Americans for Responsible Leadership
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</div><div><h2 style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 19px; vertical-align: baseline; font-family: 'Whitney SSm A', 'Whitney SSm B', Helvetica, Arial, sans-serif;">Americans for Responsible Leadership</h2><div class="grants_incoming" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 13px; vertical-align: baseline; font-family: 'Whitney SSm A', 'Whitney SSm B', Helvetica, Arial, sans-serif; font-weight: 600; line-height: 15.989999771118164px;"><p class="eyebrow" style="margin: 0px; padding: 5px 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; line-height: 1.4; font-family: Arial; text-transform: uppercase; font-weight: normal; width: 280px;">GRANTS TO THIS ORGANIZATION FROM:</p><table style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 13px; vertical-align: baseline; border-collapse: collapse; border-spacing: 0px; line-height: 1.4; width: 280px;"><tbody style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(101, 82, 79); max-width: 150px; color: rgb(255, 255, 255);">Center to Protect Patient Rights</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$24,650,800</td></tr></tbody></table></div><div class="grants_outgoing" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 13px; vertical-align: baseline; font-family: 'Whitney SSm A', 'Whitney SSm B', Helvetica, Arial, sans-serif; font-weight: 600; line-height: 15.989999771118164px;"><p class="eyebrow" style="margin: 0px; padding: 5px 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; line-height: 1.4; font-family: Arial; text-transform: uppercase; font-weight: normal; width: 280px;">GRANTS FROM THIS ORGANIZATION TO:</p><table style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 13px; vertical-align: baseline; border-collapse: collapse; border-spacing: 0px; line-height: 1.4; width: 280px;"><tbody style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(152, 34, 185); max-width: 150px; color: rgb(255, 255, 255);">Small Business Action Committee</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$11,000,000</td></tr><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(152, 34, 185); max-width: 150px; color: rgb(255, 255, 255);">No New Taxes, No on Prop 204</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$925,000</td></tr><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(152, 34, 185); max-width: 150px; color: rgb(255, 255, 255);">Save Our Vote Opposing Prop 121</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$550,000</td></tr><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(152, 34, 185); max-width: 150px; color: rgb(255, 255, 255);">American Commitment</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$300,000</td></tr><tr style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; background-color: rgb(152, 34, 185); max-width: 150px; color: rgb(255, 255, 255);">Arizona Public Integrity Alliance</td><td style="margin: 0px; padding: 5px; border-width: 1px 0px 0px; border-top-style: solid; border-top-color: rgb(68, 68, 68); outline: 0px; vertical-align: baseline; max-width: 150px;">$7,500</td></tr></tbody></table></div></div><div>
<div>barker propub</div><div><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Two dark money groups linked to conservative billionaire brothers Charles and David Koch have paid a record $1 million in fines to California to settle allegations that the combined <a href="https://www.propublica.org/documents/item/809466-arizona-press-release.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">$15 million</a> they spent on two ballot proposals in the state was not properly disclosed.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The civil <a href="https://www.propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">settlement</a>, announced Thursday afternoon in Sacramento, caps a year of investigation into the activities of the two Arizona groups, Americans for Responsible Leadership and the Center to Protect Patient Rights.</p></div><div>
<div><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The settlement disclosed new details in the case, including how the money was raised and how the Center to Protect Patient Rights disguised its two contributions to two California political committees. As part of the settlement, the Center to Protect Patient Rights conceded it was responsible for funneling $11 million through Americans for Responsible Leadership to a <a href="http://latimesblogs.latimes.com/california-politics/2012/10/california-secret-political-donation.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">political committee</a> spending money to fight a tax-hike measure and to support a proposition restricting unions’ political power.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The Center to Protect Patient Rights also gave an additional $4 million to another dark money group, the American Future Fund, which gave the money to another political committee spending on the anti-union measure.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">“What is the takeaway from this trail of dark money?” asked Ann Ravel, the outgoing head of California’s Fair Political Practices Commission, which investigated the groups along with the state attorney general’s office. “This is a nationwide issue. These groups exploit loopholes in the law to undermine the clear purpose of the law, to give essential information to the public.”</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The state assessed one $500,000 fine to the Center to Protect Patient Rights only, and another $500,000 fine to the two groups jointly. The state is also demanding that the two <a href="https://www.propublica.org/documents/item/809465-sbac-disgorgement-letter.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">political</a><a href="https://www.propublica.org/documents/item/809464-cff-disgorgement-letter.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">committees</a> “disgorge,” or hand over, the $15 million they received in improper donations through the Center to Protect Patient Rights before the end of November. All of the money would go to California’s general fund.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">In an interview, Gary Winuk, the chief of enforcement for the California Fair Political Practices Commission, acknowledged that the state may have to go to court to recover that $15 million. One of the political committees has already <a href="http://cal-access.ss.ca.gov/Campaign/Committees/Detail.aspx?id=1351572&session=2013" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">closed down</a>.