"Media coverage of this scandal has had the wrong starting line. It wasn’t the IRS that deluged its staff with thousands of applications from political groups pretending to be charities. It was groups following the advice or example of campaign consultants such as Karl Rove. He was the first to use this ruse on a large scale in order to run a shadow presidential campaign where he could hide his donors’ identities.
The way this works is simple. After the U.S. Supreme Court’s Citizens United ruling deregulated campaign finances, political operators looked for ambiguities to exploit and turned to non-profit tax law—knowing the agency's primary focus has nothing to do with electioneering. One of the legal ambiguities is the fiction that "public education" and "lobbying" activities by non-profits groups are not political (and thus subject to election law) if they comprise more than 50 percent of that group’s activities. So that’s what Karl Rove ginned up with his non-profit Crossroads GPS, which spent $123 million for the 2012 federal elections, according to the Sunlight Foundation, with 70 percent raised from secret donors."
