Which is not to say we are
anywhere near certain at this point in time that Obama did anything worse than
improper oversight. But as I have said,
if Obama is involved, impeach him. If he
is not involved, “impeach” the IRS (that is abolish it or so limit it so that it
can never do this sort of thing again).
Martin Bashir of course has gone
to the tried and true claim of raaaacism:
But the good news there is
probably not even Bashir takes that seriously.
What is more disturbing is how Lawrence O’Donnell managed to convince
members of Congress that his defense is correct. Here, let me present it, and then let me tear
it apart:
If you have trouble seeing it,
here’s a link. Nbc news can be wonky about this sort of
thing.
So… oh my God! Clearly the law in question is not being
followed! The IRS had been letting
political organizations get away with murder since 1959! How can they get the law so wrong?
Except they aren’t. How do we know? Because the Supreme Court says so,
unanimously. But let me take a moment to
explain.
First, let’s get very basic. The rule is that corporations ordinarily have
to pay taxes. But certain non-profit
corporations do not have to, if they fit into the various statutes, rules and
regulations required in the law. The
statute setting up many of these charities is 26 U.S.C. §501, and
you most often hear of §501(c)(3)’s and less often of §501(c)(4). But there are many other categories of tax
free non-profits.
The issue is primarily about
(c)(4) organizations, so let’s look at the (relevant) statutory language. It says that one of the categories of
non-profits exempt from taxation are:
Civic leagues or
organizations not organized for profit but operated exclusively for the
promotion of social welfare...
There’s more about a wholly
different category of exempt organizations but that isn’t relevant here, but
that is the key language.
Now first, let’s ask a simple
question. What is “social welfare?” How is that term defined? Often the trick in law isn’t to know
everything, but to recognize what you don’t know and examine that.
Well, with law it never hurts to
start with a little common sense. Let’s imagine
that we saw the formation of an organization devoted to stopping child
rape. Call it the Jessica Barton House . Okay that seems to be off to a good start in
terms of being a social welfare organization, right? Say they build shelters for children who are
the victim of rape. That seems obviously
a matter of social welfare right?
Okay, how about ads on
television, encouraging victims to reach out to them or law enforcement,
encouraging adults who see signs of abuse to report it and so on. That still seems pretty obviously a matter of
social welfare, right? That sounds like
really good work.
Okay, and say they decide that in
certain states they need tougher laws on the subject. For instance, they might feel the age of
consent in a certain state is too low.
Or they might feel that the federal laws pertaining to the kidnapping
and rape of children isn’t harsh enough.
So they send some people to congress to advocate for such laws.
Isn’t that still promoting the
social welfare? I think it obviously is.
Let’s take another example. The Sierra Club. And notice, I am saying the Sierra Club and
not the Sierra Club Foundation. They are
closely affiliated, but the Sierra Club is a §501(c)(4) and the Sierra Club
Foundation is a §501(c)(3). Now I have
deep disagreements with these hippy tree huggers (I kid!), but that doesn’t stop me from generally crediting that
they are good people trying to make America and indeed the world better. And some of that is probably like drum
circles or some hippy crap. And some of
it is promoting their agenda in the political sphere. Here’s how they describe some of the Sierra
Club’s activities:
In 2013, the Sierra
Club will promote leaders who take bold action on climate and clean energy, and
expose those who still choose toxic money over human health. Building on the
credibility developed through our 2012 political work, we will support
candidates and policies that:
* work to replace
dirty, unhealthy coal plants with cleaner, safer wind and solar energy;
* fight to protect
drinking water from fracking; and
* defend wildlands
and wildlife from expanded oil and gas development.
That comes from here,
and seriously you need to read the whole thing.
It starts with a quote from Obama and includes this map of the gubernatorial races in 2014:
I guess gray indicates states
where there is no race. They don’t go
out and say, “vote Democrat” but they are creeping up to the line.