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The settlement says California authorities determined that the Center to Protect Patient Rights “inadvertently, or at worst negligently,” did not report itself as a donor to the American Future Fund. A similar decision was made on the <a href="https://www.propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag.html#document/p11/a128059" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">group’s</a> lack of disclosure to Americans for Responsible Leadership.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">In a statement sent through its lawyer, the Center to Protect Patient Rights said the commission recognized it erred largely because it had never before made contributions in California and that it had no intention to violate campaign reporting rules.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">“Also, the California Attorney General conducted a complete and thorough investigation and agreed that the conduct was unintentional and inadvertent,” said the lawyer, Malcolm Segal.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Americans for Responsible Leadership did not return a message seeking comment.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Anonymous money funneled through social welfare nonprofits and trade associations has become a major factor in federal elections since the Supreme Court’s Citizens United decision in early 2010 opened up the door to unlimited corporate and union spending on outside ads, as documented by <a href="http://www.propublica.org/article/how-nonprofits-spend-millions-on-elections-and-call-it-public-welfare" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">ProPublica</a>. In the past two election cycles, social welfare nonprofits have spent more than $350 million, mostly from unknown donors, on election ads telling people to vote for or against federal candidates.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Some national groups have also started playing on the state level, particularly with ballot proposals.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The California agreement, reached on Oct. 17, underscored how some states, such as California, <a href="http://voices.idahostatesman.com/2012/10/31/idahopolitics/mayor_bloomberg_albertsons_heir_scott_gave_combined_450000_educa" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">Idaho</a> and <a href="http://www.propublica.org/article/dark-money-groups-donors-revealed" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">Montana</a>, have actually done more to identify anonymous donors than the Federal Election Commission. In June, New York Attorney General Eric Schneiderman imposed regulations attempting to <a href="http://www.huffingtonpost.com/2013/06/05/eric-schneiderman-dark-money_n_3390329.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">require disclosure</a> for money spent on state elections. A new disclosure bill has been introduced in California. This month, after a push by California’s Ravel, regulators from <a href="http://www.washingtonpost.com/blogs/govbeat/wp/2013/10/03/state-watchdogs-band-together-to-take-on-dark-money/" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">10 states</a> announced the launch of a nationwide effort to encourage the disclosure of donors.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">But the settlement also highlights the limitations of investigations into who’s behind dark money groups: Instead of unmasking some reclusive billionaire or shy corporation, regulators often uncover yet another nonprofit, like a set of Russian nesting dolls. The original sources of the money spent in California were not publicly identified, nor will they be.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">“A number of donors did not want to be identified,” said Winuk, the enforcement chief for California’s campaign finance regulator, who received only a redacted list of donors for the original contributions.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">And while the groups have been linked to the Koch brothers, it’s not clear how exactly they’re connected. The Center to Protect Patient Rights, which operates out of a post office box in Arizona and doesn’t even have a website, has been described practically like an <a href="http://www.huffingtonpost.com/2013/10/02/sean-noble-koch-brothers_n_4017578.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">ATM machine</a> for various groups affiliated with the Koch brothers. The <a href="https://www.propublica.org/documents/item/809466-arizona-press-release.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">press release</a>issued by California authorities says the Center and Americans for Responsible Leadership “operated as part of the ‘Koch Brothers Network’ of dark money political nonprofit corporations.”</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The Kochs have long been known for spending millions to influence elections behind the scenes, through a complex network of groups that critics have nicknamed <a href="http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">“the Kochtopus.”</a> The Kochs themselves have remained determinedly in the background. </p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">One link between these two groups and the Koch network is Sean Noble, a GOP strategist who runs two political consulting firms and is the sole employee of the Center to Protect Patient Rights, which was launched in 2009. In 2010, he spoke on a panel at a Koch brothers’ secretive retreat, small semiannual affairs that are invitation-only and closed to the media. In <a href="http://www.opensecrets.org/news/2012/12/center-to-protect-patient-rights-ga.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">2010 and 2011</a>, the Center to Protect Patient Rights handed out almost $60 million to conservative groups that spent tens of millions on election ads. The Huffington Post recently quoted a GOP operative describing Noble as “<a href="http://www.huffingtonpost.com/2013/10/02/sean-noble-koch-brothers_n_4017578.html" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">the wizard</a> behind the screen” for the Koch network’s election efforts in 2012.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Noble did not return a call for comment.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Another link is <a href="http://www.politico.com/story/2013/09/behind-the-curtain-exclusive-the-koch-brothers-secret-bank-96669.html." style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">Wayne Gable</a>, a former top official at Koch Industries who has also served in leadership roles in several nonprofits formed by the Kochs. In 2011, Gable launched a new trade association that gave almost $115 million to the Center to Protect Patient Rights over the following year. It’s not yet clear how the Center doled out its money, as its tax return for 2012 isn’t yet available.