Who are No Labels’ donors? Democratic groups file complaints in an attempt to find out
WASHINGTON — For months, the centrist group No Labels has been stockpiling cash and working hard to secure access to ballots for a potential third-party presidential bid, raising fears among allies of President Joe Biden that the effort could siphon off votes and could hand the White House to Donald Trump. .
With a rematch between Biden and Trump looking likely, two Democratic-leaning groups filed campaign finance complaints this week, hoping to curtail No Labels’ pipeline of campaign money and force the group to follow the same rules as formal political parties.
The complaints, filed by the groups End Citizens United and Accountable.US, are part of a broader Democratic effort to increase legal scrutiny and stoke public disdain for No Labels as it teases a possible White House run by an as-yet unannounced ticket that many Democrats fear will play an electoral spoiler.
“We will continue to work with our partners to hold (No Labels) legally accountable, publicly expose them and ensure they play by the same rules as everyone else,” said End Citizens president Tiffany Muller. United. “I don’t think it’s a secret that No Labels is a threat to our democracy if they run a third party (candidate). That will siphon votes away from President Biden and re-elect Donald Trump.”
In a statement Wednesday, No Labels disputed any suggestion that the group had done anything improper and dismissed the complaints as part of a “coordinated conspiracy to undermine No Labels’ access to ballots and limit Americans’ choices.”
No Labels regularly promotes itself as a ‘common sense’ centrist political party with bipartisan support. But it is actually registered as a nonprofit with the IRS — and not as a formal political party. That has allowed No Labels to operate with limited transparency while accepting unlimited amounts of money from an anonymous group of donors – a funding source often pejoratively referred to as “dark money.”
If the Democratic-aligned groups are successful, No Labels would not only be forced to register as a formal political party with the Federal Election Commission, but would also have its tax-exempt status revoked and be forced to adhere to the same donation amount. borders as other political parties and are obliged to disclose their major donors.
That’s a big if.
Both the FEC and the IRS have been cautious in recent years about law enforcement groups that push the boundaries of campaign finance law. The FEC board, which is evenly divided between those who align with Democrats and those who align with Republicans, often stalls. The IRS, meanwhile, has largely shied away from enforcement since efforts to crack down on tea party groups during Barack Obama’s presidency drew a massive backlash.
Still, campaign finance experts say many of the Democratic groups’ legal arguments are sound.
Under a widespread interpretation of the IRS rules, political nonprofits are limited to making political activities up to 50% of their activities. End Citizens United states in its complaint that No Labels appears to be primarily engaged in political work “to oppose the candidacies of Joe Biden and Donald Trump.” It is also argued that No Labels violates a separate provision against the group’s activities that primarily benefit a private party – in this case No Labels. End Citizens United also plans to forward the complaint to authorities in states where No Labels operates, hoping local officials will consider pursuing the case.
The group’s complaint, filed with the FEC, alleges that No Labels’ level of spending and advocacy against the election of Biden and Trump imposes requirements in federal campaign finance law that require No Labels to register as a political party.
“It sounds like they have a strong argument. There is no question that what No Labels does, under any normal situation, makes them a political party,” said Adav Noti, executive director of the nonpartisan Campaign Legal Center in Washington and a former FEC lawyer.
The group Accountable.US filed its complaint in Colorado, where No Labels has qualified for party status, arguing that the group has failed to file quarterly campaign finance reports as required by state law. The goal is to force No Labels to reveal who its donors are.
Colorado includes an exemption for groups that are also registered with the FEC. But the complaint states that No Labels’ efforts to “hide behind” its national organization would create a dangerous loophole in Colorado campaign finance law, and allow national groups to funnel dark money into Colorado elections to be channeled through organizations at state level.’
No Labels chief strategist Ryan Clancy disputed suggestions that the group was in violation of campaign finance laws. He pointed to a federal case called Unity08 v. FEC, which he said set a precedent that sanctioned its approach.
Clancy said No Labels does not need to register as a political committee “as long as we are not actively supporting a specific candidate.”
But Noti, one of the attorneys who argued the case, said there are important differences between the 2010 case and what No Labels is doing now, characterizing the current argument as a bit “too cute.” In this case, No Labels may not be advocating for a specific candidate, but it is advocating against both Biden and Trump, who are.
“I think we’re past the too-fun phase, and the activity is now openly illegal, and they’re just trying to pass the time before enforcement can happen,” Noti said.
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Cooper reported from Phoenix.