Mysterious pro-Mitch McConnell group bankrolled by megadonors

Introduction

A secretive nonprofit group that helped boost Senate Majority Leader Mitch McConnell of Kentucky during his hotly contested 2014 re-election bid itself raised more money than McConnell’s challenger, Alison Lundergan Grimes, according to copies of the group’s tax filings obtained by the Center for Public Integrity.

The Kentucky Opportunity Coalition raised more than $21 million during 2013 and 2014, including $15 million last year alone, according to documents the group filed this week with the Internal Revenue Service. Most of the money came from just a handful of wealthy — and anonymous — donors.

Grimes, a Democrat, raised about $19 million for her campaign, while McConnell, a Republican, raised about $32 million, according to Federal Election Commission reports. McConnell ultimately defeated Grimes by a comfortable margin.

The pro-McConnell Kentucky Opportunity Coalition exemplifies the expanded role certain types of nonprofit groups are playing in politics following the U.S. Supreme Court’s 2010 decision in Citizens United v. FEC. That ruling allowed corporations, including some nonprofits that don’t publicly disclose their donors, to spend unlimited amounts of money advocating for the election or defeat of candidates.

Moreover, the Kentucky Opportunity Coalition appeared to work closely on behalf of only one candidate — McConnell — a tactic other nonprofits are now mimicking. Among them is the Conservative Solutions Project, which has spent millions of dollars touting Sen. Marco Rubio of Florida in the Republican presidential primary.

While the Kentucky Opportunity Coalition was a major player in Kentucky’s U.S. Senate contest, voters had little idea who was behind the group, which listed its physical address as a post office box in Louisville, Kentucky.

The group aired more than 12,400 television advertisements, according to a Center for Public Integrity analysis of data provided by advertising tracking firm Kantar Media/CMAG, which monitors broadcast and national cable — but not local cable — TV ads. That represented about one in every seven spots during the U.S. Senate race.

According to the new tax filing, the Kentucky Opportunity Coalition spent $7.6 million on “direct and indirect political campaign activities” in 2014 — about 41 percent of the nearly $18.7 million it spent overall. Advocating for or against candidates cannot be the “primary purpose” of such nonprofit groups.

Not counted in that sum: the nearly $9 million Kentucky Opportunity Coalition spent to “influence policymaking outcomes,” which included numerous TV ad buys praising McConnell for “standing up for Kentucky coal” and fighting back against President Barack Obama’s “war on coal.”

Nor does it include the additional $1.35 million the Kentucky Opportunity Coalition issued in grants to other nonprofit groups active in Kentucky’s U.S. Senate race — namely the $1 million it gave to the U.S. Chamber of Commerce and the $350,000 it contributed to Crossroads GPS, a nonprofit associated with veteran GOP strategist Karl Rove.

Like other “social welfare” nonprofits organized under Sec. 501(c)(4) of the U.S. tax code, the Kentucky Opportunity Coalition is generally not required to reveal the names of its financial supporters.

It must, however, list the amounts given by big donors. In 2014 alone, three unknown megadonors alone accounted for more than 60 percent of the $15 million the Kentucky Opportunity Coalition raised. The largest donor contributed $5 million. Another gave about $3.4 million. A third gave $1 million.

One known donor to the Kentucky Opportunity Coalition? Crossroads GPS, the conservative nonprofit that also received money from the pro-McConnell group last year.

Crossroads GPS told the IRS it last year gave the Kentucky Opportunity Coalition $390,000, as the Center for Public Integrity reported earlier this week.

Other tax records show that the Property Casualty Insurers Association of America contributed $25,000 to the Kentucky Opportunity Coalition in 2013. And a recent bankruptcy filing, first reported by the Intercept, indicates that the Kentucky Opportunity Coalition has also received an unknown amount of money from Alpha Natural Resources, one of the largest coal companies in America.

The Kentucky Opportunity Coalition was created in 2008. For years, it offered no indication that it would ultimately morph into one of Election 2014’s most prominent political players. As recently as 2013, it told the IRS its annual receipts did not exceed $50,000.

Last fall, after the group’s massive spending spree helped McConnell win re-election, government watchdog organization Citizens for Responsibility and Ethics in Washington asked the IRS to investigate the Kentucky Opportunity Coalition.

At the time, Melanie Sloan, then CREW’s executive director, told the Center for Public Integrity that the Kentucky Opportunity Coalition was “nothing more than a sham.”

Scott Jennings, a spokesman for the Kentucky Opportunity Coalition, did not immediately respond to a request for comment.

In the past, Jennings has maintained the group’s operations were legal, with much of the advertising having “no connection to any election” and being “of an issue nature.”