I believe that you are partially correct.
When the IRS removes the charitable/non profit status of 501c3 charities, the result can be fines and possible seizure of assets of the 501c3.
As of now the assets of the people involved are protected. So they just walk away from the wreckage, get more startup funding from George $oreA$$ and start a new 501c3.
A conservative lawyer in the DC area said the only way to stop this was to make the officers and board members of the 501c3 responsible for criminal acts. Over 6 years ago, he was for asset seizure of the execs and board members when they involved the 501c3's in illegal activities. Living in the DC area, he said that liberal criminals (his words) created 501c3's for illegal political activities on a regular basis. As soon as the need was over, they would end the 501c3 or change its name and mission. He felt that these 501c3's enabled the liberals to laundry money and create boiler rooms to defeat republican candidates. With what happened in 2004 and up to now, his warnings came true.
The following complicated transactions should draw scrutiny in legal and political circles. No question, these scams are duplicated nationwide.
(A) Candidates deliberately raise more corporate money from publicly-held corporations than they need, then divert some of the excess in a series of generous donations to 501c3 non-profit groups that, on the surface, benefited their mutual causes.
(B) The candidates' donations to non-profits are then illegally converted, then funneled back to candidates‘ campaign coffers through donations by the N/P officers and their co-conspirators, or subsets of them.
(C) Setting up foundations is the newest candidate financial instruments to commit fraud.
Candidates may use non-profit, ethnic, hyphenated, or faith-based groups as middlemen for campaign transactions by a pattern of candidates funneling money from family-run foundations---- to these different groups, that is laundered, then lands in candidates’ campaign accounts, in order to obscure, if not cover-up, the original source of donations to campaign coffers.
Candidates, their family, or henchmen might also direct that N/P donations be made in the names of others without their knowledge or consent.
When the financial merry-go-round stops, non-profit, ethnic, and faith-based individuals---the hyphenated groups candidates need to endorse their election efforts---end up with a lot of money, some of which was laundered, illegally converted, then funneled back into candidates’ campaign coffers.
Millions of dollars in donations to candidates might never have been disclosed to campaign regulators, because the type of groups candidates used aren’t governed by federal law.
The public-spirited N/P donors might not always have known where their tax-deductible money was headed, and don't control funds once they're donated. Money gets transferred all the time and remains disclosed only to the extent required to be disclosed by applicable state and federal law---obviously this gets complicated.
With regard to (A), as a collateral effect, state laws and campaign finance laws are violated in schemes that appear to launder corporate donations to a candidate, and should raise questions regarding whether shareholders in publicly-funded corporations were deceived, and whether the true destination of corporate money was concealed (SEC is interested in this).