Levin Floor Statement on H.R. 3865

Feb 26, 2014

Ways and Means Committee Ranking Member Sander Levin (D-MI) delivered the following statement on the House floor today on the Republican bill that would delay the IRS from developing new regulations concerning 501(c)(4) organizations:

“On a day when the Chairman of the Ways and Means Committee, Mr. Camp, is unveiling a tax measure that requires serious bipartisanship to be successful, we are here on the floor considering a totally political bill in an attempt to resurrect an alleged scandal that never existed.

“Was there incompetence at the IRS in the processing of 501(c)(4) applications?  Yes. And I was among the very first who said that those leading the organization should be held accountable. Was there corruption, political interference, White House involvement, an enemies list as the Republicans have claimed since day one? Absolutely not.  There is no evidence whatsoever to support that claim.

“Yesterday the IRS commissioner confirmed that $8 million have been spent directly on those investigations, as over 255 people have spent more than 79,000 hours doing nothing but responding to congressional investigations.  An additional $6 million to $8 million have been spent to add capacity to information technology systems to process securely the 500,000 pages of documents Congress has received.

“And what have we learned?  That both progressive and conservative groups were inappropriately screened out by name and not by activity. And that no one was involved outside of the IRS and that there was no political motivation involved.  When the Inspector General asked his chief investigator to look into the possibility of political motivation by the IRS, that investigator concluded, and I quote, ‘There was no indication that pulling these selected applications was politically motivated. The email traffic indicated that there were unclear processing directions and the group wanted to make sure that they had guidance on processing the applications so they pulled them. That is a very important nuance.’  Indeed it is. 

“It's precisely that lack of clarity that the IRS was responding to in proposing new regulations for 501(c)(4) organizations. Those new regulations are designed to bring certainty in determining whether an organization's primary activities are political. The regulations are among several steps the Inspector General himself recommended the IRS undertake in his audit report. Each of which the Republicans repeatedly called for action on.

“On June 3, 2013, at a hearing before the House Appropriations Committee, Chairman Crenshaw told acting IRS Commissioner Danny Werfel that, “We are going to insist that the IRS implement all nine of the recommendations in the Inspector General's report.”  A Republican member of the Ways and Means Committee, Mr. Roskam, has a bill to implement all nine of the Inspector General's recommendations, including implementing new 501(c)(4) regulations. 

“Why is this important? Because applications for 501(c)(4) status have nearly doubled between 2010 and 2012 to 3,357, and 501(c)(4) spending has skyrocketed.  In 2006 $1 million was spent by 501(c)(4) organizations.  In 2010, $92 million was spent. And in 2012, $256 million was spent by 501(c)(4) organizations.

“The (c)(4) designation presently allows organizations to keep their donors secret. Hidden as to which individuals contributed.  That is exactly the secrecy that the Republicans are trying to preserve. Why? Because the three largest spenders representing fully 51% of the total are a who's who list of Republican political operatives. Karl Rove’s Crossroads GPS spent $71 million. Americans for Prosperity, the Koch brothers, spent $36 million. The American Future Fund, also the Koch brothers, spent $25 million.

“That’s $132 million of the $256 million that the Federal Election Committee had reported, according to the Center for Responsive Politics.  If you live in a targeted state and you turn on your television, you have probably seen these groups that work at distorting the Affordable Care Act. That is why we are here today purely and simply. Not because Republicans want to stand up for the rights of social welfare organizations, and they often talk about small ones, but to preserve the secrecy around the Republicans' big campaign efforts.

“These are draft regulations that the Republicans themselves called for.  More than 76,000 public comments have been received, and the comment period does not close until Friday.

“These regulations aren't likely to come out this year anyway with this many comments. So why this bill?  It's very clear and it's very simple – there is a problem with 501(c)(4)s. The three organizations that I mentioned are involved as political operatives in one form or another. These are people who have donors nobody knows. This is secret money.

“Why are we standing here and saying to the IRS don't look at 501(c)(4)s. Don't look at the possible massive abuse. Don't look at what has happened in the last few years where political operatives, under the guise of 501(c)(4), have moved from $1 million in many cases to $256 million as reported to the FEC.

“Our constituents, Democrats and Republicans, are offering their comments and some of them I agree with and they all deserve to be read, but not to be shredded at the hands of a November campaign strategy by the Republican party of this country and by the Republican conference of this House.”

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