Back on 27 January 1998, on the very widely watched “Today Show” on US television, Hillary Clinton charged that a “vast right-wing conspiracy” was intent on destroying her husband’s presidency. Well, of course President Clinton was in the throes of one of his “bimbo eruptions” and the political fallout seemed poised to melt down his presidency. Afterwards, Hillary Clinton took more than her fair share of criticism – and some sharp ridicule – for her forceful comments. But since that time, right-wing political critics have upped their assault on Democrats and the left generally. Does Hillary Clinton’s lament deserve a second look now? With the information in a draft of a filing being submitted to the Internal Revenue Service (IRS) on behalf of a massive funding machine assembled by the brothers Koch to fight the corner of right-wing Republicans, was Hillary on to something big after all? J. BROOKS SPECTOR takes a closer look.
Last week, the widely followed Washington website Politico reported on the final draft of the IRS filing for Freedom Partners (the final version was due to be filed this week). Freedom Partners is a barely known non-profit organization that has very close ties to conservative billionaire brothers Charles and David Koch. The group put together a $256-million war chest, spending all but $20-million of it on behalf of conservative Republican political causes for the year ending 30 November 2012. That figure is bigger than the annual budgets of groups that have traditionally been the country’s largest advocacy groups, such as the National Rifle Association and the Chamber of Commerce.
Commenting on this document, Politico wrote: “The 38-page IRS filing amounts to the Rosetta Stone of the vast web of conservative groups – some prominent, some obscure – that spend time, money and resources to influence public debate, especially over Obamacare … meaning a totally unknown group was the largest sugar daddy for conservative groups in the last election.”
The filing shows that Freedom Partners spent more on conservative groups through to the 2012 election than any other single political action group, including the much better known American Crossroads and Crossroads GPS, both run by conservative political strategist Karl Rove. (Together, these two spent around $300-million to influence policy and public debate in the months leading up to the general election.)
Freedom Partners, previously called the Association for American Innovation, was set up under section 501(c) (6) of the American tax code, a section of the rules that does not require organizations to release the names (and amounts) of its donors. Nonetheless, the filing obtained by Politico does list the beneficiaries of Freedom Partners’ largess.
Major contributions include grants totalling $115-million to a group called the Center to Protect Patient Rights working to gain legislative repeal of Obamacare; $32.3-million to something called Americans for Prosperity, an advocacy group often courted by Republican presidential candidates; and, inevitably, perhaps, $3.5-million to the National Rifle Association, the main organization opposed to any form of additional gun control legislation. Freedom Partners grants also went to groups like Concerned Women for America Legislative Action Committee, which gets involved in a number of social policy debates and received $8.2-million.
Then there were donations to the Themis Trust, a Koch-based voter database that is made available to other conservative organizations to the tune of $5.8-million; Public Notice, a fiscal policy think tank, receiving $5.5-million; Generation Opportunity, a group for “liberty-loving” young people at $5-million; the LIBRE Initiative, which targets a free-market message to Hispanic immigrants to the amount of $3.1-million; the Chamber of Commerce at $2-million; the American Energy Alliance at $1.5-million; and the State Tea Party Express, the Tea Party Patriots and Heritage Action for America, each of which received a bit less than $1-million each. There were also contributions to the American Future Fund, an Iowa-based conservative group active in the 2012 elections, and an array of smaller, Tea Party-affiliated organizations.
Freedom Partners president, Marc Short, told the media he released this filing to Politico because he wanted to shine (hopefully favourable) light on his group and its work. As Short said, “There’s a mystery around us that makes an interesting story. There’s also a vilification that happens that gets exaggerated when your opposition thinks you’re secretive. Our members are proud to be part of [it].”
Of course it is true Democrats have their own vast web of secretive funders, and relatively few liberal donors have gotten as much scrutiny as the Koch brothers have received over the past few years. Nevertheless, what Short termed his “proud” donors have not been so proud that they have been willing to identify themselves publicly as donors to the Koch brothers fund. And Short declined to speak about the men and women donating to this fund, other than to say entities directly linked to the Kochs’ have provided a “minority” of the resources to this major fund and that the largest single donor to Freedom Partners gave about $25-million, or one tenth of the total kitty.
