This article appears in today’s Washington Post. The final paragraph states: “American Issues Project is organized as a qualified 501(c)4 under Internal Revenue Service guidelines. As such an entity, AIP must use 60 percent of all its funding to make issues-based appeals but can use the remaining 40 percent to directly advocate for or against the election of a candidate. Any money spent for express advocacy must be reported through the Federal Election Commission, meaning that donors to the group will eventually have their identities revealed.”
Whether or not’s that’s true as a matter of tax law (and whether there are other tax law issues with AIP), the fact remains that there are serious campaign finance questions raised by AIP’s activities. First, if the group has a “major purpose” of influencing the outcome of federal elections (and there’s no evidence it has had any purpose other than influencing the presidential campaign), then the group should be treated by federal camapign finance law as a political committee. Among other things, political committee status means the group would be violating the law if it took more than $5,000 from individuals. Here, Mr. Simmons has already given almost $3 million to the group. Second, there’s some good reason to believe that large donors to the group such as Mr. Simmons are violating the aggregate individual $108,200 campaign contribution limit for federal elections. (There may be some constitutional arguments against these limits, but I have not heard them yet raised by Mr. Simmons or AIP.)