States Scrutinize Funding of Politically Active Nonprofits

Regulators in states with stringent campaign-finance laws are cracking down on tax-exempt groups that pursue political activities without revealing their funding sources, writes the Los Angeles Times. The article cites the California courtroom drama in the closing days of the 2012 campaign over an Arizona nonprofit organization’s contributions to ballot initiatives on taxes and unions, and rulings by judges in Idaho and Montana ordering donor disclosure by groups allegedly engaging in electioneering.

The state-level pressure contrasts sharply with the federal response, according to the Times. The Internal Revenue Service has taken only initial steps to examine politicking by 501(c)(4) social-welfare groups, which poured hundreds of millions of dollars into campaign advertising this year, and the Federal Election Commission is split over greater regulation of nonprofits’ political activity.

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