Democrats Hate All “Dark Money,” Except the Millions They Raise

Who's winning, who's losing, and why.
Sept. 3 2014 5:01 AM

The Dark Arts

When Democrats aren’t complaining about the rise of “dark money” in this year’s election, they are raising it themselves.

Democratic Sen. Mark Pryor.
Democratic Sen. Mark Pryor is locked in a close race with Republican challenger Rep. Tom Cotton in Arkansas, where “dark money” is playing a role on both sides.

Photo by Win McNamee/Getty Images

Liberals may blame conservatives for the ongoing surge of political “dark money” dominating the 2014 midterm elections, but Democrats are now taking full advantage of these secretive, free-wielding political behemoths—while bemoaning their influence.

At the forefront is the nonprofit Patriot Majority USA, which is providing Democrats with a countervailing force against the political machine of conservative billionaires Charles and David Koch. This election cycle, Patriot Majority USA has spent more than $7 million on political advertisements, according to reports filed with the Federal Election Commission. That makes it the largest Democratic-aligned dark money operation in the country.

Every dollar has fueled negative messages that call for the defeat of Republican politicians, who are seeking to pick up six Senate seats in November to win control of Congress’ upper chamber and who have generally seen more support from dark money groups.

The union-backed Patriot Majority USA is led by a staunch ally of Senate Majority Leader Harry Reid, who has demonized the Koch brothers as “un-American” and railed against “hidden dark money which is corrupting our elections.”

The Senate races raging in Arkansas, Louisiana, and North Carolina are of particular interest to Patriot Majority USA, which has run more than 11,000 TV ads across the three states, according to a Center for Public Integrity review of data provided by Kantar Media/CMAG, an advertising tracking service. The group has accounted for about one out of every nine ads aired in the Arkansas Senate race, one of every eight in Louisiana, and one of every 13 in North Carolina. That approaches—though does not yet match—the number of ads aired by the Koch-backed Americans for Prosperity. “They want to spend their money in places where they think they can do some good,” said Charles Prysby, a political science professor at the University of North Carolina at Greensboro.

Unlike candidates, parties, and political action committees, nonprofits such as Patriot Majority USA and the Koch-funded Americans for Prosperity are not legally required to disclose their donors. But these nonprofits, frequently dubbed “dark money” groups, are allowed to fund advertising barrages that overtly call for the election or defeat of political candidates—or simply praise or criticize them. In Arkansas in particular, Patriot Majority USA has for months branded Rep. Tom Cotton, the GOP’s Senate nominee, as “a politician we just can’t trust” and criticized him for voting against the farm bill.

Arkansas Democratic Party spokesman Patrick Burgwinkle welcomes Patriot Majority USA’s participation. “Our side will be outspent in this race,” Burgwinkle said. “That’s why it’s important to have groups hold Congressman Cotton accountable to his reckless positions.”

A spokesman for Cotton did not respond to requests for comment, but the Republican has said he supported the farm bill but voted against it because Democrats included food stamp funding in the legislation. He argued the two issues should be voted upon separately, which won him praise from the conservative Club for Growth, which, at the time, said all lawmakers should vote against the “bloated proposal.”

By law, election-related expenditures cannot be the “primary purpose” of so-called social welfare nonprofits, such as Patriot Majority USA and Americans for Prosperity, which are organized under section 501(c)(4) of the U.S. tax code. However, thanks to the U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling in 2010, they are free to spend huge amounts of money advocating for the election or defeat of federal candidates. These nonprofits are also allowed to keep the identities of their donors secret, unless a contribution is meant to fund a particular ad—something that rarely happens.

Between January 2011 and December 2012, Patriot Majority USA raised roughly $26 million, according to tax records. The source of most of that money is not publicly known. But a Center for Public Integrity review of Department of Labor, FEC, and Internal Revenue Service filings shows that 13 contributors have combined to give Patriot Majority USA about $4.7 million since January 2011.

