Mystery donors pumped millions into liberal ‘dark money’ group

Introduction

A liberal “dark money” group that leads national and state-based Democratic coalitions and dubs itself the “hub of the progressive community” raised $13.4 million in its most recent fiscal year, spending about 43 percent of the total on “direct or indirect campaign activities,” according to a recently released tax document, a copy of which was obtained by the Center for Public Integrity.

America Votes swapped cash with other politically active nonprofits — including a handful with ties to the presumptive Democratic presidential nominee Hillary Clinton. Clinton has railed against a campaign finance system that allows such organizations to exist, even as her presidential candidacy benefits from it.

Little is known about who exactly funds America Votes.

About 60 percent of the nonprofit’s haul between July 2014 and June 2015 was provided by 11 anonymous donors who all gave at least $500,000. One undisclosed donor gave $1.3 million, according to the new tax document.

As a rule, America Votes and fellow 501(c)(4) “social welfare” nonprofits do not disclose their donors and are forbidden from making politics their “primary” purpose. Nonetheless, many such groups serve as vehicles for pouring millions of dollars into influencing elections, though they can’t spend the majority of their funds on politics. Such groups have proliferated since the 2010 U.S. Supreme Court’s Citizens United v. Federal Election Commission decision that opened the floodgates to high-octane, secretive election spending.

Right-leaning groups — namely “social welfare” nonprofits formed by billionaire brothers Charles and David Koch — are usually the first to be criticized for funneling money through these opaque channels. But liberal groups like America Votes indulge in the use of dark money too, by building a network of organizations that work in concert to get Democrats elected.

Still, during the 2012 election cycle, conservative dark money groups outspent liberal ones by about 8-to-1, according to the Center for Responsive Politics.

America Votes did not respond to specific questions from the Center for Public Integrity, but Sara Schreiber, managing director, issued a statement that read in part, “As per its IRS designation as an issues-based advocacy organization, America Votes is not required to publicly disclose its donors.”

In all, America Votes granted about $3 million to almost three dozen 501(c)(4) “social welfare” nonprofits between July 2014 and June 2015. While some of this went toward issue-based advocacy across states, a portion flowed to groups that are more overtly political.

Some of these organizations in turn spent money directly advocating or attacking federal or state candidates in 2014. These groups include Patriot Majority USA, Vote Vets Action Fund and North Carolina Citizens for Protecting Our Schools.

Receiving a $100,000 donation was Patriot Majority USA, a major player in 2014 U.S. Senate races in which Democrats tried unsuccessfully to retain control of the U.S. Senate. Patriot Majority USA is led by Craig Varoga, a liberal political operative tied to Senate Minority Leader Harry Reid, D-Nev.

In the same year that America Votes gave the $100,000, Patriot Majority USA spent $10.6 million on election contests — more than 95 percent of which went to attacking Republicans.

Money from America Votes trickled down to state races too, with the group giving $200,000 to North Carolina Citizens for Protecting Our Schools, a nonprofit tied to education labor unions.

North Carolina Citizens for Protecting Our Schools spent an estimated $679,700 on TV ads exclusively attacking Republicans running in state elections, according to a review of data compiled by Kantar Media/CMAG, a political advertising data firm. It also largely funded North Carolina Families First, which spent an estimated $1.6 million targeting Republican candidates.

Meanwhile, Vote Vets Action Fund spent more $2 million supporting Democrats and attacking Republicans in 2014, with $476,000 going to anti-Sen. Mitch McConnell expenditures.

Eric Schmeltzer, spokesman for Vote Vets Action Fund, said the nonprofit uses a majority of its funds for issue advocacy and does not voluntarily disclose donors “because the law does not require disclosure of people’s identities.”

“We maintain that privacy for individuals,” Schmeltzer added.

In 2016 so far, Vote Vets Action Fund has invested about $623,000 in the Illinois Senate race supporting Democrat Tammy Duckworth.

The Clinton-tied nonprofits in the America Votes expansive network are no strangers to the political scene.

The pro-Clinton outfits include the League of Conservation Voters, Human Rights Campaign and Planned Parenthood Action Fund — organizations that spend most of their resources on issue advocacy, but dole out considerable sums for political purposes. America Votes either donated to or listed these nonprofits as partners.

League of Conservation Voters, a nonprofit known for propping up pro-environment candidates, donated nearly $1 million to America Votes in 2014. In turn, America Votes gave a $50,000 grant to League of Conservation Voters.

League of Conservation Voters has so far this election cycle spent $164,000 on pro-Clinton activities following a somewhat controversial Clinton endorsement over opponent Bernie Sanders — who received a higher rating by the group for his pro-environment record.

Some of the donations are more shadowy — and complex.

During its last fiscal year, America Votes contributed $60,000 to Fair Share Inc.

Fair Share Inc. and Environment Inc. — listed as “partners” of America Votes on its website — donated $1 million to the pro-Clinton super PAC Priorities Action USA through a super PAC called Fair Share Action.

Greg Speed, president of America Votes, is the listed treasurer of Priorities USA Action.

America Votes was founded by a group of liberal operatives, including Harold Ickes, a longtime adviser to Bill and Hillary Clinton, as well as EMILY’s List founder Ellen Malcolm. EMILY’s List formed a joint fundraising committee with Priorities USA Action, spending around $439,000 supporting Clinton this election cycle.

Wendy Wendlandt, acting director for Fair Share Action and Fair Share Inc., said her groups differ from other dark money organizations.

“It’s important to distinguish between a grassroots group like Fair Share, which is organized with a social mission and those organizations which are specifically set up to shield political donors,” Wendlandt said.

“Until better rules are in place for controlling the influence of money in politics, no one expects one side or the other to stop playing by the current rules,” Wendlandt added. “We are using the weapons in our arsenal.”