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Lawmakers of both parties are desperately trying to stop the Internal Revenue Service from interfering with the most powerful political invention that ever fell into their laps: the use of non-profit groups as a source of unlimited and anonymous campaign money. If you want to understand why, consider an investigation now unfolding in Utah, which exposes in remarkable detail how profoundly the non-profit system can be corrupted for the benefit of a single industry and a single politician.

As Nicholas Confessore wrote in this morning’s Times, the case is in many ways the “nightmare scenario” for campaign finance reformers, but the nightmare has been going on for a long time.



The politician involved was John Swallow, a former lobbyist for an empire of payday-loan and check-cashing companies (the kind of places known for their exploitation of the poor). When Mr. Swallow ran for Utah Attorney General as a Republican in 2012, his strategist established several social-welfare groups, which don’t have to name their donors, so that the payday-loan industry could support him financially without anyone knowing.

Mr. Swallow didn’t want the connection to the industry exposed, because of the poor reputation of the lenders. But he had no problem promising to protect the industry from greater federal regulation if he were elected.

The groups collected hundreds of thousands of dollars in secret donations from the industry, and the money was used to run attack ads against Mr. Swallow’s opponent, who wanted to crack down on payday lenders. The ads worked, and Mr. Swallow was elected. When the I.R.S. started looking into the non-profit groups and demanding documentation, his strategist changed the group’s records, which investigators described as a falsification.

But the I.R.S. investigation was weakened when Congressional Republicans accused the agency (falsely) of singling out conservative non-profit groups. Eventually, a parallel state investigation drove Mr. Swallow from office; he resigned last fall, and last week a state legislative panel accused him of breaching the public trust by hanging “a veritable ‘for sale’ sign on the office door that invited moneyed interests to seek special treatment and favors.”

The scheme was clearly more brazen than most, but it’s largely a nightmare because it was exposed. That same sign is posted on the doors of politicians around the country, and will remain there until Congress lets the I.R.S. eliminate the unlimited secret money that is polluting American politics.