WASHINGTON -- A recent million-dollar settlement in California has stripped back the curtain on how "dark money" is secretly moved in and around electoral politics. Documents and interviews revealed how a networks of nonprofits passed dark money -- that is, money whose source is not disclosed to the public -- from one to another to another to further obscure the original sources.
Examples of similar financial transfers uncovered by The Huffington Post, in addition to a host of examples reported by the Center for Responsive Politics and NPR, demonstrate that the California case is no isolated incident.
Networks of nonprofits are being created across the country, at the national and state levels, to secretly fund candidate and ballot initiative campaigns, according to tax documents and campaign records accessed through Guidestar, CitizenAudit.org and the National Institute for Money in State Politics. Their tactics are similar to the schemes adopted by the global rich to hide their wealth -- except instead of avoiding tax collecting authorities, they're trying to skirt disclosure laws.
The best known of these networks are those tied to the billionaire Koch brothers. Linking the groups together are two dark money hubs: the Center to Protect Patient Rights, which doled out as much as $182.2 million to other dark money groups from 2010 through 2012, and Freedom Partners, which gave $236 million to other dark money groups, including $115 million to the Center to Protect Patient Rights.
But dark money networks have also grown at the state level. They played a notable role in the clashes over labor rights in Wisconsin and Ohio in 2011.
The Wisconsin battle erupted over a controversial budget bill, supported by Gov. Scott Walker (R) and passed in March 2011, that stripped public employees of their collective bargaining rights. An April vote for a state Supreme Court justice turned into a referendum on the legislation, and nine state senators were targeted in a recall election that August. Outside interest groups flooded these elections with millions of dollars, much of it spent on issue ads.
At the center of this effort were the Wisconsin Club for Growth, a spinoff of the national organization working to enforce conservative orthodoxy within the Republican Party, and the WMC Issues & Mobilization Committee, the political arm of the business trade group Wisconsin Manufacturers & Commerce. These two dark money groups not only spent money on their own issue ads, but also funded the activities of other nonprofits in the state.
In 2011, the Wisconsin Club for Growth gave $4.62 million to Citizens for a Strong America, which ran ads in two of the recall elections and in support of conservative incumbent Justice David Prosser. The only other contribution to Citizens for a Strong America that year totaled $25, making the organization merely a shell for Wisconsin Club for Growth cash. The "citizens" group has also been linked to staffers at the nonprofit Americans for Prosperity, the main political organization run by the Koch brothers.
Citizens for a Strong America, in turn, made big donations to two anti-abortion groups -- $916,045 to Wisconsin Family Action and $347,582 to Wisconsin Right to Life -- and to two gun rights groups -- $235,000 to United Sportsmen of Wisconsin and $77,908 to Safari Club International. All of these groups turned around and spent money on issue advertising in either the recall elections or the court race.
The $916,045 contribution to Wisconsin Family Action, which opposes gay marriage along with abortion, constituted 82 percent of its total moneys -- meaning that it too was almost entirely funded by the Wisconsin Club for Growth in 2011. As for Wisconsin Right to Life, the contribution from the Club for Growth spinoff that was funneled through Citizens for a Strong America constituted nearly half of its budget that year.
This dark-money shell game allowed the Wisconsin Club for Growth to influence the elections with both its own ads and those of seemingly unrelated conservative groups with different public agendas.
The one thing all these dark money nonprofits share is that they are not required by law to disclose their donors to the Federal Election Commission or any similar state agency. But they do report their own donations to the Internal Revenue Service. In other words, the trail of cash moving from dark money nonprofit to dark money nonprofit can be traced, in part, through public records of the groups contributing it.
Information available from the IRS on those contributing to the Wisconsin Club for Growth in 2011 turns up more links among dark money groups. These records showed a $225,000 contribution from the Center to Protect Patient Rights, $1.06 million from the Wisconsin Homeowners Alliance, $988,000 from the WMC Issues & Mobilization Committee, $227,500 from the Wisconsin Insurance Alliance, $140,000 from the Building Industry Council and $75,000 from the Jobs First Coalition. None of these groups reveal their donors.
A similar situation unfolded in Ohio, also in 2011, when the state's residents were asked to vote on a ballot initiative to decide the fate of Republican Gov. John Kasich's bill to strip public employees of collective bargaining rights.
