The 2011 Republican primary season was rife with competition. A front-runner one day could wind up trailing in the polls just a few weeks later. Consequently, spending soared throughout the primary, with the Republican presidential candidates alone spending into the tens of millions before Mitt Romney emerged as the last candidate standing.
Yet, before the horse race began, many candidates had some house cleaning to do in order to remain electable. Michele Bachmann left her Lutheran church of 10 years, Herman Cain ended his alleged affair with Georgia White, and former Speaker of the House, Newt Gingrich, left his tax-exempt fundraising powerhouse, American Solutions for Winning the Future.
Before leaving, Gingrich helped the 527 organization become one of the largest such groups during the 2010 elections. Able to raise and spend over $28 million to bolster conservative causes, American Solutions for Winning the Future and the like-named Super PAC drew attention and seven figure checks alike.
American Solutions fizzled after several months before dropping off the radar, in step with Gingrich’s presidential campaign. Or, so it seemed.
The Center for Responsive Politics released the group’s IRS filings Friday, which revealed a new iteration of American Solutions. Transformed from a 527 to a 501(c)4 social welfare organization, the committee is now subject to significantly different campaign finance laws, but appears not to have changed much else.
Previously, American Solutions was required to disclose donors and report expenditures regularly. However, when classified as a ‘social welfare’ organization, disclosure standards are much more lenient.
Following the reboot, American Solutions 2.0 can keep donors anonymous and only needs to report spending annually, making it exceedingly difficult to accurately monitor during election cycles.
The filings reveal a puzzling mission statements, with clear similarities:
“American Solutions is a tri-partisan citizen action network creating the next generation of solutions that will ensure that the United States remains the safest, freest, and most prosperous country in the world”
“American Solutions is a tri-partisan citizen action network creating the next generation of solutions that will ensure that the United States remains the safest, most free and prosperous country in the world”
The legal distinction between 501(c)4’s and 527’s rests primarily on the latter’s more direct influence in promoting the election of candidates or ballot measures.
Aside from the principle officer, the superficial differences between both iterations of American Solutions, appears to skirt legal requirements for 501(c)4 tax-exempt social welfare organizations as they cannot be primarily engaged in influencing elections. Whereas 527 groups are allowed to focus on elections more exclusively.
Donors to the Gingrich Super PAC are no longer subject to traditional election regulations, which allows dark money to creep even deeper into elections.