The management of the organization is largely in the hands of current or former employees of Koch brothers connected firms or foundations, and some play active roles in the Republican Party at the state level. The group’s overall membership comprises some 200 donors who frequently attend the semi-annual conferences organized by the Koch brothers. Each of these members pays at least $100,000 annually in what the report terms “membership dues”. These semi-annual conferences bring top Republican politicians like House Majority leader Eric Cantor and House Budget Committee chairman Paul Ryan together with attendees and, beyond their gifts to Freedom Partners, many of these attendees also contribute directly to other Koch-approved groups. In addition, the Kochs’ have themselves been giving to a variety of university think tanks, beyond the grants from Freedom Partners.
In effect, Freedom Partners acts as a clearinghouse for money and message strategy. Like other such groups, right or left, it takes the money it raises and distributes it to its favoured causes and groups. Most of these groups are non-profits that mix issue policy advocacy and election advertising in their own spending. Beyond the mass efficiencies of marrying up like-minded donors and their money to gain more leverage, this arrangement gives the donors additional anonymity and it smudges further the original sources of money that fuels these often-controversial campaigns.
Freedom Partners has been set up as a 501(c)(6) style organization rather than as a 501(c)(4) “social welfare” donation giving body. This is a tax code category that lets groups spend money on political campaigns, even as their donor lists are kept secret. This has been drawing increasing regulatory and legislative scrutiny. Critics charge some such groups violate campaign laws by effectively acting as campaign financing organizations for specific candidates. Freedom Partners also confers an additional advantage to its members for their contributions to it. Some of their contributions may actually be tax-deductible gifts, as the givers can claim it as a business expense by virtue of the contributions being categorized as organizational dues, just like anyone else’s annual subscription to a business roundtable. In structuring their giving empire the way they have done, the Koch brothers have become financial and tax innovators in the murky, complex world of American campaign finance. In effect, Freedom Partners is exploring some near-virgin territory in the thickets of the tax code as the first such arrangement in what could become an entirely new class of funding weapons in the secret money arms race.
In his briefing last week, Short said his group’s supporters are “concerned that the nation that they grew up in and that their businesses have flourished in will not be there for their children and grandchildren,” and they are “committed to trying to restore what they view [as] free markets in a free society in America. They are really worried about the country that’s going to be left for their future generations.” Commenting on this draft filing (the final report was scheduled to be filed with the IRS earlier this week), Nicholas Confessore, writing in the New York Times, said, “Freedom Partners, as the group is now known, is playing a bigger role for the Kochs as the brothers seek a tighter rein over the advocacy groups and political organizations that their donor network finances and expand their involvement in Republican political causes.”
Of course the Kochs aren’t the only ones making such contributions of course. Just for starters there’s that gambling and real estate magnate, Sheldon Adelson, the man who made such a splash supporting Newt Gingrich’s abortive run for the presidency with his millions. Taken together, do Adelson, the Kochs, Rove and various others sum up a vast right-wing, er, conspiracy?
At the very minimum, whatever it is, it is an extremely well heeled one. For comparison’s sake, set against just the Koch brothers’ war chest for their selected campaigns and causes, the full, total, all-in cost for the presidential campaigns by both major party candidates (and thus all contributions from all donors across the country), taken together, weighed in at about $2.23-billion, or a bit less than ten times the Koch brothers’ individual war chest for their pet causes and hates.
In his media briefing, Short declined to be deflated by the obvious fact that his ideological partners could not unseat Barack Obama as President and that they failed to win the Senate back for Republicans in 2012, despite all the money spent. Looking off into the future, he declared, “Our members are committed to the long term, not to one individual cycle”. Watch for even more aggressive fundraising for future election cycles and even more anonymous money passing through funding vehicles like Freedom Partners. DM
For more, read:
The Total Cost Of The 2012 Presidential Race Was Astounding, at Business Insider
Bloomberg by the Numbers: $2.23 Bln, at Bloomberg
Tax Filings Hint at Extent of Koch Brothers’ Reach, at the New York Times
Koch Brothers-Backed Nonprofit Gave $236 Million to Conservative Groups, at Foundationcenter
First Lady Launches Counterattack, at the Washington Post
Koch Brothers Break New Ground in Dark Money, at National Journal
Exclusive: The Koch brothers’ secret bank at Politico
The Koch Brothers: Funding $67,042,064 To Groups Denying Climate Change Science Since 1997, at Greenpeace
Photo: David Koch, executive vice president of Koch Industries, applauds during an Economic Club of New York event in New York, December 10, 2012. REUTERS/Brendan McDermid.