The primary funding vehicle to support the anti-union measure was a dark money nonprofit called Building a Better Ohio, which transferred all its funds to a ballot initiative campaign of the same name. Corporations, unions and nonprofits have been able to contribute unlimited amounts to such campaigns since a Supreme Court decision in the 1980s.
More than half of the $12 million spent by the Building a Better Ohio campaign came from two other dark money nonprofits. Make Ohio Great, which was created by the Republican Governors Association solely for the ballot effort, contributed $1.55 million, and Ohioans to Protect Jobs gave $5.21 million. The only publicly known donor to Make Ohio Great was the Republican Governors Public Policy Committee, a dark money affiliate of the RGA that gave $2.85 million.
The Building a Better Ohio nonprofit did voluntarily release a list of donors but not the amounts given, leaving the public to guess its biggest funding sources.
The Wisconsin and Ohio cases, moreover, are only two high-profile examples of the endless layers obscuring dark money from the public's eye. In Arizona and Ohio, recent ballot initiative campaigns against health care reform were almost entirely funded by nonprofits, particularly those in the Kochs' orbit.
From 2009 to 2010, the Center to Protect Patient Rights, one of the main dark money hubs, gave $1.43 million to the U.S. Health Freedom Coalition and $275,000 to the Benjamin Rush League, another name for the U.S. Health Freedom Coalition, which turned around and gave $1.47 million to an Arizona ballot initiative campaign seeking to opt the state out of Obamacare's health insurance mandate. This was an effort endorsed by Americans for Prosperity, the Kochs' main political voice.
In 2011, Ohioans for Healthcare Freedom, campaigning for a ballot initiative identical to Arizona's, received nearly all of its funds from dark money groups. Donations included $198,438 from Ohio 2.0, $165,000 from Ohio Liberty Council and $100,000 from the U.S. Health Freedom Coalition -- three groups that all received substantial sums from the Center to Protect Patient Rights. The same year, the latter group gave $565,000 to Ohio 2.0, $210,000 to Ohio Liberty Council and $125,000 to the U.S. Health Freedom Coalition. The Center to Protect Patient Rights also gave $61,953 directly to the ballot campaign.
These dark money transfers are attracting more attention from other states' officials following the California case. Investigations exposed similar hide-the-source games in both Idaho and Kentucky.
Idaho Secretary of State Ben Ysura (R) forced Education Voters of Idaho to reveal the funders behind its efforts to pass a ballot initiative gutting collective bargaining rights for teachers. A court required the group to disclose its donors, which included New York City Mayor Michael Bloomberg and Wyoming investor Foster Friess. The Republican Governors Public Policy Committee also contributed $50,000.
In Kentucky, a conservative nonprofit called Restoring America was formed just months before the 2011 gubernatorial race and then funded a political committee of the same time, which ran ads attacking Democratic Gov. Steve Beshear. A court order forced those ads off the air until the group disclosed its donors. Terry Williams, the former father-in-law of Republican gubernatorial candidate David Williams, was revealed as the source of nearly all of Restoring America's funds.
An effort by Nevada Secretary of State Ross Miller (D) to force Americans for Prosperity to disclose its donors, however, was blocked in state courts last month.
Faced with this evidence of large sums of hidden cash moving into their realms -- and knowing the unlikelihood of any quick congressional action -- multiple states are looking to take more proactive steps. Election officials and watchdogs in Alaska, California, Idaho, Iowa, Maine, Maryland, Massachusetts, Montana, New York, New York City and Washington have banded together to form the States' Unified Network Center to collaborate on ways to prevent dark money from flooding future elections.
Also on HuffPost:
Then-Sen. John Ensign (R-Nev.) was a proponent of the Federal Marriage Amendment, which would have banned states from recognizing same-sex marriage. "Marriage is the cornerstone on which our society was founded," he argued on the Senate floor in 2004. He also called on President Bill Clinton to resign over the Monica Lewinsky scandal, <a href="http://www.huffingtonpost.com/2009/06/16/ensign-whacked-clinton-fo_n_216508.html">saying it had destroyed the president's credibility</a>. Yet in 2009, Ensign admitted that he had had an extramarital affair with a former campaign staffer who was also the wife of one of his top aides. An ethics investigation by the Senate Ethics Committee and the FBI followed, and<a href="http://www.huffingtonpost.com/2011/04/21/john-ensign-resigns-reports_n_852285.html"> Ensign resigned</a> in 2011.
