For months, the centrist group No Labels has been stockpiling cash and working hard to secure access to ballots for a potential third-party presidential bid, raising fears among President Biden’s allies that the effort could siphon off votes and could hand over the White House to Donald Trump.

With a rematch between Biden and Trump looking likely, two Democratic-leaning groups filed campaign finance complaints this week, hoping to curtail No Labels’ pipeline of campaign money and force the group to follow the same rules as formal political parties.

The complaints, filed by the groups End Citizens United and Accountable.US, are part of a broader Democratic effort to ramp up legal scrutiny and stoke public disdain for No Labels as it teases a possible White House run by a yet-unannounced ticket that many Democrats fear will play an electoral spoiler.

We continue to work with our partners to hold on in every way possible [No Labels] legally liable, to expose them publicly and to ensure they play by the same rules as everyone else, said Tiffany Muller,

the

president of

the interest group

End Citizens United. I don’t think it’s a secret that No Labels is a threat to our democracy if they run a third party [candidate]. “That will siphon votes away from President Biden and re-elect Donald Trump.”

In a statement Wednesday, No Labels disputed any suggestion that the group had done anything improper and dismissed the complaints as part of a coordinated conspiracy to undermine No Labels’ access to ballots and limit Americans’ choices.

No Labels regularly promotes itself as a common-sense, centrist political party with bipartisan support. But it is actually registered as a nonprofit organization with the IRS and not as a formal political party. That has allowed No Labels to operate with limited transparency while accepting unlimited amounts of money from an anonymous group of donors, a funding source often pejoratively referred to as “dark money.”

If the Democratic-aligned groups are successful, No Labels would not only be forced to register as a formal political party with the Federal Election Commission, but would also have its tax-exempt status revoked and be forced to adhere to the same donation amount. borders as other political parties and are obliged to disclose their major donors.

That’s a big if.

Both the FEC and the IRS have been cautious in recent years about law enforcement groups that push the boundaries of campaign finance law. The FEC board, which is evenly divided between those who align with Democrats and those who align with Republicans, often stalls. The IRS, meanwhile, has largely shied away from enforcement since efforts to crack down on tea party groups during this period

the barracks

Obama

‘S

presidency provoked enormous reactions.

Still, campaign finance experts say many of the Democratic groups’ legal arguments are sound.

Under a widespread interpretation of the IRS rules, political nonprofits are limited to conducting 50% of their business on political activities. End Citizens United states in its complaint that No Labels appears to be primarily engaged in political work to oppose the candidacies of Joe Biden and Donald Trump. It is also argued that No Labels violates a separate provision against the group’s activities, which in this case mainly benefit a private party, No Labels. End Citizens United also plans to forward the complaint to authorities in states where No Labels operates, hoping local officials will consider pursuing the case.

The group’s complaint, filed with the FEC, alleges that No Labels’ level of spending and advocacy against the election of Biden and Trump imposes requirements in federal campaign finance law that require No Labels to register as a political party.

It seems they have a strong argument. There’s no doubt that what No Labels does, under any normal situation, makes them a political party, said Adav Noti, executive director of the nonpartisan Campaign Legal Center in Washington and a former FEC attorney.

The group Accountable.US filed its complaint in Colorado, where No Labels has qualified for party status, arguing that the group has failed to file quarterly campaign finance reports as required by state law. The goal is to force No Labels to reveal the identities of its donors.

Colorado includes an exemption for groups that are also registered with the FEC. But the complaint alleges that No Labels’ attempts to hide behind “its national organization” would create a dangerous loophole in Colorado campaign finance law and allow national groups to funnel dark money into Colorado elections through state-level organizations.

No Labels chief strategist Ryan Clancy disputed suggestions that the group was in violation of campaign finance laws. He pointed to a federal lawsuit, Unity08 vs. FEC, which he said set a precedent in which its approach was punished.

Clancy said No Labels does not need to register as a political committee as long as we do not actively support a specific candidate.”

But Noti, one of the attorneys who argued the case, said there are important differences between the 2010 case and what No Labels is doing now, characterizing the current argument as a bit too cute. In this case, No Labels may not be advocating for a specific candidate, but it is advocating against both Biden and Trump, who are.

I think we’re past the too-cute phase, and now the activity is openly illegal, and they’re just trying to pass the time before enforcement can act, Noti said.