Daniel Hemel on Montana's Battle Against Dark-Money Groups

Montana vs. the Koch Brothers

Earlier this month, the Internal Revenue Service took a major step to make the world of political “dark money” even darker. Now, the state of Montana is working to turn the lights back on, filing a lawsuit seeking to reinstate a rule that requires dark-money groups to report their largest donors to tax authorities.

Dark-money groups are entities that can receive unlimited contributions from corporations and individuals and that are not required to disclose their donors’ identities to the public. Among these are Section 501(c)(4) “social welfare” organizations such as the Koch brothers’ Americans for Prosperity and the Trump-connected America First Policies. Election-related expenditures by these groups exploded after a 2007 Supreme Court decision struck down a provision of the bipartisan McCain–Feingold Act that had limited dark-money spending.

Although dark-money groups are not required to disclose their donors to the public, a federal regulation dating back to 1971 requires all organizations that are exempt from taxes under Section 501—including 501(c)(4) groups—to report the names and addresses of their “substantial contributors” to the IRS each year. A “substantial contributor” includes any individual or corporation that gives more than $5,000 to the organization. By law, this information is open to inspection by state tax authorities for the purpose of administering state tax laws.

Read more at Slate