Former House Speaker Newt Gingrich (R-Ga.) has a long and rich history of hypocrisy, including receiving a reported $1.6 million in consulting fees from Fannie Mae and Freddie Mac before blaming the mortgage giants for the country's housing crisis and <a href="http://www.businessinsider.com/newt-gingrich-endorses-obamacare-individual-mandate-audio-2012-1">endorsing President Barack Obama's health care plan</a> before the 2012 presidential primary campaign, during which he hammered Mitt Romney's Massachusetts plan for being similar to Obamacare. But his crowning hypocrisy was probably leading impeachment proceedings against President Bill Clinton in the 1990s over the Monica Lewinsky scandal while Gingrich himself was having an extramarital affair. His ex-wife Marianne recently claimed that while they were married, Newt <a href="http://www.huffingtonpost.com/2012/01/19/open-marriage-newt-gingrich-marianne-affair-_n_1217944.html">requested an "open marriage" </a>so that he could continue the affair with his now-wife, Callista.
Rep. Charlie Rangel (D-N.Y.) stepped down as chairman of the House Ways and Means Committee after <a href="http://www.huffingtonpost.com/2010/12/02/charles-rangel-censured-censure_n_791289.html">he was congressionally censured</a> for failing to pay income taxes and filing misleading financial statements, among other misdeeds. But that didn't stop him from hammering Mitt Romney for his lack of transparency on tax returns. "Before he judges other people about paying federal income taxes, Governor Romney should come clean about the tax returns he's hiding from voters," Rangel said.
The failed vice presidential candidate has been an outspoken opponent of earmark spending, but that didn't stop Rep. Paul Ryan (R-Wis.) from <a href="http://www.huffingtonpost.com/2012/10/27/paul-ryan-emails-stimulus_n_2027975.html">arranging a $735,000 earmark</a> to construct a transit center in his hometown of Janesville, Wis. Likewise, after slamming President Barack Obama's stimulus package, Ryan sought stimulus funds for several projects in his district.
Rep. Michele Bachmann (R-Minn.) was the original sponsor of legislation to repeal the Affordable Care Act, but her war against "socialized medicine" hasn't stopped husband Marcus from <a href="http://www.latimes.com/news/nationworld/nation/la-na-bachmann-20110626,0,7400031,print.story">applying for public funds</a> for his "pray away the gay" counseling practice. Bachmann, an outspoken opponent of big government, has also <a href="http://www.latimes.com/news/nationworld/nation/la-na-bachmann-20110626,0,7400031,print.story">personally benefited from federal farm subsidies</a>. She recently described the Internal Revenue Service, which earlier in her career employed her to sue people in tax collection cases, as <a href="http://thinkprogress.org/economy/2011/07/11/264991/bachmann-tax-collector-irs/">"the most heartless organization anyone knows of." </a>
House Speaker John Boehner (R-Ohio) has loudly congratulated himself for the GOP House jobs package -- even though economists say the package's 32 bills <a href="http://www.huffingtonpost.com/2012/07/24/republican-jobs-bills_n_1687647.html">will do little to create jobs</a> -- while working hard to block President Barack Obama’s $447 billion jobs plan. A longtime critic of wasteful government spending, Boehner (along with other House Republican leaders) <a href="http://www.huffingtonpost.com/2012/10/16/doma-house-republicans_n_1971666.html">spent $1.5 million</a> defending the Defense of Marriage Act.
He won an Oscar for "An Inconvenient Truth" and <a href="http://www.msnbc.msn.com/id/21262661/ns/us_news-environment/t/gore-un-climate-panel-win-nobel-peace-prize/#.UKqNy2mMF9Q">a Nobel Peace Prize</a> for his work on climate change, but Al Gore's own carbon footprint was once an inconvenient issue. His 20-room Nashville mansion and pool house in 2006 <a href="http://abcnews.go.com/Politics/GlobalWarming/story?id=2906888&page=1#.UKqO42mMF9Q">racked up $30,000 in utility bills</a>, consuming more than 20 times the national home average, according to a report by the Tennessee Center for Policy Research. A Gore spokesperson <a href="http://nashvillecitypaper.com/content/city-news/despite-home-upgrades-gore-still-%E2%80%98hypocrite%E2%80%99-energy-usage-group-says">disputed the conservative think tank's report</a> and said that renovations on the home cut its electricity and natural gas consumption about 40 percent by the next year.