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The leader of Americans for Responsible Leadership has close ties to Noble. Republican Kirk Adams hired Noble’s firm in 2011 and 2012 to help run his failed campaign to replace outgoing U.S. Rep. Jeff Flake in Arizona. Adams lost in the primary in August 2012; the next month, he was named president of Americans for Responsible Leadership.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">According to the settlement, some $24.5 million of the money distributed by the Center to Protect Patient Rights was raised by GOP strategist <a href="http://www.businesswire.com/news/home/20120301006742/en/GOP-Leaders-Launch-2012-California-Republican-National" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">Tony Russo</a> for another organization, Americans for Job Security, a Virginia-based trade association. (Russo didn’t return calls for comment.)</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Americans for Job Security gave the money to the Center to Protect Patient Rights. Then the Center gave about <a href="https://www.propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag.html#document/p10/a128058" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">$7 million</a> to the Iowa dark money powerhouse American Future Fund on Sept. 11, 2012; of that, the American Future Fund gave about $4 million to a new California committee, the <a href="http://www.mercurynews.com/elections/ci_21796431/shadowy-arizona-group-inserts-itself-into-california-campaigns" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">California Future Fund for Free Markets</a>, which supported the anti-union measure. That committee has since closed down.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The Center also gave <a href="https://www.propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag.html#document/p10/a128057" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">$18 million</a> to Americans for Responsible Leadership in October 2012, recommending that the group “should use the funds to support common social interests, including support” for the Small Business Action Committee PAC, a committee that Russo was also raising money for, the settlement said. Americans for Responsible Leadership then gave $11 million to the Small Business Action Committee PAC to spend on the two ballot proposals.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">That $11 million contribution sparked a <a href="http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=8410969" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: transparent; color: rgb(34, 98, 204); text-decoration: none;">complaint</a>, an investigation and a court battle. Just before the election, Americans for Responsible Leadership admitted that it got its money from the Center to Protect Patient Rights, which in turn got the money from Americans for Job Security.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The fine is the largest in California history in a campaign-finance case.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The manner in which the groups paid it speaks volumes about how dark their money really is.</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">They paid by cashier’s check, sent by a Sacramento lawyer’s office Thursday morning, betraying no clue to the money’s origin. </p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">---</p><p style="margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; font-size: 16px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">dff art?</p><p>=</p><p>kim b propub:</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Noble’s prime position in the Koch network took a hit at the end of the 2012 campaign, when he and the Center circumvented California election laws in an attempt to influence two state ballot measures.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Noble first met <b><font color="#ff0000">California political strategist Tony Russo</font></b> in Las Vegas in <a href="https://propublica.org/documents/item/810101-anthony-russo-interview.html#document/p6/a128415" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">October 2011</a>, according to a recorded interview Russo later gave to California investigators. Russo wanted Koch money for an effort to fight unions. Noble agreed to help, paying <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview.html#document/p39/a128442" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">hundreds of thousands</a> of dollars to run <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview.html#document/p34/a128439" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">focus groups</a>, develop ads and reach out to voters, Russo said.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Russo hoped the Koch network would do even more. Russo later said he and Noble spoke more than <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview.html#document/p16/a128431" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">18 times</a> in the run-up to the election, meeting once in <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview#document/p15/a128429" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">Washington</a>.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Meanwhile, Russo and <b>Jeff Miller, another California consultant</b>, raised $29 million from about 150 confidential donors to fight a proposition to raise taxes and to support another one limiting unions’ political power. They transferred the money to a Virginia-based trade association that had agreed to spend it on ads related to the initiatives. <b>But as Election Day drew closer, the association, Americans for Job Security, balked <a href="https://propublica.org/documents/item/810101-anthony-russo-interview.html#document/p32/a128438" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">at buying ads</a>, worried that under California law, it would be required to <a href="https://www.documentcloud.org/documents/810104-stephen-demaura-interview.html#document/p54/a128840" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">disclose</a> who had donated the funds for them.