So there are two scandals here, and all Americans should be concerned about them both. But there is a third scandal unearthed by last week’s events, and it comes under the familiar dictum, often attributed to fellow columnist Michael Kinsley, that scandal usually isn’t about what’s illegal, but what is legal.
Here is what is legal and at the heart of this month’s contretemps: It is legal for 501(c)(4) organizations — conservative groups, such as the various permutations of the tea party, as well as many liberal groups, such as Priorities USA — to have tax exemptions under the claim that they are primarily involved in the promotion of social welfare. The promotion of social welfare is an elusive concept often having little to do with social welfare and often having to do with politics. Its virtue is almost always in the eyes of the beholder, if not the donor.
This is not a new issue in Washington. More than nine months ago, 10 Republican senators, including some regarded by Democrats as among the most open-minded and even-handed of their rivals, contacted Douglas H. Shulman, then-IRS commissioner, to express concern that political factors were affecting the agency’s activities.
Nine years ago the American Bar Association created a task force to examine this question and found there was “no statutory basis” for the principle “that social welfare does not include political intervention.” Indeed, in 1990 — smack in the middle of a Republican administration — the director of the IRS Exempt Organizations Technical Division told a conference (and you can imagine what a lively, fun-packed convention this was):
“When it comes to political activities — that is, giving money to a candidate, telling people to vote for a certain candidate — the rule is that it has to be less than primary. If it’s 49 percent of their income, that is less than primary.”