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Big Spenders In Elections Catch The Eye Of Calif. Attorney General

Non-profits that have become some of the biggest spenders in politics could come under greater scrutiny in California.

Attorney General Xavier Becerra said Wednesday he will turn his attention to groups that have proliferated since the Supreme Court’s Citizens United decision.
Federal law now allows non-profits classified as “social welfare organizations” to spend unlimited money on political campaigns, although it’s not supposed to be their primary activity.

"People are using the not-for-profit status to actually do--not charitable activities--but politics," Becerra says. "Folks are not only abusing the system, but taking advantage of taxpayers who have to essentially back-fill the money these not-for-profits don’t pay in taxes, because of their status."

Since Citizens United, tax-exempt non-profits have become a favored vehicle for some name brands in politics. The Koch Brothers-backed Americans for Prosperity, for instance, spent $14 million in the 2016 election, while retaining tax-exempt status, according to the Center for Responsive Politics. The center calculates non-profit groups totalled almost $200 million of expenditures in the election.

It’s not clear exactly how Becerra could challenge these groups. The IRS determines tax-exempt status, although the California Attorney General can prosecute charities for fraudulent fundraising and misusing donations.

Additionally, most of the top non-profit political spenders in 2016 were conservative organizations, and an attempt by California's Democratic attorney general to crack down on them could be politically fraught.

In 2013, a top official at the IRS resigned after the agency's audits of tax-exempt status predominantly targeted conservative groups.

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