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Russo said he approached <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview.html#document/p38/a128440" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">Noble</a> and offered to transfer money from the Virginia group to the Center. In return, he asked Noble to tap separate resources to help in <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview.html#document/p40/a144784" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">California</a>. Noble thought he had <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview#document/p40/a128443" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">groups</a> that could help, Russo recalled.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>“He said, you know, get me your money,” Russo said in his interview.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>Americans for Job Security transferred about $4 million to the Center on <a href="https://propublica.org/documents/item/810107-updated-ajs-demaura-documents.html#document/p7/a128762" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">Sept. 10</a>. On Sept. 13, American Future Fund gave about $4 million to a California affiliate, the California Future Fund for Free Markets, which was spending money on the anti-union proposition.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Americans for Job Security sent another <a href="https://www.documentcloud.org/documents/810107-updated-ajs-demaura-documents#document/p2/a128756" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">$14 million</a> to the Center on Oct. 11. The Center then gave <a href="https://propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag#document/p10/a128057" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">most</a> of that money to Americans for Responsible Leadership, run by Kirk Adams, a friend and former client of Noble’s. On Oct. 15, Americans for Responsible Leadership sent $11 million to the Small Business Action Committee, a PAC spending on the initiatives.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Within days, a good governance <a href="http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=8410969" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">group</a> demanded a state inquiry into the contribution.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Still, Americans for Job Security gave another $6.5 million to the Center on <a href="https://propublica.org/documents/item/810107-updated-ajs-demaura-documents#document/p3/a128757" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">Oct. 22</a>. But no additional money from Koch-funded groups flowed back into the California initiatives fight – at Noble’s direction, Russo said.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>California had launched an investigation.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>“The <a href="https://propublica.org/documents/item/810101-anthony-russo-interview#document/p77/a144783" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">explanation</a> was, your regulatory guys are going crazy and I just don’t think we can do it,” Russo said.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>California’s Fair Political Practices Commission <a href="http://www.reuters.com/article/2012/10/26/usa-campaign-finance-california-idUSL1E8LQ0FV20121026" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">sued</a> Americans for Responsible Leadership on Oct. 25, 2012, seeking to force the group to reveal its donors. Six days later, a Sacramento Superior Court judge ordered that the group turn over the records to the state for an audit, saying that voters could suffer <a href="http://www.kpbs.org/news/2012/nov/01/legal-fight-continues-arizona-groups-contributions/" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">“irreparable harm” </a> if they didn’t know who was behind the group before the election. Americans for Responsible Leadership appealed. The case made its way to the California Supreme Court, which on Nov. 4 unanimously ordered Americans for Responsible Leadership to <a href="http://articles.latimes.com/2012/nov/05/local/la-me-secret-donors-20121105" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">turn over its records</a>.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;"><b>The next day, just before the election, Noble and Adams sent letters to the Small Business Action Committee as part of a settlement with regulators<a href="https://propublica.org/documents/item/811828-letters-on-intermediary-contributions.html" style="text-decoration: none; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">, admitting</a> they had funneled money from Americans for Job Security to the Small Business Action Committee.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">The state then accused the groups of <a href="http://www.fppc.ca.gov/index.php?id=346" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">money laundering</a> based on their efforts to disguise the original source of the $11 million transferred to the Small Business Action Committee in October.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">In his interview with investigators, Russo said he was <a href="https://www.documentcloud.org/documents/810101-anthony-russo-interview#document/p84/a128735" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">“shocked”</a> by the admission from Noble, because he believed that the money came from a pool of money unrelated to the funds Americans for Job Security passed to the Center.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Miller said he felt “just completely <a href="https://propublica.org/documents/item/810103-jeff-miller-interview#document/p95/a128949" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">screwed</a>” by Noble’s admission.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">“I’m not sure how their network works, to be <a href="https://propublica.org/documents/item/810103-jeff-miller-interview#document/p97/a128986" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">perfectly frank</a>,” Miller later told investigators in a recorded interview. “But when he, when he started to get in the shit storm, he panicked and lied to you all about how it was done to protect his organizations. That’s what I think happened. I don’t know that, though. That’s what I think happened.<b> I think that he panicked and to prevent your agency from opening up his books, he made, he lied.”</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">In total, the Virginia trade association had sent $24.5 million to the Center. Only $15 million ended up going to California for the propositions, which conservatives ended up losing by a large margin.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; line-height: 1.4; font-family: Georgia, serif;"><span style="background-color: rgb(255, 255, 102);">State regulators eventually <a href="http://www.propublica.org/article/dark-money-groups-pay-1-million-dollars-in-fines-in-california-case" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline;">slapped Americans for Responsible Leadership and the Center with a record fine</a>, $1 million.