Secret donors fuel Democratic political powerhouse

Introduction

Democratic Party-aligned “dark money” powerhouse Patriot Majority USA collected half of the $30 million it raised last year from five anonymous donors, according to a Center for Public Integrity analysis of a new tax filing from the group.

Patriot Majority USA was a major player in the Democrats’ failed bid to retain control of the U.S. Senate last year — a time when many Democratic candidates decried the influx of “dark money” in politics.

Led by Craig Varoga, a staunch ally of Senate Minority Leader Harry Reid, D-Nev., it was a particularly prolific force on television.

The group aired more than 15,000 TV ads in key Senate races, according to a Center for Public Integrity analysis of data provided by advertising firm Kantar Media/CMAG, which monitors broadcast and national cable TV ads. Not a single one was positive.

In all, 40 percent of the $34 million Patriot Majority USA spent in 2014 went toward “direct and indirect political campaign activities,” according to the group’s new tax filing — nearly $13.7 million.

But like other “social welfare” nonprofit groups organized under Sec. 501(c)(4) of the tax code, Patriot Majority USA is not required to publicly disclose the names of its donors.

Thus, it’s largely unknown who funded its political operations, which proved generally unsuccessful as Democratic incumbents lost in races across the country, including Arkansas, Louisiana and North Carolina, where the nonprofit group was the most active.

Such opacity contrasts with many Democrats’ rhetoric decrying secret money in politics and organizing to overturn the U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission. The ruling, in part, freed certain nonprofit groups to spend massive amounts of money on politics while withholding information about their contributors.

The biggest donor to the nonprofit gave $8.25 million, according to the new filing with the Internal Revenue Service, which lists the amounts received by Patriot Majority USA last year but not the donors’ names.

Six other unknown donors gave seven-figure sums. One gave $2.7 million. Another gave $2.2 million. One gave $1.2 million. And three gave $1 million.

About three-dozen other donors gave at least $100,000.

Other government filings indicate that some of Patriot Majority USA’s financial support came from labor unions.

The American Federation of State, County and Municipal Employees, for instance, gave Patriot Majority USA $750,000 in 2014, according to documents it submitted to the U.S. Department of Labor.

Meanwhile, in its own Department of Labor filings, the American Federation of Teachers states it gave Patriot Majority USA $550,000 last year.

Filings further show that the National Education Association gave Patriot Majority USA $50,000 last year and the International Brotherhood of Teamsters gave $10,000.

Campaign finance filings submitted to the Federal Election Commission also show that Democratic super PAC Senate Majority PAC contributed about $35,000 to Patriot Majority USA last year.

In the past, Patriot Majority USA has also received money from trade groups such as the Partnership for Quality Home Healthcare and the American Health Care Association.

Varoga, in an emailed statement, defended Patriot Majority USA’s work.

“Our c4 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. “The political work that we do is secondary to the larger economic mission of the Patriot Majority Action Plan.”

Patriot Majority USA’s significant spending on elections in 2014 drew fire from political observers on both the left and right.

“Under current law, that is unfortunately what is allowed, so groups on both sides of the aisle do what is allowed,” said Lisa Gilbert, director of consumer group Public Citizen’s Congress Watch division.

“It’s part of the reason why we need to fight to change the rules,” Gilbert continued, noting that her group has supported a push for the IRS to adopt more stringent rules on how much electoral activity such nonprofits can engage in. “Until we do so, money will flow in the directions it can.”

Conservative attorney Cleta Mitchell — who vehemently disagrees with Public Citizen’s call for new limits on nonprofits’ political spending — also criticized Varoga’s group.

“I don’t have an objection to an organization spending 40 percent of its money on political activities,” Mitchell said.

“What I do object to is the hypocrisy,” she continued. “Democrats are total hypocrites on all of this.”

This story was co-published with Al Jazeera America.