Liberal heavyweight Patriot Majority USA fueled by secret, big-dollar donors

Introduction

A liberal, labor union-backed nonprofit that’s not supposed to be primarily political spent $23.7 million last year in the run-up to national elections — 46 times what it spent in 2011, a non-election year, according to its new Internal Revenue Service tax return.

And although it describes itself as a grassroots group, a single $6 million donation from an unnamed source made up one-fourth of Patriot Majority USA’s $23 million in 2012 revenue. More than half of its haul, $12 million, came from anonymous donors that gave more than $1 million each, its tax return indicates.

Patriot Majority USA states on its website that it advocates for “comprehensive campaign finance reform that increases transparency and limits the influence of greedy special interests who … buy elections.”

Unlike super PACs and traditional political campaign committees, nonprofits such as Patriot Majority USA aren’t required to disclose their donors because they supposedly exist to primarily promote the public good and social welfare. But nebulous Internal Revenue Service rules have led these “dark money” groups to proliferate and spend millions of dollars on politics. The agency proposed tightening the rules last week.

For its part, Patriot Majority USA reported spending $9.3 million on politics — almost 40 percent of its expenses. It reported the political spending was for “expenditures and grants for issue advocacy to educate voters on candidates’ views.” More than half of its $1.4 million in grants went to groups considered politically active such as American Working Families Action Fund and No on 3 Inc. in Florida, a group that opposed a constitutional amendment changing the way state revenue caps are set.

Patriot Majority USA also fields a super PAC — Patriot Majority PAC — that spent just a small fraction of what its nonprofit sister group did during 2012, according to the Center for Responsive Politics.

Patriot Majority USA’s overall expenses are nearly three times that of an arguably better-known liberal nonprofit group Priorities USA, which has ties to President Barack Obama.

And although the group doesn’t disclose its donors, the Huffington Post reported labor unions contributed $2.3 million to Patriot Majority USA last year, based on calculations from Department of Labor filings. The Alliance for Quality Nursing Home Care, a trade association, also gave the group $750,000, according to the Center for Responsive Politics.

Patriot Majority USA was formed in 2008 and technically spun off into a separate entity in 2011. When it applied to do that, it told the IRS it didn’t plan to hire employees and would instead rely on a “large base of volunteers” to developing and disseminating the organization’s message.

This hasn’t proven true. The organization reported no volunteers last year and paid its founder and president, Craig Varoga, $144,053 last year for 25 hours of work per week, according to its 2012 tax return. Other expenses reported include $11.6 million on a “media buy,” $2.5 million for direct mail production and $1.5 million on voter registration efforts.

Varoga, who was national field director for Gen. Wesley Clark’s 2004 presidential campaign, did not respond to questions from the Center for Public Integrity.

Varoga instead emailed a statement that his group “has been recognized by the IRS and has a very well defined, multi-year, bipartisan primary purpose, which is to work on economic solutions and encourage job creation throughout the United States.”

He wrote that it spent most of its energy last year on a national advocacy campaign including a bus tour and ads promoting voters’ rights and fighting policies promoted by billionaires David and Charles Koch and other conservative interests.

Conservative interests easily outspent liberal groups last year. Three of the largest liberal “dark money” nonprofits reported spending a combined $73 million on their latest tax returns, less than half of the $189 million spent by Karl Rove-created nonprofit Crossroads GPS alone.

Patriot Majority USA is already a major player in 2014 federal elections. This summer, it kicked in more than $544,000 for ads against Republicans running for U.S. Senate seats in Arkansas and Kentucky, according to Federal Election Commission records.

Michael Beckel contributed to this report.