July 30, 2014 SIGN IN | REGISTER

Rules of the Game: Obama's Nonprofit Carries on Dubious Tradition

Bill Clark/CQ Roll Call File Photo
Obama’s nonprofit advocacy arm, Organizing for America, has drawn criticism from watchdog groups that say it sets a dangerous precedent.

But watchdogs remain unconvinced and have continued calls for the group to close down. Organizing for Action is “a national scandal waiting to happen,” Democracy 21 President Fred Wertheimer said. The group is unprecedented as an official outgrowth of a presidential campaign, he noted. It’s run by former Obama aides and will leverage his campaign’s massive email list and sophisticated organizational apparatus.

Fueling critics are reports that bundlers who pull in $500,000 or more will enjoy quarterly meetings with Obama. During a daily briefing last week, White House Press Secretary Jay Carney protested that “any notion that there’s a set price for a meeting with the president is just wrong.” But Messina said only “we’ll see” last week when asked on CBS’ “This Morning” whether Obama would attend a “founder’s summit” for the group’s donors in Washington, D.C., this week.

At a minimum, Obama’s close links to Organizing for Action bode poorly for his alleged ethics agenda. His embrace of an unrestricted super PAC in the 2012 election has already disillusioned reform advocates. So have his failures to fulfill pledges to address the broken public financing system and the corporate money that flowed to both to the Democratic National Convention and to his inauguration.

Still, Obama had an opportunity this year to urge the IRS to enforce the regulations governing politically active tax-exempt groups, which in 2012 spent hundreds of millions in undisclosed dollars on campaign ads. He also had a chance to overhaul the fractious FEC, or at least install new commissioners.

But now that his nonprofit has emerged as a ripe IRS or FEC target, it’s hard to imagine Obama egging on those agencies to enforce the rules more vigorously. Likewise, Democrats on Capitol Hill could find it awkward to revive disclosure legislation that in the runup to the 2014 elections that could directly affect Obama’s group. (OFA is already launching gun safety ads aimed at specific lawmakers.)

By siphoning money and institutional support away from the Democratic National Committee, OFA may inadvertently fuel calls for further campaign finance deregulation. Some argue for lifting limits on political parties, which are increasingly overshadowed by outside groups and now operate under stricter rules than big-spending super PACs.

At worst, OFA opens a potential loophole in government ethics regulations designed to protect elected officials from influential lobbying interests. The group violates no obvious tax or campaign finance rules, election lawyers say.

Yet the prospect that members of Congress might follow the president’s lead and set up similar pet nonprofits alarms watchdogs. While OFA has agreed to voluntarily report its donors, such groups technically operate outside the disclosure rules, and there’s no guarantee that copycat organizations would follow OFA’s lead and open their books.

“This is a terrible and incredibly dangerous precedent,” Wertheimer said. “Because if the president as a federal officeholder can do this, it’s going to inevitably lead to other federal officeholders doing the same thing.”

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