Koch-linked operative mum on mystery millions

Introduction

Three years ago, the Center to Protect Patient Rights — a nonprofit grant-making organization fueled by the political fundraising network of conservative billionaires Charles and David Koch — made a seven-figure contribution to another nonprofit.

That transaction itself may not have been notable, except for the fact that the group, American Commitment, says it wasn’t the beneficiary of the money.

Now, Sean Noble — a political consultant who was chosen by the Koch brothers to quarterback their political efforts, and who signed the Center to Protect Patient Rights’ tax return disclosing the contribution under penalty of perjury — is refusing to explain where the missing $1.6 million went.

Noble did not respond to numerous requests for comment by phone and email. Upon two separate visits to Noble’s Washington, D.C., office, employees said Noble wasn’t there.

Reached by phone Monday after multiple inquiries by the Center for Public Integrity over two weeks, Jason Torchinsky, a lawyer who represents the Center to Protect Patient Rights, said he and his client are “reviewing the transaction.”

Torchinsky continued: “At this point, it is likely we will file an amendment, but what the amendment will be and when we will file it, I don’t know.”

When groups like Noble’s Center to Protect Patient Rights make grants to other organizations, they are, by law, required to provide detailed information about the beneficiaries. That includes not only the groups’ names but also their federal employer identification numbers.

That’s significant because in 2011, the Center to Protect Patient Rights told the Internal Revenue Service it gave $1.6 million — one of its largest grants that year — to a social welfare nonprofit called “American Commitment,” whose listed name and federal employer identification number matches the name and ID number of another group connected to Noble.

But that American Commitment, where Noble then served as a director, only reported raising $216,500 during 2011 — far less than $1.6 million.

When asked about this apparent discrepancy, which was first reported by the Center for Responsive Politics, American Commitment President Phil Kerpen said his group didn’t get the money.

“A different organization with which we are unaffiliated previously used the name,” Kerpen wrote in an email to the Center for Public Integrity.

Kerpen declined to elaborate beyond saying his nonprofit’s tax filings were “complete and accurate.”

A Center for Public Integrity review of business records does show two other groups have used the name “American Commitment,” in addition to the American Commitment run by Kerpen.

Both are connected to Noble. But neither of these other American Commitment groups appears to be the beneficiary of the mysterious $1.6 million grant from the Center to Protect Patient Rights.

For example, a limited liability company called Meridian Edition LLC was, for a period, called American Commitment LLC. This group, which is, for tax purposes, a subsidiary of the Center to Protect Patient Rights, reported no income to the IRS in 2011.

Meanwhile, a Virginia-based nonprofit named Free Enterprise America initially called itself American Commitment.

This group, which Noble led until it dissolved in 2012, told the IRS it raised nearly $5.9 million in 2011.

But Free Enterprise America listed just two seven-figure donations on its 2011 tax return — one for $2 million, the other nearly $3 million.

As required by law, the group disclosed the amount of money each of its donors gave. Their names are not required to be revealed.

Further confusing the matter: the same tax document that shows the Center to Protect Patient Rights giving $1.6 million to Kerpen’s American Commitment in 2011 also shows the Center to Protect Patient Rights giving more than $3.6 million to Free Enterprise America that year.

When reached by phone, the man who prepared the tax filings for both Free Enterprise America and the Center to Protect Patient Rights declined to comment and referred questions to Noble.

There’s “really nothing I can share with you,” said Howard Sckolnik, an Arizona-based accountant. “I can’t discuss anything because it’s not my place.”

A political consultant with offices both in Washington, D.C., and Arizona, Noble has reportedly fallen from the Koch brothers’ good graces, though his Center to Protect Patient Rights is still active in the political arena — now under the name American Encore.

Earlier this year, the Center to Protect Patient Rights, using its new name American Encore, teamed with Kerpen’s American Commitment and co-wrote a letter to the IRS urging the agency to scrap a proposal to further regulate politically active nonprofits.

American Encore has also taken to the TV airwaves to criticize Democratic lawmakers for supporting this proposal.

The IRS is debating new rules that would define how much money social welfare nonprofits may spend on political campaigns without jeopardizing their tax-exempt status.

Since it was formed in 2009, the Center to Protect Patient Rights has doled out more than $180 million to a cluster of groups that advocate for “limited government, free enterprise and patient rights,” including $14.8 million in 2011, when it made the mysterious $1.6 million grant.

Correction, Dec. 10, 2014, 12:25 p.m.: This story has been updated to clarify that Sean Noble no longer serves as a director of the Phil Kerpen-headed American Commitment.