</span></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Individual donors to the effort were<b> never disclosed, although the redaction was so poor, it was possible to determine that they included financier Charles Schwab, California philanthropist Eli Broad and Gap Chairman Bob Fisher, but not the Kochs or their companies.</b></p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Initially, it appeared that the California Attorney General’s office might open a criminal investigation into the donations. But the investigation never moved forward; Noble was never interviewed in the case.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">As part of an agreement with the state, Adams and Noble were able to write off the $11 million transferred through their organizations to the Small Business Action Committee as a simple mistake. The failure to disclose the original source of the funds “was inadvertent, or at worst negligent,” their <a href="https://propublica.org/documents/item/809469-arl-cppr-stipulation-final-with-ag" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">stipulation</a> with California’s attorney general and campaign finance regulators said.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">Yet Noble and the lawyers he worked with were hardly new to campaign finance. Attorneys at <font color="#ff0000">Holtzman Vogel Josefiak</font>, based on the East Coast, were national experts in dark money groups and election law, representing everyone from Crossroads GPS to the American Future Fund.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">A lawyer and a paralegal there had helped incorporate two of Noble’s consulting firms and several Koch-connected social-welfare nonprofits, as well as handling the Center’s application for tax-exempt status to the IRS. Another Holtzman Vogel lawyer had even helped incorporate and dissolve the California Future Fund for Free Markets, the nonprofit that spent money on the anti-union measure.</p><p style="font-size: 16px; margin: 0px 0px 10px; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline; background-color: rgb(255, 255, 255); line-height: 1.4; font-family: Georgia, serif;">“I would assume, given the high skill level at Holtzman Vogel, that their lawyers were familiar with California’s campaign finance law requirements,” said Paul S. Ryan, senior counsel at the <a href="http://www.campaignlegalcenter.org/index.php?option=com_content&view=article&id=50&Itemid=64" style="text-decoration: none; font-weight: bold; color: rgb(34, 98, 204); outline: 0px; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; background-color: transparent;">Campaign Legal Center</a> in Washington. “They’re good lawyers.”</p></div><div>
</div><div>=
Campaign 2012
Revealing Dark Money and Big Data
Controversial Dark Money Group Among Five That Told IRS They Would Stay Out of Politics, Then Didn’t
Jan. 4: This post has been updated.
Five conservative dark money groups active in 2012 elections previously told tax regulators that they would not engage in politics, filings obtained from the IRS show
The best known and most controversial of the groups is Americans for Responsible Leadership, an Arizona-based organization. Not long after filing an application to the IRS pledging — under penalty of perjury — that it would not attempt to sway elections, the group spent more than $5.2 million, mainly to support Republican presidential candidate Mitt Romney.
The California Fair Political Practices Commission has accused Americans for Responsible Leadership of "campaign money laundering" for failing to disclose the origin of $11 million it funneled to a group trying to influence two state ballot propositions.
The other groups that filed applications for IRS recognition of tax-exempt status saying they wouldn't engage in politics are Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now.
Much hangs on these applications, all of which are still pending. The tax code allows social welfare nonprofits to engage in political activities as long as public welfare, not politics, is their primary purpose. If the IRS ultimately decides not to recognize these groups, they could have to disclose their donors.
Such decisions, along with IRS' oversight of social welfare nonprofits overall, have come under increasing scrutiny as these groups have assumed an ever larger role in elections, pouring an unprecedented $322 million into the 2012 cycle.
ProPublica has documented how some social welfare nonprofits underreport their political activities, characterizing them to the IRS as "education" or "issue advocacy." Other groups have popped up, spent money on elections and then folded before tax regulators could catch up with them.
The IRS sent the applications submitted by the five groups to ProPublica in response to a public records request, although the agency is only required to supply these records after groups are recognized as tax-exempt. (ProPublica also obtained the pending application of Crossroads GPS, the dark money group launched by GOP strategist Karl Rove that spent more than $70 million on the 2012 elections, which we wrote about separately.)
The IRS confirmed that none of the groups had been recognized as tax-exempt and referred ProPublica to its earlier response about Crossroads' application. In that email, the IRS cited a law that says publishing unauthorized tax returns or return information is a felony punishable by up to five years in prison or a fine of up to $5,000, or both.
A lawyer for Americans for Responsible Leadership, Jason Torchinsky, cited the same law in an email.
"If you willfully to (sic) print or publish in any manner any information about Americans for Responsible Leadership that you do not lawfully possess — and which may or may not be complete — you will be doing so in violation of (the law) and we will not hesitate to report such unlawful publication to the appropriate law enforcement officials," Torchinsky wrote.
The other groups for which ProPublica obtained IRS applications did not respond to calls or emails for comment.
ProPublica has published the applications of all five groups, but redacted parts to omit financial information.
"As we said when we published our story on the Crossroads application, ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication," said Richard Tofel, ProPublica's president.
Social welfare nonprofits do not need IRS recognition, though most opt to apply for it. They can operate, and spend money on politics, while their applications are under consideration.