And while I don’t agree with
their agenda, that is the promotion of social welfare. They are trying to make America a better place. However misguided, they have been doing it for years.
So we establish by simple logic
an obvious principle: political activity is one of the ways a group can promote
social welfare.
And what do these Tea Party
groups stand for? Well, the two most common
threads among the Tea Partiers is they want to reduce the debt and reduce
taxes. They also seem to skew kind of
libertarian on most other policies, but those are the two issues they unite on:
smaller debt, smaller taxes. And you
might not like those goals, but they think this is what is best for America—or more
precisely they think going past $17 Trillion in debt is profoundly bad for
America—and so likewise that is social welfare.
See that is where O’Donnell is
going the most wrong in his analysis. He
thinks the issue is the term "exclusivity." But no,
the issue is the definition of “social welfare.” And some political activity can be social
welfare.
That’s not just my opinion. It is also the opinion of the IRS. Here’s what their regulations, specifically 26 C.F.R. §1.501(c)(4)-1(a)(2),
says on the subject:
(2) Promotion of social welfare— (i) In general. An organization is
operated exclusively for the promotion of social welfare if it is primarily
engaged in promoting in some way the common good and general welfare of the
people of the community. An organization embraced within this section is one
which is operated primarily for the purpose of bringing about civic betterments
and social improvements. A social welfare organization will qualify for
exemption as a charitable organization if it falls within the definition of
charitable set forth in paragraph (d)(2) of § 1.501(c)(3)-1 and is not an
action organization as set forth in paragraph (c)(3) of § 1.501(c)(3)-1.
(ii) Political or social activities. The promotion of social
welfare does not include direct or indirect participation or intervention in
political campaigns on behalf of or in opposition to any candidate for public
office. Nor is an organization operated primarily for the promotion of social
welfare if its primary activity is operating a social club for the benefit,
pleasure, or recreation of its members, or is carrying on a business with the
general public in a manner similar to organizations which are operated for
profit. See, however, section 501(c)(6) and § 1.501(c)(6)-1, relating to business
leagues and similar organizations. A social welfare organization that is not,
at any time after October 4, 1976, exempt from taxation as an organization
described in section 501(c)(3) may qualify under section 501(c)(4) even though
it is an action organization described in § 1.501(c)(3)-1(c)(3)(ii) or (iv), if
it otherwise qualifies under this section. For rules relating to an
organization that is, after October 4, 1976, exempt from taxation as an
organization described in section 501(c)(3), see section 504 and § 1.504-1.
Now in all that mess, you can
pull out several indicators of the definition of “social welfare.” First, that it is “engaged in promoting in
some way the common good and general welfare of the people of the community” or
it is “operated primarily for the purpose of bringing about civic betterments
and social improvements.” There is
reference to the categories enumerated in 26 C.F.R. §1.501(c)(3)-1(d)(2) but
those examples are not exhaustive and are not treated as such.
And then it says one more thing
that is very, very important:
The promotion of
social welfare does not include direct or indirect participation or
intervention in political campaigns on behalf of or in opposition to any
candidate for public office.
So advocating for a specific candidate is not social welfare. So by implication, everything else you can
call “political activity” is. That might
not seem obvious to lay persons, but we are talking the language of law and one
of the more important rules in interpreting the language of law is the
principle of expressio unius.
I explain the concept here
(minor language warning) in which I point out the foibles of another MSNBC host,
but the short version is that by saying this is not included, they implied that
everything else is.
As for O’Donnell’s primary v.
exclusive thing... in all bluntness, “exclusively” cannot be “absolutely exclusive.” It’s not workable. For instance, if the Sierra Club sells a
T-shirt, is that serving the general good?
Arguably not. Likewise, if Jann
in accounting has a birthday and they throw her a party, is that serving the
general good? It would seem to be
serving Jann’s good, truly. This is one
of the cases where Congress wrote a law that I think if taken too far is just
unworkable. So the IRS, at worst, gave a
narrowing interpretation of the term to give such charities some reasonable
breathing room to go a little off mission as long as they were primarily
concerned with their charitable mission.
