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Watchdogs accuse outside groups of 'abusing tax laws'

Just last year, President Obama accused Republican operatives of trying to "hijack" the elections by setting up shadowy political groups to collect "secret" money from special  interest groups to run attack ads against Democrats. 

But today, campaign watchdog groups accused a new political group -- being run by a pair of former Obama White House aides -- of  doing precisely the same thing. 

In a letter to the IRS, the groups requested a formal investigation of Priorities USA, charging it was "abusing the tax laws" by masquerading as a tax exempt "social welfare" non-profit group , when it is actually a "shadow campaign organization" created to collect undisclosed campaign cash to insure the president's re-election.  

The campaign watchdog groups -- the Campaign Legal Center and Democracy 21 led by veteran reformer Fred Wertheimer -- also filed similar complaints against three other groups, including one Crossroads GPS, that is spearheaded by former Bush White House political guru Karl Rove. But the charges against the White House-allied Priorities USA are likely to get the most attention -- if only because the president and his top aides made the operations of such groups a major issue during last year's congressional elections.

Created by former White House deputy press secretary Bill Burton and Sean Sweeney, a former Obama political aide, the group -- along with a sister "Super PAC" called Priorities USA Action -- has set a goal of raising $100 million to back the president. The letter to the IRS quotes from an internal Priorities USA memo by Burton and Sweeney, saying they formed the group "to level the playing field and not allow right-wing activists to hijack the political system."

The complaint to the IRS today is designed to highlight a campaign finance system that reformers charge is now out of control largely as a result of last year's Citizens United ruling by the Supreme Court allowing unlimited donations by wealthy donors, corporations, and labor unions.

The ruling has led to a proliferation of so-called "Super PACs" created by allies of all the major presidential candidates that are now collecting tens of millions of dollars in contributions -- unrestrained by the legal limits of $2,500 per donor imposed on the candidates own campaign committees.  But reformers believe groups like Priorities USA and the Republican-allied Crossroads GPS are even more insidious because, unlike the Super PACs, the donations to these groups will never be made public.

Priorities USA, Crossroads GPS, and two other groups that are the subjects of today's complaints -- the American Action network -- founded last year by Republican fundraiser Fred Malek and former GOP Sen. Norm Coleman -- and Americans Elect, a third-party group, were all created as non-profit groups under a provision of the tax code -- 501 c (4) -- that does not require them to disclose their donors. 

Today's complaint charges that all of these groups are ineligible for such status because "the overriding purpose of each organization is to influence elections" -- not to engage in "social welfare" activity.