Americans for Responsible Leadership incorporated in Arizona in July 2011 and applied for IRS recognition last September.
By that time, the group had already spent $5,300 on get-out-the-vote efforts for Sen. Orrin Hatch, R-Utah, and given $57,500 to two Republican political committees in Arizona.
Nonetheless, its IRS application said the group hadn't spent any money to influence elections, nor would it. It also said the group planned to split its efforts between influencing policy and educating the public, in part by "promoting a more ethical and transparent government."
According to Federal Election Commission filings, the group spent more than $5.2 million on campaign activities in October and early November, mostly on phone calls urging the defeat of President Barack Obama. In addition to the millions it pumped into California ballot measures, the group also spent $1.5 million on two Arizona propositions.
While the IRS doesn't classify spending on ballot measures as political, California election authorities do.
When ProPublica read the group's description of its activities on its IRS application to Ann Ravel, the chairwoman of the California Fair Political Practices Commission, she laughed.
"Wow," she said, upon hearing that the group said it would not try to influence elections. "That's simply false."
The California commission pressed Americans for Responsible Leadership to identify who contributed the funds it aimed at the California ballot measures, a battle that reached the state Supreme Court. Just before Election Day, the court ordered the group to reveal its donors.
So, who were they? Another Arizona social welfare nonprofit, which got its money from a Virginia trade association, which also didn't have to report its donors. California regulators are still trying to peel back the group's layers, to see who's behind the money.
Update (Jan. 4): In a Jan. 2 email to the editor at the Arizona Capitol Times, Jason Torchinsky, an attorney for Americans for Responsible Leadership, said the group had submitted an amended application for recognition of tax-exempt status to the IRS that "corrected the error that was the central feature" of ProPublica's story.
Contacted by ProPublica, Torchinsky said he could not confirm that this was accurate without his client's authorization. Torchinsky also would not say when the group submitted the amended filing, or what was changed.
ProPublica has requested that Americans for Responsible Leadership provide us with the corrected application or give the IRS permission to do so. So far, we have not received a reply.
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<h2><a href="http://www.thenation.com/blog/171055/could-attorney-general-kamala-harris-turn-tide-dark-money" title="Could Attorney General Kamala Harris Turn the Tide on Dark Money? ">Could Attorney General Kamala Harris Turn the Tide on Dark Money?</a></h2>
<div class="byline"><a href="http://www.thenation.com/authors/lee-fang">Lee Fang</a> <span class="timestamp"><abbr class="published" title="2012-11-05T22:50:05-18000">on November 5, 2012 - 10:50 PM ET</abbr></span></div>
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<p>A major misstep by a conservative nonprofit has led to a dramatic
turn of events in the Golden State. In what was first a case of a
mysterious Arizona group laundering political money for two key ballot
initiatives in California, the scandal may quickly evolve into a
criminal investigation that could rock the foundations of Capitol Hill
by unmasking the most prominent dark money slush fund in the country.</p>
<p>
It’s all up to Kamala Harris, California’s attorney general, who was
elected two years ago on a platform of getting tough on white-collar
crime. Her office told <a href="http://blogs.sacbee.com/capitolalertlatest/2012/11/fppc-accuses-arizona-nonprofit-of-money-laundering.html" target="_blank">reporters</a> today that she is laying out the options for either a criminal or civil investigation into this major secret money group.
First, some background:</p>
<p>
<b>• On October 15, a mysterious nonprofit in Arizona called Americans for Responsible Leadership </b><a href="https://s3.amazonaws.com/s3.documentcloud.org/documents/496604/col-money-arl-response.pdf" target="_blank"><b>cut</b></a><b>
a stunning $11 million donation to a committee in California dedicated
to defeating Prop 30 (a ballot initiative to raise taxes to fund the
budget) and passing Prop 32 (an anti-union effort to ban payroll
deductions), but didn’t disclose where that money came from. The move
violated a brand new rule in California mandating that even 501(c)
nonprofits disclose the source of their donations.</b></p>
<p>
• Three days later, on October 18, Common Cause, a government
watchdog, filed a complaint with the California Fair Political Practices
Commission asking for an inquiry. The commission, a state campaign
finance regulator that puts the Federal Election Commission to shame
with its aggressive pursuit of the public interest, took up the case and
on October 25, advised Americans for Responsible Leadership that it had
<a href="https://s3.amazonaws.com/s3.documentcloud.org/documents/496604/col-money-arl-response.pdf" target="_blank">25 hours</a> to comply with a request for information about the source of that $11 million check.
