Judge rules against IRS in Bullock 'dark money' lawsuit
The Great Falls Tribune
July 31, 2019
A federal district court judge in Great Falls has ruled against the IRS and U.S. Department of the Treasury in a lawsuit filed by Gov. Steve Bullock and the state of New Jersey challenging a move by the agency that made it easier for groups to hide their donors from disclosure, Bullock’s staff said Wednesday.
U.S. District Court Judge Brian Morris issued a decision late Tuesday in which he set aside the IRS’s decision to remove the disclosure rule for nonprofit organizations that commonly serve as the vehicle for so-called “dark money” spending in elections, Bullock said.
Morris found the IRS violated the Administrative Procedure Act by failing to give the public notice of the change or an opportunity to comment, as required by law.
He said the IRS action appears to represent an attempt to “evade the time-consuming procedures of the APA.” Morris said the IRS must follow the proper procedures if it seeks to adopt a similar rule.
Bullock called it a “big victory for Montanans, for Americans and for our representative democracy.”
“We’re holding the federal government accountable to following its own rules and making sure that people, not dark money groups, decide our elections,” he said in a news release.
IRS officials said Wednesday they do not comment on litigation.
The judge’s decision came shortly before Bullock went on stage in Detroit on Tuesday for the Democratic candidates’ debate.
Raph Graybill, Bullock's legal counsel, also called it a big win for the public.
"It’s not hard to follow the rules and do the right thing. The IRS chose simply not to," he said.
Bullock had also appeared as an attorney and was involved in authoring the original complaint and shepherding the case, his staff said.
A July 16, 2018 IRS rule change exempting several classes of federally tax-exempt organizations from disclosing the names and addresses of substantial contributors, which the state argues violated the Administrative Procedure Act.
Bullock said at the time the IRS decision eliminating the reporting requirement made it easier for organizations to hide sources of money spent in political campaigns, also known as "dark money", which is a major plank of his campaign platform.