And while the Supreme Court has
not gone into great deal discussing the matter, the Supreme Court has agreed with
the IRS’ interpretation that §501(c)(4) corporations can engage in some
political activity. In Regan
v. Taxation with Representation of Washington 461 U.S. 540 (1983), the
Court was faced with a §501(c)(3) that wished to engaged in more political
speech than they were allowed back then.
The Supreme Court said they couldn’t, and pointed out that they could do
so under §501(c)(4) as follows:
TWR [Taxation with
Representation] was formed to take over the operations of two other nonprofit
corporations. One, Taxation With Representation Fund, was organized to promote
TWR's goals by publishing a journal and engaging in litigation; it had
tax-exempt status under § 501(c)(3). The other, Taxation With Representation,
attempted to promote the same goals by influencing legislation; it had tax-exempt
status under § 501(c)(4).[4] For purposes of our analysis, there are
two principal differences between § 501(c)(3) organizations and § 501(c)(4)
organizations. Taxpayers who contribute to § 501(c)(3) organizations are
permitted by § 170(c)(2) to deduct the amount of their contributions on their
federal income tax returns, while contributions to § 501(c)(4) organizations
are not deductible. Section 501(c)(4) organizations, but not § 501(c)(3)
organizations, are permitted to engage in substantial lobbying to advance their
exempt purposes.
So in short TWR was once two organizations,
a §501(c)(3) and a §501(c)(4) devoted to lobbying for some cause or
another. And please note that the Supreme
Court basically agrees with the IRS on this.
And this was a unanimous decision.
Oh, but there was a concurrence
by Blackmun, which was joined by the uber-liberal Brennan and Marshall. I am sure they took the majority to the
woodshed on this point, right? Right?
Well, no. Quite the opposite, in fact. From his opinion:
I write separately
to make clear that in my view the result under the First Amendment depends
entirely upon the Court's necessary assumption — which I share — about the
manner in which the Internal Revenue Service administers § 501.
If viewed in
isolation, the lobbying restriction contained in § 501(c)(3) violates the
principle, reaffirmed today, ante, at 545, "that the government may not
deny a benefit to a person because he exercises a constitutional right."
Section 501(c)(3) does not merely deny a subsidy for lobbying activities, see
Cammarano v. United States, 358 U. S. 498 (1959); it deprives an otherwise
eligible organization of its tax-exempt status and its eligibility to receive
tax-deductible contributions for all its activities, whenever one of those
activities is "substantial lobbying." Because lobbying is protected
by the First Amendment, Eastern Railroad Presidents Conf. v. Noerr Motor
Freight, Inc., 365 U. S. 127, 137-138 (1961), § 501(c)(3) therefore denies a
significant benefit to organizations choosing to exercise their constitutional
rights.[*]
The constitutional
defect that would inhere in § 501(c)(3) alone is avoided by § 501(c)(4). As the
Court notes, ante, at 544, TWR may use its present § 501(c)(3) organization for
its nonlobbying activities and may create a § 501(c)(4) affiliate to pursue its
charitable goals through lobbying.
So in other words, according to these
three judicial musketeers, §501(c)(3) would be unconstitutional if was not for
the ability to create § 501(c)(4) which can lobby. This was vitally important to Blackmun, stating
that
A § 501(c)(3)
organization's right to speak is not infringed, because it is free to make
known its views on legislation through its § 501(c)(4) affiliate without losing
tax benefits for its nonlobbying activities.
In other words, if there is a proposal
to bulldoze Yosemite National Park and put up a megamall, the Sierra Club
foundation, a §501(c)(3), has a right
to let its opinion about such a thing be known.
