Montana state senators raise big bucks with secretive nonprofit

Introduction

A secretive nonprofit connected to a pair of conservative Montana state senators, which spent heavily during the state’s contested 2012 Supreme Court race, raised more than $900,000 in 2012, according to a tax filing obtained by the Center for Public Integrity.

Five unnamed donors accounted for 70 percent of the Montana Growth Network’s receipts, with the largest contribution ringing in at $200,000.

Complaints filed with Montana’s Commissioner of Political Practices argue the Montana Growth Network should have registered as a political committee and disclosed its donors in 2012. But because the group operates as a “social welfare” nonprofit under Sec. 501(c)(4) of the U.S. tax code, its donors remain secret.

The group’s leaders include Republican state Sens. Jason Priest and Ed Walker, according to tax records, with Priest listed as the group’s executive director, president and treasurer.

In February, Priest was arrested and charged with assaulting his estranged wife, their four-year-old daughter and his wife’s boyfriend. He has pleaded not guilty to the charges, and a trial has been set for later this summer.

In an interview with the Center for Public Integrity, Priest lambasted the state’s political practices commission as a “kangaroo court” and maintained the Montana Growth Network’s messaging was not designed to influence elections.

“There are different vehicles for different things,” Priest said.

“You don’t buy a pick-up truck to commute to work if you live in San Diego,” he continued. “If you do issue advocacy, you set up a 501(c)(4).”

The group aims to “make Montana more business friendly,” according to an archived version of its now-defunct website.

Walker, who, like Priest, declined to identify the nonprofit’s funders, said the Montana Growth Network’s biggest achievement in 2012 was “educating Montanans about the activist nature of the court.”

Ahead of a three-way, nonpartisan primary in 2012, the Montana Growth Network reported spending about $42,000 on mailers that encouraged voters to support Laurie McKinnon, a district judge widely viewed as the most conservative candidate, as the Center for Public Integrity previously reported.

After McKinnon and attorney Ed Sheehy advanced to the November general election, the Montana Growth Network blasted Sheehy as an “activist” in mailings and radio ads. This spending went unreported with state regulators because it did not explicitly urge people to cast their votes against Sheehy.

Sheehy, who dismissed the Montana Growth Network’s allegations as “misrepresenting” what he did as a public defender, ultimately lost to McKinnon by 12 percentage points. Each candidate’s campaign spent about $40,000.

Even with the new tax filing, it’s still not clear how much money the Montana Growth Network spent on its issue ad blitz during the state Supreme Court contest.

The new tax form shows the group spent nearly $690,000 overall on “mailings and advertising” related to “judicial fairness, energy and the environment, taxes and the economy and healthcare.”

The bulk of that money went to three media consulting firms: Virginia-based SRCP Media and Montana-based Persuasion Innovation and 47 North Communications.

Additionally, the 2012 tax filing shows the Montana Growth Network contributed $50,000 to another conservative social welfare nonprofit: American Tradition Partnership.

American Tradition Partnership — previously known as Western Tradition Partnership — describes itself as “dedicated to fighting environmental extremism.” When it applied for tax-exempt status from the Internal Revenue Service, it said under the penalty of perjury that it would not directly or indirectly attempt to influence elections, as Frontline and ProPublica first reported.

But documents found in a Colorado meth house that were later turned over to Montana officials show the group appeared to coordinate with the campaigns of several Colorado and Montana candidates, as Frontline and ProPublica previously reported, leading to allegations that it engaged in illegal electioneering activities.

American Tradition Partnership, which has denied any wrongdoing, also gained notoriety after successfully suing Montana to force the state to abide by the U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling, which allowed corporations, unions and special interest groups to expressly advocate for the election or defeat of candidates.

Montana had prohibited corporate electioneering since it passed a law in 1912 that sought to reduce the influence of the “copper kings” and other mining magnates.

Social welfare nonprofits such as the Montana Growth Network and American Tradition Partnership aren’t legally required to publicly disclosure their donors. But grants made by nonprofits to other nonprofits must be disclosed in annual tax returns to the IRS.

Walker, the state senator, declined to speculate on the Montana Growth Network’s plans for the 2014 election cycle.

Priest said the organization would continue to engage in issue advocacy “on our own schedule,” not one “driven by the election cycle.”