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HomeNewsOpinion | Leonard Leo's $1.6 billion donation reveals how cash corrupts politics

Opinion | Leonard Leo’s $1.6 billion donation reveals how cash corrupts politics


One man has donated $1.6 billion to a nonprofit group managed by a conservative activist who has crusaded, with startling success, to rework the nation’s politics. The one purpose the general public is aware of about it? An insider tip-off to the New York Occasions.

The Occasions reported this week that electronics mogul Barre Seid final yr gave one hundred pc of the shares of surge protector and data-center tools producer Tripp Lite to a gaggle known as Marble Freedom Belief. The group is led by Leonard Leo — who has helped bankroll right-wing advocacy on abortion rights, voting and local weather change, amongst different issues. His chief focus for a time was reshaping the judiciary as government vp of the Federalist Society, together with by advising Republican presidents on Supreme Court docket nominees. The story of how his group received such a lavish present underscores the unhappy state of this nation’s marketing campaign finance system.

The Marble Freedom Belief donation, probably the most important ever to such an advocacy group in U.S. historical past, manages to encapsulate in a single case the issues with the established order. The difficulty isn’t merely the distortion of democracy enabled by 2010′s Residents United v. Federal Election Fee. That call allowed for limitless political spending by firms and outdoors teams — to which, in flip, the ultra-wealthy can funnel limitless funds of their very own. The difficulty can be that the distortion stays, normally, invisible. Nonprofits teams registered as 501(c)(4)s, akin to Marble Freedom Belief, don’t must disclose their donors.

Including insult to harm, donors also can use these nonprofits to scale back taxes — on this occasion, to the tune of someplace round $400 million. To promote his firm on his personal, Mr. Seid would have needed to pay capital good points taxes, leaving him with much less to bequeath to Marble Freedom Belief. However as supposed “social welfare organizations,” 501(c)(4)s are exempt from paying taxes. So as an alternative he handed his shares over to the trust, which then itself bought Tripp Lite: for the $1.6 billion now in Mr. Leo’s coffers. Consequently, dutiful on a regular basis taxpayers basically finance the extravagant expenditures of the privileged few, who use their know-how to keep away from their obligations and twist the political panorama.

Congress ought to shut the tax loophole these donors exploit. And the Disclose Act, some model of which has been languishing in Congress for greater than a decade, blocked by GOP filibusters, would no less than inform voters who’s making an attempt to purchase their votes. The Inside Income Service can enhance issues by itself by gathering donors’ data once more, after it stopped in 2018. Sadly, and not using a change in Supreme Court docket precedent or a constitutional modification, solely marginal enhancements are potential.

Mr. Leo defended his gambit by saying it’s “excessive time for the conservative motion to be among the many ranks of George Soros, Hansjörg Wyss, Arabella Advisors and different left-wing philanthropists, going toe-to-toe within the combat to defend our structure and its beliefs.” Actually, it’s not toe-to-toe however billions-to-billions — and neither aspect needs to be happy with that.

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