• Americans for Responsible Leadership hired Holtzman Vogel, a
DC-area law firm retained for years by Karl Rove and other Republican
leaders, to try to quash the FPPC’s requests, claiming at one point to a
local judge that the Supreme Court’s <em>Citizens United</em> decision protected the group from having to disclose its donors. As the Sacramento judge <a href="http://www.mercurynews.com/california-budget/ci_21899632/attorney-arizona-group-accuses-california-watchdog-group-trying" target="_blank">accurately</a> observed, the <em>Citizens United</em> decision did no such thing.
• In a surprise last week, an appellate judge, without comment,
agreed with the Arizona group in preventing the FPPC from action. This
forced a late minute <a href="http://www.contracostatimes.com/elections/ci_21915313/state-court-appeal-sides-shadowy-arizona-group-and" target="_blank">appeal</a> that led to an emergency decision by the California Supreme Court, which ruled 7-0 on Sunday to force disclosure.
And that brings us to the revelation this morning that Americans for Responsible Leadership received the <a href="http://www.sbsun.com/elections/ci_21932215/fppc-releases-names-donors-who-made-secret-11" target="_blank">$11 million from</a>
Americans for Job Security, a trade association based in Virginia.
Americans for Job Security, founded by two Republican operatives who now
handle media-buys for Karl Rove’s American Crossroads Super PAC, is
just another coin-operated front group. In the past, corporations have
given it large sums in exchange for negative advertising in campaigns
and lobbying efforts.
In the letter to regulators, Americans for Responsible Leadership
conceded that Americans for Job Security in turn received the $11
million from yet another nonprofit, this one called Center to Protect
Patients’ Rights.
The FPPC’s chair, Ann Ravel, says the trail of dummy nonprofits is a
clear sign that the Arizona nonprofit behind the $11 million donation
was <a href="http://blogs.kqed.org/election2012/2012/11/05/state-watchdog-agency-accuses-arizona-group-of-money-laundering/?utm_source=rss&utm_medium=rss&utm_campaign=state-watchdog-agency-accuses-arizona-group-of-money-laundering" target="_blank">engaged</a>
in “campaign money laundering.” It’s obvious to anyone that Americans
for Responsible Leadership is still playing shell games. The two
nonprofits it disclosed do not give any real information about the
individuals or corporations that provided the money for the $11 million
check.
Here’s why this now gets very interesting.
As I reported <a href="http://www.republicreport.org/2012/55million-koch-fronts/" target="_blank">exclusively in May</a>,
the Center to Protect Patients’ Rights—the group that is, at this
point, the closest thing we know about the origin of the $11 million in
California—is the hub for billionaire donors to funnel cash to attack ad
campaigns across the country. Sean Noble, the president of the group,
is a key deputy to the Koch brothers’ political machine. He helps run
weekly meetings with other Republican Super PACs to coordinate spending.
As head of the Center to Protect Patients’ Rights, he doles out checks
to various nonprofits that in turn use that money to pummel Democrats
with negative advertising.
Noble’s strategy centers on brand marketing. To appeal to Catholic voters, his group will cut a <a href="http://www.republicreport.org/2012/55million-koch-fronts/" target="_blank">check</a>
to a right-wing religious nonprofit, like the Susan B. Anthony List, to
run ads accusing Democrats of supporting abortion. To make an appeal to
elderly voters, the Center <a href="http://www.republicreport.org/2012/55million-koch-fronts/" target="_blank">finances</a>
a nonprofit called the 60 Plus Association to run ads accusing
Democrats of cutting Medicare. The list goes on, from organizations
dedicated to scare tactics against Muslim Americans to Tea Party groups,
Noble has channeled billionaire cash to a stunning array of different
fronts that then air nasty negative ads during elections. The public
only sees the brand at the end of the commercial, but never the true
source of the money. Quirks in nonprofit law allow even the most modest
forms of disclosure—the transfers from one group to the next—to be kept
secret until over a year after the election. That’s why we learned about
the transfers during the midterm elections only this year.
Noble’s group completely altered the shape of Congress. During the
2010 election cycle, Noble’ group funneled some $55 million, which in
conjunction with the US Chamber of Commerce’s $75 million, lifted House
Republicans into the majority, radically shifting the balance of power
in Washington, DC. This year, it’s pretty clear that shadow money groups
active in federal elections across the country are again depending on
this pool of untraceable money.
The right-wing billionaire clique, rumored to be the same <a href="http://thinkprogress.org/politics/2010/10/20/124642/beck-koch-chamber-meeting/" target="blank">group of tycoons</a> who attend the <a href="http://www.republicreport.org/2012/koch-meeting-indian-wells/" target="blank">posh Koch strategy conferences</a>, is obessed with secrecy. They were quick to <a href="http://www.republicreport.org/2012/koch-meeting-indian-wells/" target="_blank">kick me out</a>
of one of their confabs earlier this year, and have used every legal
instrument available to prevent their names from being revealed.