Among the newly identified contributors: the Partnership for Quality Home Healthcare ($500,000), the International Longshoremen’s Association PAC ($50,000), the American Health Care Association ($25,000), and the American Association for Justice PAC ($10,000).

Patriot Majority USA’s top known donor is the Alliance for Quality Nursing Home Care, which gave $1.25 million over two years. That health industry trade group—which last year merged with the American Health Care Association—was first identified as a contributor to Patriot Majority USA by the Center for Responsive Politics. Greg Crist, a spokesman for the American Health Care Association, declined to comment, saying, “As a general practice, we don’t comment on our political giving strategies.”

Patriot Majority USA has also collected seven-figure sums from at least two labor unions: $1.14 million from the Service Employees International Union, including $280,000 from the SEIU’s state council in Pennsylvania, and $1 million from the American Federation of State, County, and Municipal Employees. These large labor union contributions were first reported by the Huffington Post.

In all, federal records show that labor unions have donated at least $2.5 million to Patriot Majority USA since January 2011.

Craig Varoga, the president of Patriot Majority USA, declined to answer specific questions from the Center for Public Integrity, but ahead of the 2012 election, he issued a stark admonition in a column published in the trade magazine Campaigns & Elections about the post-Citizens United world. “It does not matter whether any of us agree or disagree with current campaign finance laws, or court interpretations and FEC rulings on these laws,” Varoga wrote. “This brave new world is here.” Earlier this year, he reiterated to the New York Times that his group would not “unilaterally disarm.”

And as to the issue of donor disclosure? In 2012, Varoga told the Huffington Post that the funders of his organization would not be “particularly surprising,” but, nevertheless, they would not be revealed.

Varoga himself is a veteran political strategist and longtime ally of Reid, the Senate’s top Democrat. During the early 1990s, Varoga served as Reid’s communications director, and in 2010, he led an independent group that helped Reid win re-election. He’s also worked on the presidential campaigns of Democrats Bill Clinton, Al Gore, and John Kerry, among others.

Patriot Majority USA’s other directors, according to tax documents, include political consultant Joe Householder, who once worked as Hillary Clinton’s communications director in the Senate, and Bill Burke, the former head of the Foundation for the Future, a Democratic-aligned group that was active in redistricting fights.

Casey Mann, executive director of the North Carolina Democratic Party, understands that her party faces a dilemma over dark money. On the one hand, Mann says it is “unfortunate” that liberal groups like Patriot Majority USA have entered the fray to help the state’s incumbent Democratic senator, Kay Hagan, “even if it is a reaction to the conservative dark money groups.” On the other, she says she is “grateful for their actions,” including Patriot Majority USA’s $1.7 million TV ad blitz slamming Republican candidate Thom Tillis. “These are the rules that are set before us,” she continued. “You have to actually win first … to get the kind of policies you want to see.”

Mike Brown, the chairman of the Benton County Democratic Party in Arkansas, agrees. There, Democratic Sen. Mark Pryor is locked in a close race with Cotton, his Republican challenger. “You lay out rules about what’s fair in a fight,” he said. “But if the other side starts doing it, you have to answer tit for tat.”

Nevertheless, both the Pryor and Hagan campaigns have repeatedly criticized the Koch brothers’ nonprofits for spending big in their Senate races. “We can’t let our Democratic Senate be bought,” pleaded one recent fundraising email from the Pryor campaign. “I would prefer our elections Koch-free,” wrote Hagan in a recent campaign email of her own. “You can’t buy a democracy. But Koch-backed groups are sure giving it a try.”

Ann Clemmer, a former Republican state lawmaker who now teaches political science at the University of Arkansas at Little Rock, says it’s “pretty disingenuous for Democrats to cry foul” about Republicans’ big-money allies “when there’s plenty of it on their side as well.” Nevertheless, she understands Democrats’ desire to fight back.

“You can’t let one side do it and not answer,” she said. “You don’t want to let charges go unanswered.”

This story was published by the Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

Michael Beckel is a politics reporter for the Center for Public Integrity, where his focus is super PACs and the influence of money on elections.

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