Secret money groups will have to work harder this year to keep their spending hidden.
That’s because of a legal complication that is sending some Republican operatives back to the drawing board this cycle: Since Hillary Clinton is not a current federal officeholder — like Obama was in 2012 or Clinton was until she left his administration in 2013 — the nonprofit groups need to find more oblique ways to spend the money that they aren’t allowed to dedicate to full-throttle attacks.
If Clinton were a current official, Republican groups could argue that these ads were merely debating the issues, allowing them to maintain their tax-exempt status while nevertheless dedicating nearly their entire media budgets to ads that slice and dice the Democratic hopeful.
Now, they’ll have to get creative.
“Sometimes it’s nice to have a big fat hammer to hit someone,” said Dan Backer, an election attorney who advises many conservative outside spending groups.
But now they will have to carefully adapt. “You get the outcomes you want as long as you listen to your lawyers,” Backer said.
In 2012, political nonprofit groups’ signature move on television was to implore Americans to “tell President Obama” that they disagreed with him on raising taxes, on capping carbon emissions or on forcing Obamacare.
Because they weren’t asking voters to actually boot him from the White House that fall — just to “tell” a politician something like they tell their neighbors — the outside spending organizations could consider these advertisements as issue spots, meaning they had more legal wiggle room when they wanted to launch their real broadsides.
But in 2016, “telling” Hillary Clinton something is equivalent to any other powerful chop.
Few Republican operatives or election lawyers who specialize in outside spending are worried about the new landscape. An obstacle, conservative strategists say, but hardly one that is insurmountable.
And it is one that Democratic operatives will have to grapple with as well, assuming they don’t square off against one of the four sitting U.S. senators seeking the GOP nomination. It is not an unfamiliar challenge: Liberal nonprofits in 2012 had to face a non-officeholder in Mitt Romney, though they were hardly the main player and the amount of money they spent that year pales to what Republican ones will spend this year.
Months before the first scripts are sent to television producers, Republicans are huddling with their attorneys to learn how to launch their spots without tripping over the landmines that could jeopardize their precious position. At the least, Republicans acknowledge, it means they will have less flexibility when writing ads than they had in 2012.
The ideas kicked around Republican circles range from the likely — running issue spots about her past record as a federal officeholder or attacking the “Obama-Clinton foreign policy” — to the clever — using photographs of Clinton rather than words to convey the negativity — to the absurd — telling Clinton to tell her congressmen to act a certain way.
“If you’re engaged in advertising that targets them, it’s hard to make the argument that’s not political spending,” said Nick Ryan, a top Iowa-based Republican strategist in the world of political nonprofits. But “if you are a properly organized [501(c)(4) nonprofit], this has always been something that you’ve been concerned about.”
The most at-risk nonprofits, many Republicans agree, are the fly-by-night, mom-and-pop-run organizations that are more likely to say the wrong thing.
At the heart of the conundrum is the murky and largely unregulated campaign finance world where 501(c)(4) organizations reign supreme. In order to remain tax-exempt, a group’s “primary purpose” must not be politics, but rather issue education. While the Internal Revenue Service, which governs these groups, has struggled to make clear what exactly that means, strategists generally interpret that by spending less than half of their money on express political advocacy.
But that still means they have plenty of money to influence elections. In 2006, politically active nonprofits spent less than $5.2 million during the 2006 elections. Six years later, they sunk over $300 million into the 2012 races.
And what makes them attractive to deep-pocketed backers is that the groups don’t have to disclose their donors, unlike their counterparts in the world of outside spending, super PACS. Those super PACs may have to share the names of their contributors, but because they can spend all their money on express advocacy, they don’t have to worry about what they can and can’t “tell” Hillary Clinton.
Some advocacy groups who spend through both a nonprofit and a super PAC predict they’ll spend a larger proportion through the latter than they would during 2012.
And for 501(c)(4) organizations, the ground may be shifting beneath their feet: The IRS is currently drafting new rules to regulate these so-called “dark money” groups, though they are not expected to be ready to govern the 2016 elections.
Marc Owens, who used to head the division of tax-exempt organizations for the IRS, cautioned that election attorneys should be careful given the agency’s current skepticism toward the nonprofits’ claims that their primary purpose is not politics.
They’re on watch and issue ads aren’t fooling anyone, Owens says.
“The IRS sees through that fairly transparent effort,” he said.
But that doesn’t mean that (c)(4) organizations won’t try their best to fool them back.
The most common idea pushed by Republican lawyers and operatives is to modify the 2012 playbook in two ways: What issues form the brunt of the anti-Clinton attack, and the phrasing of the eventual “asks.”
Craig Engle, an attorney who works with many conservative groups, recommended hitting Clinton on her tenure as secretary of state — her past record as a federal officeholder is fair game.
“You could come up with an advertising campaign that was critical of her tenure regarding Benghazi, or her emails. Regardless of whether or not she was a candidate for president, she does — in people’s minds — have explaining to do,” Engle explained.
And how would the final seconds of those advertisements be different? Engle said the “tell” ask — which he said he invented 25 years ago — might fade into the rear-view mirror this cycle.
That’s true for Democrats eager to attack the Republican cast of characters as well, which is led in part by a former Florida governor, Jeb Bush, and features few federal leaders in the 15-candidate field.
“What would you tell Jeb?” Engle wondered. “You’d be able to tell Ted Cruz, for example — just because one’s an officeholder and one isn’t,” Engle explained.
