissions—the 10% that correspond with production and the operation of company-owned property. The vast majority of Chevron's emissions are downstream ("scope 3"), or those that stem from the end use of its petroleum products.
Rachel Rose Jackson, director of climate research and policy at Corporate Accountability, said in a statement that "Chevron's 'net zero' rhetoric looks to be little more than a PR ploy to prevent strong climate action while the corporation rakes in record profits and plans for further production or expansion in at least 20 countries."
Chevron, the second-biggest U.S. oil major behind ExxonMobil, raked in a record $35.5 billion in profit in 2022 and announced a $75 billion stock buyback plan for this year. In addition, the company—responsible for generating more than 43 billion tons of GHG pollution since 1965, second only to Saudi Aramco among corporations worldwide—is planning to dump $57.4 billion into ramping up fossil fuel production this decade, the report laments.
Chevron's investment plans, second only to Exxon's, are at odds with climate scientists' repeated warnings that fossil fuel expansion is incompatible with preserving a habitable planet.
"This deeply documented history of greenwashing and malfeasance should make every human on Earth who isn't paid by the fossil fuel industry furious."
Corporate Accountability's new exposé "supports what we have long suspected to be true beneath its 'green image,'" said Jackson. "Chevron is deploying junk offsets that are presumed worthless, and many of which are likely to be spurring harm on frontline communities. In addition, its vast lobbying is a hindrance to the strong climate action we urgently need."
According to Corporate Accountability: "Last year, Chevron lobbied on more than 150 federal bills or issues in the U.S.—targeting policies that sought to lower emissions while pushing others that would further legitimize risky and unproven schemes like CCUS. In 2020-2022, Chevron directly spent $20.8 million lobbying in the U.S. alone. This does not even take into account the more than $310.5 million its partner trade groups spent in the same time period."
In response to the report, climate scientist Peter Kalmus toldThe Guardian that "this is how we lose a planet: through corporate dishonesty and obstruction."
"This deeply documented history of greenwashing and malfeasance should make every human on Earth who isn't paid by the fossil fuel industry furious," Kalmus added.
The report comes just days after communities harmed by Chevron's operations held the 10th annual #AntiChevronDay of action on Sunday. Demonstrations took place in 10 countries, including a protest outside a massive oil refinery in Richmond, California, where the company is headquartered. It also comes one week before the company's annual shareholder meeting on May 31.
"It's imperative that shareholders, policymakers, and the public see Chevron's green claims for what they are—greenwashed destruction," says Corporate Accountability. "As this exposé illustrates, Chevron appears to be continuing its legacy of preventing, not promoting, the legally binding regulations, the rapid deployment of real solutions, and the fast track to real zero emissions that needs to happen to avert climate catastrophe."
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