Accordingly, Center for Protecting Patients’ Rights pushes the limits of
campaign finance law, but rarely violates it.
Even in California, a nonprofit can avoid disclosure laws by claiming to only support issue advocacy.
That’s where the operatives messed up. The $11 million they financed in California went to an <a href="http://www.foxandhoundsdaily.com/2012/10/the-11-million-gift-to-jerry-brown/" target="_blank">explicit campaign committee</a>,
voiding any argument that the donation was in pursuit of an “issue”
rather than a political campaign. There’s no grey area here; the money
was part of a campaign donation, and its true donors, meaning the people
behind the Center to Protect Patients’ Rights, must be disclosed.
Kamala Harris seems determined to pursue a criminal investigation. But will she?
The growing scandal resembles another eleventh-hour Koch campaign
effort. In 1996, a resurgent Clinton administration came close to
helping Democrats retake the House of Representatives. In the closing
days of the 1996 election, a nonprofit group called Triad Management
helped two other nonprofits air <a href="http://www.publicintegrity.org/2004/07/15/5967/kochs-low-profile-belies-political-power" target="_blank">$3 million</a> in television ads in twenty-six House races and three Senate races. The money saved Speaker Newt Gingrich’s majority.
A subsequent <a href="http://www.gpo.gov/fdsys/pkg/CRPT-105srpt167/pdf/CRPT-105srpt167-pt5.pdf" target="blank">investigation</a> <a href="http://www.publicintegrity.org/2004/07/15/5967/kochs-low-profile-belies-political-power" target="blank">found</a>
that more than half of the Triad money came from an organization funded
by David and Charles Koch, and that the money was spent
disproportionately in areas where Koch Industries owned refineries and
pipelines. The investigation also <a href="http://www.publicintegrity.org/2004/07/15/5967/kochs-low-profile-belies-political-power" target="_blank">found</a> that Koch Industries provided direct corporate money for the ads, an apparent violation of campaign finance law at the time.
At the time of the Senate investigation, Koch Industries had been building up its lobbying muscle to <a href="http://thinkprogress.org/politics/2010/09/21/119973/koch-mike-pompeo/" target="_blank">combat charges</a> relating to over 300 oil spills caused by the corporation in the mid nineties.
Just as <em>The Wall Street Journal</em> reported on many
Triad-related documents, Koch received help from its allies in DC. In
October of 1997, Senator Fred Thompson (R-TN)—then, the chair of the
Senate Government Affairs Committee—moved to cancel hearings into the
investigation.
Today, the dynamics are different, but the core issue is the same. A
Koch-group was caught violating the law, and there’s a chance to uncover
the truth about one of the biggest secret money efforts in American
history. It’s likely that Koch and these billionaires will do anything
it takes to prevent this current scandal from growing.
Attorney General Harris will decide whether or not to pursue an
investigation into the $11 million donation. The result of the effort
may reveal who really purchased Congress for the last two years, and the
next two.
<em>Katrina vanden Heuvel recently made the case against dark money on MSNBC's Up with Chris Hayes. Watch <a href="http://www.thenation.com/blog/171026/katrina-vanden-heuvel-dark-money-drowns-out-voice-people" target="_blank">here</a></em>.</p>
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<div class="related-terms">Related Topics: <a href="http://www.thenation.com/section/campaign-finance">Campaign Finance</a> | <a href="http://www.thenation.com/section/election-2012">Election 2012</a> | <a href="http://www.thenation.com/section/politics">Politics</a></div>
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<p> </p>
<p>
<a href="http://www.thenation.com/blog/171055/could-attorney-general-kamala-harris-turn-tide-dark-money">http://www.thenation.com/blog/171055/could-attorney-general-kamala-harris-turn-tide-dark-money</a></p>
<p>
june 12 election:
</p>
<h1 id="articleTitle" class="articleTitle entry-title">debate over campaign regulation</h1>
<div id="articleByline" class="articleByline">
<p class="Byline">Mercury News Editorial</p>
</div>
<div id="articleDate" class="articleDate">Posted: 06/05/2012 12:35:49 PM PDT</div>
<p class="editorialbodytext">Supporters and opponents of campaign
finance reform usually agree that sunshine is important. But supporters
say disclosure should be the starting point for regulation, while
opponents say just reporting donations is enough.
This debate goes on but court rulings have made most regulation
beyond requiring disclosure all but impossible. And a report on campaign
donors by the Center for Investigative Reporting's California Watch
only illuminates the problem.
In state elections over the past 11 years, the top 50 individual
donors and the top 50 group contributors combined spent $1.25 billion to
sway lawmakers and voters, says California Watch. That's about
one-third of the political contributions in that</p>
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