Total surrender: IRS rolls over in face of political spending

New Leadership Colorado would seem to owe roughly $44,000 in IRS fines for its brief stint as a political hit team this campaign season. Add that sum to the $3.4 million the Treasury’s Inspector General estimates the IRS (pdf) will fail to collect in political group disclosure fines this year. As if you didn’t know already, the adults have left the building. The free-for-all U.S. campaign spending bender rages on.

New Leadership Colorado, one of dozens of political groups that have cropped up in the state this election year, came to life out of nowhere for a few weeks this summer to attack Sen. Michael Bennet during his Democratic primary race against Andrew Romanoff. Backed largely by state workers union UFCW, New Leadership ran false attack ads and robocall campaigns against Bennet, saying he voted against a Social Security cost-of-living increase, and pushing out dubious poll numbers suggesting Romanoff was pulling ahead in the race. The group spent $120,000 or more and then disappeared after Bennet defeated Romanoff in August.

Government watchdog group Citizens for Responsibility and Ethics in Washington (CREW) reports today that New Leadership filed its donor disclosure paperwork with the IRS this month and that the list of donors is unsurprisingly incomplete. Why unsurprising? Because increasingly smaller numbers of these groups file complete paperwork anymore, says CREW, partly because the IRS instructs them on how to not complete the paperwork– suggesting that filing incomplete paperwork is an option– and because the IRS further fails to collect fines related to nondisclosure, to the tune this year, as mentioned above, of three and half million dollars.

From the IRS 8872 form (pdf), setting out contribution and expenditure filing instructions for political organizations:

Non-Disclosed Amounts
As the last entry on Schedule A, list the aggregate amount of contributions that are required to be reported on this schedule for which the organization does not disclose all of the information required under section 527(j). Enter “Withheld” as the contributor’s name. If filing electronically, enter the organization’s address, the date of the report, and “NA” for occupation and employer. This amount is subject to the penalty for the failure to provide all the information required. See Penalty on page 2 for details.

Ernest Luning detailed the dirty dealings of New Leadership in a Colorado Statesman article this summer.

New Leadership in Colorado, a newly formed 527 group fronted by Debbie Wamsley — who was, until recently, chief of staff of the Colorado AFL-CIO — came out swinging with a commercial that ran in heavy rotation on a liberal Denver talk radio station.

Sounding for all the world like a late-breaking news bulletin, the 60-second ad opens with an urgent tone:

“News from Washington coming in that Bennet voted against a cost-of-living increase for senior citizens on Social Security,” says a voice listeners soon learn belongs to someone named Susan. “So is Michael Bennet out of touch with seniors in Colorado, Mark?”

“That’s the charge being made, Susan,” says a male voice. “Senator Michael Bennet voted against Senate Amendment 3353 that would have provided senior citizens with a $250 increase in their Social Security. And that has some senior citizens furious.”

Then, over the sound of traffic — perhaps meant to indicate “Mark” is standing on a street corner somewhere — an elderly woman weighs in:

“He voted to bailout Wall Street, and now he won’t help folks like us who depend on Social Security? Senior citizens need to send Michael Bennet a message that this is not acceptable.”

“Thank you for that report, Mark,” the character called Susan responds. “And we’ll have new reports later,” she promises.

Every charge in the ad is false, the Bennet campaign said in an unusually strong rebuttal. The campaign offered up pages of detail blasting nearly every word in the 527 group’s attack, which was mirrored in a robocall that went out Wednesday too.

CREW points out that the Treasury Inspector found 26 percent of disclosure forms for 527 groups reviewed failed to completely fill out the forms and that the IRS was doing nothing about it.

In a parallel world, Debbie Wamsley, head of New Leadership Colorado, would owe Bennet an apology and taxpatyers $44,000.

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