And the way it lets its opinions be known is through the Sierra Club,
which is a §501(c)(4). Blackmun even goes as far as to say that if
the IRS should ever forbid the §501(c)(3) from exercising a great deal of
control over a §501(c)(4) that it would violate the §501(c)(3)’s freedom of
speech. Indeed the concurrence correctly
points out that “the Court finds that Congress’ purpose in imposing the
lobbying restriction [on §501(c)(3)’s] was merely to ensure that "no
tax-deductible contributions are used to pay for substantial lobbying.’”
Now let’s say that you read all
of that, and say, “I don’t care for your lawyerly analysis, Aaron, and I don’t
care that nine Supreme Court justices agreed with your analysis. The Supreme Court was wrong, the IRS is wrong,
you are wrong, and we should read the statute from now on prohibiting any
political activity by §501(c)(4). You jerk.”
Well, that last part was uncalled
for, but I will let it slide. But here’s
the thing. Even if you convince the Supreme
Court they were wrong in the Regan decision in 1983, they will say, “even if our
interpretation was wrong back then, we will continue to follow it.” You see the courts are uniquely unwilling to
overturn erroneous statutory interpretations.
Let me illustrate with an example.
In 1979, the Supreme Court heard the
case of United
Steelworkers v. Weber. In that
case, the Supreme Court was confronted with a Union that had instituted an
affirmative action program, basically screwing young white workers to make up
for the discrimination practiced in favor of old white workers. Those young white workers felt it was unfair
for them to be out of a job because of the sins of the past and sued, claiming
this violated Title VII of the Civil Rights Act of 1964. The Supreme Court held, 5-2 (two justices sat
out for one reason or another), that bona fide affirmative action plans did not
violate this statute.
Then eight years later, in Johnson
v. Transportation Agency, the court looked at the issue of affirmative
action, again. This time it was
affirmative action by gender in construction work. They were asked in that case to overturn Weber, but refused. In doing so they borrowed an idea from one of
my professors: the idea that there is a kind of dialogue between the
legislature and the courts in the interpretation of statutes.
As one scholar has
put it, "When a court says to a legislature: `You (or your predecessor)
meant X,' it almost invites the legislature to answer: `We did not.' " G.
Calabresi, A Common Law for the Age of Statutes 31-32 (1982). Any belief in the
notion of a dialogue between the judiciary and the legislature must acknowledge
that on occasion an invitation declined is as significant as one accepted.
So the attitude the court took
was that if they had gotten it wrong the first time, then Congress would have
corrected them and the fact that Congress didn’t do so meant that at least the
present Congress was fine with that interpretation.
So as O’Donnell noted, this
interpretation had been on the books for decades, and yet the law hadn’t been
changed by Congress in order to rebut this interpretation. By comparison when the ADA was passed, the
courts gave increasingly narrowing interpretations of the law until finally
they said that disabilities would be measured using any “mitigating measures”
creating a requirement out of thin air.
And then Congress acted and passed amendments to the ADA explicitly
reversing those decisions and pretty forcefully rebuking the Supreme Court.
Or in another instance, when the
Obama administration came into office they quickly announced a radical
interpretation of identity theft legislation that would force every doctor’s
office and every lawyer’s office to institute an expensive identity theft protection
program. And the howling from the ABA
and the AMA led to Congress
passing a law limiting this new interpretation.
So over fifty years of
legislative silence on the topic means that the Supreme Court is likely to
interpret this as acquiescence, and therefore decide that even if miraculously all
nine justices on the Supreme Court got it wrong in the Regan decision, they would not overturn that precedent.
Which means in turn if the IRS
suddenly decided to stop the §501(c)(4)’s from engaging in lobbying, they would
have a large number of suits and the Supreme Court would be likely to overturn
that change.
No, if these Congresspersons want
to change the rule now, they need to propose and pass a law the rebukes this
approach.
And even then they face a real
danger of such a law being struck down as unconstitutional. While only three justices made this point,
not a single justice disagreed with them.
