By Pam Martens and Russ Martens: July 18, 2018 ~
The Trump administration has been the gift that keeps on giving to billionaire Charles Koch’s vast network of political front groups known as the Kochtopus. Its democracy-smothering tentacles have wrapped themselves around everything from the U.S. judicial system, to elections, to climate change, higher ed, news dissemination, and how laws are made in Washington and at the state level. (See related articles below.)
Charles Koch’s wealth, and that of his brother, David, derives from their majority ownership of Koch Industries, one of the largest private corporations in the world with major interests in fossil fuels, chemicals, paper products, and commodities trading. Forbes puts their net worth at $51 billion each.
The Trump administration, now packed full of Koctopus operatives, has been rapidly running a playbook for the Koch machine: withdrawal from the Paris Climate Accord – check. Tax cuts for corporations and the rich – check. Gut the Environmental Protection Agency – check. Make their ally, Betsy DeVos, Secretary of Education – check. Gut Federal regulations – check. Build skepticism toward NATO – check. The list goes on and on.
Now comes another bonanza. On Monday the U.S. Treasury announced that certain types of tax exempt organizations (read Koch front groups) would no longer have to reveal the names and addresses of their donors to the IRS. That information has never been available to the public, but now it will no longer be available to the IRS in order for it to quickly detect patterns of fraud, illegal foreign donors inserting themselves into U.S. elections, or a mega-billionaire and his cronies potentially outspending an entire political party in an election.
In making the announcement, U.S. Treasury Secretary Steve Mnuchin stated this in a press release:
“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area. It is important to emphasize that this change will in no way limit transparency.”
This is simply more of the Orwellian Reverse-Speak that the Trump administration has adopted as the official language in the executive branch, such as the recent “would” now means “wouldn’t” in the press conference with Putin.
The IRS does in fact need that donor information to do its job and the direct goal of this rule change is to limit transparency of tax-exempt groups like those funded by the Charles Koch political octopus. While the change will not apply to 501(c)(3) and 527 tax exempt groups, it will apply to many of the Koch-funded operations. Two key Koch front groups, Americans for Prosperity (a 501(c)(4) operation) and the bizarrely structured Freedom Partners Chamber of Commerce (a 501(c)(6) group) will not have to disclose the names of their donors. Freedom Partners is the stealthy, deeply-Koch affiliated group that has funneled $486 million of dark money into the Koch network of front groups or related organizations since its formation in 2011. All but one of its 9-member Board of Directors is a current or former Koch company employee.
In 2016, when the House of Representatives was considering a bill that would make similar changes to tax law, eight public interest groups wrote to the members of the House Ways and Means Committee urging them to block the legislation from moving forward. They wrote:
“While foreign money cannot be legally given or spent in our elections, the only real protection we currently have against the use of 501(c)(4) groups to launder foreign money into federal elections is that 501(c)(4) groups must disclose their donors, including foreign donors, to the IRS. This requirement means that 501(c)(4) groups know they can be held accountable if they illegally spend foreign money in U.S. elections.”
The action by the Treasury department, the parent Federal agency to the IRS, comes as the Senate Finance Committee is expected to vote on Trump’s nominee, Charles (Chuck) Rettig, to head the IRS this Thursday. Rettig has been with the California-based tax law firm Hochman, Salkin, Rettig, Toscher & Perez for more than 35 years serving corporations and the wealthy. In preparation for his Senate confirmation hearing which occurred in June, Rettig released a financial disclosure document which revealed some of his clients. He did, however, fail to disclose 26 clients who he said were subject to nonpublic investigations. That’s another dark hole in a country where representative government that works for average Americans has been increasingly surrendered to dark money interests.