This is how it works. SuperPACs are allowed to spend unlimited amounts of money on political campaigns and other political activities, but they are required to disclose their donors. To avoid this, you just set up a non-profit organization, which is not required to disclose donors, to “launder” the money so you can’t tell where it came from, and then use it to fund other political organizations, like (you guessed it) SuperPACs.
For example, Karl Rove has a SuperPAC called American Crossroads. But he also has a 501(c)(4) non-profit called Crossroads GPS. Between them, they will spend around $300 million dollars on political activities in the upcoming election. In fact, they have already spent $11 million just on ads attacking Obama.
In case you were wondering, the GPS in Crossroads GPS stands for “Grassroots Policy Strategies”, yet 90% of their donations came from just two dozen donors. Two of those donors have given more than $10 million each. But there is no way to know who they are (the two could even be the same person). How’s that for grassroots?
Not only that, but IRS rules say that 501(c)(4) organizations are supposed to be “social welfare” groups, not political groups. But since the Supreme Court’s Citizens United decision, all organizations, even non-profits, are allowed to spend unlimited amounts of money on political speech. How that qualifies as “social welfare” is beyond me.
This is the frightening new face of American politics. Expect that billions of dollars will be spent on the upcoming election, and there is no way to know where the money came from, or what favors the donors are expecting from the politicians who benefit from their money.