Which means that in the eyes of the court, this is an open question. And let’s not forget that all five justices that
ruled in favor of free speech in Citizens
United are still on the bench today.
And that is assuming that the §501(c)(4)s don’t make enough of a ruckus
to stop such legislation before it is passed.
If the Sierra Club told those Congressmen that they had to be free to
speak, I suspect they would take that seriously.
What this is, instead, is the sad
story of a man playing lawyer without consulting any actual, you know,
lawyers. Yes, O’Donnell has some
experience working in Congress, and he might have even thought that he knows a
lot about law, but there are things we learn in law school that you don’t get
anywhere else.
(Well, besides my blog, I mean.)
I don’t’ say this to be snotty. The very fact I am taking the time to explain
this to you is because the law should not be something this impenetrable to
regular folks. Scalia once promoted the
idea that a regular person should be able to open a statute book and have a
reasonable chance of figuring out what the law requires of you. The fact most people can’t but I can, doesn’t
make me better than you. It just means I
was told the secret code.
But it should not be secret and
explaining these things is my way of trying to work against this “secret code”
aspect of the law. Bit by bit, I will
give you the cypher.
After all, as I often say at this
site, this discussion of the law is not in order to give you legal advice. It is partly to point out that Lawrence O’Donnell,
in his insufferable smugness, is in fact clueless and thus enjoy a little
schadenfreude at his expense. But the
more noble purpose is to help you, dear reader, understand the law because as
citizens of this republic you have a right to shape the law and you cannot
shape the law intelligently without understanding it. Now you understand it, you might decide that
the law stinks and you want to change it and that is your right as a
citizen. Or you might decide on balance it
is good. But the most important thing is
that you decide and you do so with a full understanding of the law.
---------------------------------------
My wife and I have lost our jobs
due to the harassment of convicted terrorist Brett Kimberlin, including an
attempt to get us killed and to frame me for a crime carrying a sentence of up
to ten years. I know that claim sounds fantastic,
but if you read starting here, you will see absolute proof of these
claims using documentary and video evidence.
If you would like to help in the fight to hold Mr. Kimberlin
accountable, please hit the Blogger’s Defense Team button on the right. And thank you.
Follow me at Twitter @aaronworthing,
mostly for snark and site updates. And
you can purchase my book (or borrow it for free if you have Amazon Prime), Archangel: A Novel of Alternate, Recent
History here.
And you can read a little more about my novel, here.
---------------------------------------
Disclaimer:
I have accused some people,
particularly Brett Kimberlin, of
reprehensible conduct. In some cases, the conduct is even
criminal. In all cases, the only justice I want is through the appropriate
legal process—such as the criminal justice system. I do not want to see vigilante violence
against any person or any threat of such violence. This kind of conduct is not only morally
wrong, but it is counter-productive.
In the particular case of Brett
Kimberlin, I do not want you to even contact him. Do not call him. Do not write him a letter. Do not write him an email. Do not text-message him. Do not engage in any kind of directed
communication. I say this in part
because under Maryland law, that can quickly become harassment and I don’t want
that to happen to him.
And for that matter, don’t go on
his property. Don’t sneak around and try
to photograph him. Frankly try not to
even be within his field of vision. Your
behavior could quickly cross the line into harassment in that way too (not to
mention trespass and other concerns).
And do not contact his
organizations, either. And most of all, leave his family alone.
The only exception to all that is
that if you are reporting on this, there is of course nothing wrong with
contacting him for things like his official response to any stories you might
report. And even then if he tells you to
stop contacting him, obey that request. That
this is a key element in making out a harassment claim under Maryland law—that
a person asks you to stop and you refuse.
And let me say something
else. In my heart of hearts, I don’t
believe that any person supporting me has done any of the above. But if any of you have, stop it, and if you
haven’t don’t start.
Very interesting post. This has helped me understand a Supreme Court decision that affects my field. Thank you.
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