Sen. Strom Thurmond (R-S.C.), a famed segregationist, spent many of his 48 years in the U.S. Senate fighting racial integration and equality, punctuated by his 24-hour filibuster in a failed attempt to kill the Civil Rights Act of 1957. Six months after Thurmond's death in 2003, a biracial woman named Essie Mae Washington-Williams revealed that the late senator was her father. Her mother was 16 and working for Thurmond’s parents when she became pregnant.
From his opposition to President Barack Obama's health care reform, which was patterned after his own plan in Massachusetts, to his politically expedient shifts in positions on immigration, climate change and abortion, Mitt Romney has a record of hypocrisy too expansive and well documented for any Etch A Sketch to erase.
During his time in office, former Rep. Mark Foley (R-Fla.) introduced a bill against child pornography, fought to expand federal sex offender laws, supported anti-gay legislation and chaired the House Caucus on Missing and Exploited Children. Then he was caught sending graphic sex messages to underage males working as congressional pages. He quickly resigned in 2006.
When Sen. David Vitter (R-La.) admitted his involvement in the "D.C. Madam" scandal in 2007, it didn’t end his career or lead to any criminal charges. It also didn't end his attempts to narrow prosecutorial discretion for others in vulnerable positions. At a hearing last year on the HALT Act, which would have suspended discretionary immigration protections, Rep. Zoe Lofgren (D-Calif.) <a href="http://www.nola.com/politics/index.ssf/2011/07/sen_david_vitter_called_hypocr.html">accused Vitter</a> of "hypocrisy to seek to limit the use of discretion when one has enjoyed the benefit himself." Vitter has also advocated for abstinence-only sex education and in 2004 ran on a "family values" platform that included opposition to same-sex marriage.
Sarah Palin has been an outspoken opponent of President Barack Obama's health care plan, but a more socialized system wasn't always so problematic for her. In 2010, she admitted to having taken <a href="http://www.huffingtonpost.com/2010/03/08/palin-crossed-border-for_n_490080.html"> trips across the Canadian border</a> to receive single-payer health care long before she brought "death panels" into the war against the Affordable Care Act.
Former Sen. Larry Craig (R-Idaho) is best known for his 2007 airport bathroom trip that ended in a same-sex-sting arrest for lewd conduct after he allegedly solicited sex from an undercover officer. Craig blamed his wandering foot on his "wide stance" but soon announced his resignation, then decided to serve out the rest of his term. While in office, he had supported the anti-gay marriage Federal Marriage Amendment and voted against a measure to include anti-gay bias in hate crimes legislation. He received a rating of zero from the Human Rights Campaign for his votes on LGBT issues. <em><strong>CORRECTION</strong>: A previous version of this slide implied that Craig followed through on his threat to resign.</em>
While serving as the Democratic governor of New York, Eliot Spitzer was brought down by a federal wiretap that revealed he patronized a $1,000-an-hour prostitute named Ashley Dupre at a Washington, D.C., hotel. Further investigation uncovered the prostitution ring Emperors Club VIP, and numerous money transfers to the club were traced back to Client 9 -- the governor. As New York state attorney general, Spitzer <a href="http://nymag.com/daily/intel/2008/03/report_governor_spitzer_involv.html">prosecuted at least two prostitution rings</a>, and as governor he forced state comptroller Alan Hevesi out of office for the comparatively minor offense of using a state car and chauffeur for his sick wife.
Rep. Scott DesJarlais (R-Tenn.) just won a second term despite <a href="http://www.huffingtonpost.com/2012/11/15/scott-desjarlais-approved_n_2140171.html">recent revelations</a> that he had sex with a patient while working as a physician and later urged her to get an abortion. Yet DesJarlais' campaign platform opposed abortion. "All life should be cherished and protected. We are pro-life," his website stated. There’s more. According to transcripts from his 2001 divorce proceedings, released after the election, the congressman and his then-wife made a "mutual" decision for her to have two abortions while they were married.