As the campaign season heats up, there is growing evidence that corporations and others are directing campaign contributions to tax-exempt organizations not subject to disclosure requirements that apply to candidates, parties, and political action committees, the New York Times reports.

Two years after the Supreme Court decision on Citizens United opened the door for corporate spending on elections, relatively little corporate money has flowed into so-called "super PACs," which can accept unlimited contributions but must disclose the names of their donors. Instead, based on a review of corporate governance reports, nonprofit organization tax returns, and regulatory filings by insurers and labor unions, the Times found that some of the biggest recipients of corporate money are 501(c)(4) organizations, so-called "social welfare" groups ostensibly dedicated to advancing community interests. Because (c)(4)s are not considered to be political organizations by the Internal Revenue Service and therefore are not required to disclose their donors, they can be used to shield corporate contributors from criticism by shareholders and others.

Although prohibited from focusing on political activity, many 501(c)(4) organizations spend the bulk of their funds on "educational" issue advertisements. But because the IRS has no clear test for determining what constitutes excessive political activity by a social welfare group, groups organized under the (c)(4) section of the Internal Revenue Code can and often do raise and spend money long before they receive their tax exemption. For example, two years after spending millions of dollars on issue advertising during the 2010 midterm elections, Crossroads GPS — a group co-founded by Republican strategist Karl Rove — is still waiting for its tax-exempt status to be approved.

Such tax-exempt groups outspent super PACs by a 3-to-2 margin during the 2010 elections, according to a study by the Center for Responsive Politics and the Center for Public Integrity. Indeed, (c)(4) organizations account for two-thirds of the issue ads bought by the biggest outside spenders in the current election cycle — close to $100 million, according to Kantar Media's Campaign Media Analysis Group. And their growing role in American politics has prompted a rash of complaints and lawsuits from watchdog groups that say their primary purpose has nothing to do with the promotion of social welfare and everything to do with winning elections. However, attempts to force politically active tax-exempt organizations to disclose more information about their donors and operations have been stymied by Republicans in Congress.

"These groups are being used as a conduit to hide from voters the identity of people and corporations who are bankrolling these television ads, which are designed to influence the outcome of elections," said Rep. Chris Van Hollen (D-MD).