This is the first story in an exclusive series about the funding behind politically active nonprofit organizations that do not publicly disclose their donors.
Several nonprofit organizations that don't disclose their donors but have been deeply involved in partisan politics during the last several years have received multimillion-dollar contributions from groups that are familiar players in Republican circles.
Several nonprofit organizations that don't disclose their donors but have been deeply involved in partisan politics during the last several years have received multimillion-dollar contributions from groups that are familiar players in Republican circles.
The GOP nonprofits -- American Action Network, which spent $26 million on ads in the 2010 mid-term elections; Crossroads GPS, which spent $16 million; and the American Future Fund, which laid out $9.6 million -- are all organized under section 501(c)(4) of the Internal Revenue Code. They and the individuals who run them have strong ties to some of the same political networks, research by OpenSecrets Blog shows.
One of the previously unreported donor groups, according to forms filed by nonprofit groups with the Internal Revenue Service, is the Republican Jewish Coalition, which gave $4 million in 2010 to Crossroads GPS -- perhaps the most well-known of the outside spending groups that were running ads in the 2010 cycle, with ties to GOP strategist Karl Rove.
Crossroads GPS launched several ads critical of President Obama as well as of Missouri Democratic Sen. Claire McCaskill just this month. In December, it spent $1.1 million spent on ads eviscerating four Democratic Senate candidates, including McCaskill and two other incumbents. The super PAC American Crossroads -- of which Crossroads GPS is an offshoot with a different corporate form -- has raised more than $23 million in this cycle and has said it plans a major ad barrage against Obama.
RJC also shares two board members with American Action: Fred Malek, a former Nixon administration official, and former GOP Sen. Norm Coleman, who is American Action's board chairman.
For all the talk about super PACs this election season -- their influence in keeping some candidates afloat, their ability to accept unlimited contributions from almost any source, the handful of millionaires and billionaires who are their primary funders -- they are not at the top of transparency advocates' list of horrors. That's because super PACs have to disclose their donors to the public.
But 501(c)(4) groups can keep their donors hidden from public view, leaving voters in the dark about who is behind them and the millions they spend on advertisements promoting or attacking candidates. While they are supposed to function as social welfare groups, they can get involved in politics as long as they limit their political activity to less than half of their operations. But "social welfare" is loosely defined, and the groups have thus far escaped much scrutiny by the IRS.
The chart below shows 2010 donations to Crossroads GPS, American Action Network and the American Future Fund from RJC and two other groups that reported grants to the 501(c)(4)s in their IRS form 990 filings. Groups have not yet filed returns showing 2011 activity.
| Organization | Crossroads GPS | American Action Network | American Future Fund | Total |
|---|---|---|---|---|
| Republican Jewish Coalition | $4,000,000 | $4,000,000 | $0 | $8,000,000 |
| PhRMA | $0 | $4,500,000 | $300,000 | $4,800,000 |
| American Justice Partnership | $0 | $0 | $2,400,000 | $2,400,000 |
Jim Joseph, a tax partner at the law firm Arnold & Porter, noted that the identities of individuals and corporations who donate to the 501(c)(4) groups such as Crossroads GPS are still a mystery; those donors file tax returns that don't require them to disclose such contributions publicly. However, the forms filed by nonprofits, such as RJC, who give to the groups require them to list the grants.
And the information can be revealing. The board of RJC is loaded with major Republican donors -- figures such as Las Vegas casino owner Sheldon Adelson, who, with his wife, gave $10 million in January to Winning Our Future, the super PAC supporting Newt Gingrich in the race for the GOP presidential nomination. Hedge fund executive Paul Singer gave $1 million to the super PAC that's played a key role in Mitt Romney's bid for the White House, Restore Our Future, while RJC's chairman, David Flaum, has given $100,000 to the same group. Yet another board member Lewis Eisenberg, an adviser to private equity firm Kohlberg Kravis Roberts, has donated $25,000 to Restore Our Future. Lobbyist Wayne Berman, who also sits on RJC's board, has bundled $358,000 for Romney's campaign this cycle.
The mission statement of RJC -- which is itself a (c)(4) group and can thus keep its donors' names private -- says that it is "committed to building a strong, effective and respected Jewish Republican voice in Washington and across the country."
RJC itself spent $24,000 attacking Democrat David Weprin in a special election in New York's 9th congressional district last year. The Republican, Bob Turner, won the seat in an upset. Several days ago, it began airing an ad critical of President Obama's Israel policy. Tag line: "Call President Obama. Tell him not to slash funding for Israel's missile defense."
American Action Network also received a $4.5 million grant in 2010 from PhRMA, the brand-name pharmaceutical makers' trade group, IRS forms indicate, and PhRMA gave another $300,000 to the American Future Fund. The latter group continues to be very active, announcing a new anti-Obama ad today that it says it will spend $4 million to air in nine states.
American Future Fund also received a 2010 gift of $2.4 million from the American Justice Partnership, according to the IRS. AJP was established by the National Association of Manufacturers to "battle greedy trial lawyers' scam lawsuits and win legal reform fights in states all across the country," according to its website. Source
