Taxing social welfare groups

Propublica gives important background for understanding the alleged improper actions of the IRS:

In the furious fallout from the revelation that the IRS flagged applications from conservative nonprofits for extra review because of their political activity, some points about the big picture -- and big donors -- have fallen through the cracks. Consider this our Top 6 list of need-to-know facts on social welfare nonprofits, also known as dark money groups because they don’t have to disclose their donors. The groups poured more than $256 million into the 2012 federal elections. A century ago, Congress created a tax exemption for social welfare nonprofits. The statute defining the groups says they are supposed to be “operated exclusively for the promotion of social welfare.” But in 1959, the regulators interpreted the “exclusively” part of the statute to mean groups had to be “primarily” engaged in enhancing social welfare. This later opened the door to political spending.
Here are the six points elaborated by Propublica:
1. Social welfare nonprofits are supposed to have social welfare, and not politics, as their “primary” purpose. 2. Donors to social welfare nonprofits are anonymous for a reason. 3. The Supreme Court’s Citizens United decision meant that corporations could pay for political ads, anonymously, using social welfare nonprofits. 4. Social welfare nonprofits do not actually have to apply to the IRS for recognition as tax-exempt organizations. 5. Most of the money spent on elections by social welfare nonprofits supports Republicans. 6. Some social welfare groups promised in their applications, under penalty of perjury, that they wouldn’t get involved in elections. Then they did just that.

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Proposed legislation deals with too big to fail

Bernie Sanders is one of the few incorruptible Senators. It's not surprising, then, that it was Sanders who stepped forward to proposed legislation to actually break up the largest banks. It's distressing that laws accomplishing this weren't passed back in 2008, but not surprising, since the banks own Congress. Politico reports:

Sen. Bernie Sanders proposed legislation today that would break up the big banks and financial institutions that crashed the economy. The ending of too big to fail would also open the door to criminal prosecutions. Sen. Sanders called ending too big to fail a matter of justice, “We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail. That is unacceptable and that has got to change because America is based on a system of law and justice. In my view, no single financial institution should have holdings so extensive that its failure could send the world economy into crisis. At the very least, no institution, no CEO in America should be above the law. If an institution is too big to fail, it is too big to exist.” The legislation makes its intended purpose clear, “Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.

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A whole new political world

From Alternet:

With the advent of super PACs and a growing reliance on secretly funded nonprofits, the very wealthy can pour their money into the political system with an ease that didn't exist as recently as this moment in Barack Obama's first term in office. For now at least, Sheldon Adelson is an extreme example, but he portends a future in which 1-percenters can flood the system with money in ways beyond the dreams of ordinary Americans. In the meantime, the traditional political parties, barred from taking all that limitless cash, seem to be sliding toward irrelevance. They are losing their grip on the political process, political observers say, leaving motivated millionaires and billionaires to handpick the candidates and the issues. "It'll be wealthy people getting together and picking horses and riding those horses through a primary process and maybe upending the consensus of the party," a Democratic strategist recently told me. "We're in a whole new world.

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More about the big foreclosure settlement

From Matt Taibbi:

In advance of that notorious settlement, the government ordered banks to hire "independent" consultants to examine their loan files to see just exactly how corrupt they were. Now it comes out that not only were these consultants not so independent, not only did they very likely skew the numbers seriously in favor of the banks, and not only were these few consultants paid over $2 billion (over 20 percent of the entire settlement amount) while the average homeowner only received $300 in the deal – in addition to all of that, it appears that federal regulators will not turn over the evidence of impropriety they discovered during these reviews to homeowners who may want to sue the banks. In other words, the government not only ordered the banks to hire consultants who may have gamed the foreclosure settlement in favor of the banks, but the regulators themselves are hiding the information from the public in order to shield the banks from further lawsuits."
You owe it to yourself to click the link to Rolling Stone. Taibbi's article features Senator Warren grilling the corrupt government agencies who are protecting the corrupt banks. This is unbelievable stuff, except that it's real.

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