What does the death of Mol­lie Tib­betts, an Iowa col­lege stu­dent mur­dered by an undoc­u­ment farm work­er in Iowa back in July, have in com­mon with down­fall of Amer­i­ca? Well, if you had asked Fox News or Pres­i­dent Trump in the days fol­low­ing the rev­e­la­tion that Mol­lie’s mur­der­er was ‘an ille­gal’, they would have told you ille­gal immi­gra­tion is what the mur­der and Amer­i­ca’s down­fall have in com­mon.

But then the real com­mon link between Mol­lie’s mur­der and the down­fall of Amer­i­ca was dis­cov­ered and the right-wing noise machine sud­den­ly stopped talk­ing about Mol­lie’s mur­der. Because that com­mon link turned out to be a per­son. The per­son who ille­gal­ly employed and housed for years Tib­betts’s mur­der­er. A per­son the Repub­li­can par­ty and the bil­lion­aires it works for would rather the Amer­i­can pub­lic not read about because she hap­pens to be one of the Repub­li­can Par­ty’s mas­ters of the dark arts of wield­ing ‘dark mon­ey’ in Amer­i­can pol­i­tics: Nicole Schlinger, an influ­en­tial Iowan Repub­li­can fundrais­er and an impor­tant fig­ure in a net­work of Repub­li­can polit­i­cal oper­a­tives who found­ed and oper­ate Amer­i­can Future Fund (AFF), a 501(c)(4) (‘social wel­fare’) polit­i­cal super PAC.

Nicole was AFF’s first pres­i­dent. And it turns out the sto­ry of AFF, which was start­ed in 2008, two years before Cit­i­zens Unit­ed, is the sto­ry of what was wrong with the US cam­paign finance sys­tem in the pre-Cit­i­zens Unit­ed era and the sto­ry of how it got much worse in the post-Cit­i­zen Unit­ed era.

The sto­ry of Amer­i­can Future Fund is also a sto­ry about how the mega-donor net­works oper­at­ed by the Koch broth­ers and Karl Rove were respon­si­ble for the vast major­i­ty of new ‘dark mon­ey’ flow­ing into the US polit­i­cal sys­tem post-Cit­i­zens Unit­ed. The right-wing donor net­works oper­at­ed by the Kochs and Rove have played a mas­sive role in that wors­en­ing post-Cit­i­zens Unit­ed sit­u­a­tion and Nicole Schlinger’s AFF was an impor­tant tool for both net­works in exploit­ing that wors­en­ing sit­u­a­tion. AFF pro­vides a full spec­trum of polit­i­cal ser­vices, but one of its most impor­tant ser­vices is oper­at­ing large­ly in the dark with­out the pub­lic know­ing what its doing and who hired it.

Schlinger also runs Cam­paign­HQ, a call-cen­ter busi­ness that pro­vides robo-call­ing and fundrais­ing ser­vices for a num­ber of the most anti-immi­grant GOP politi­cians today, from Ted Cruz to Corey Stew­art (the ‘Alt Right’ GOP guber­na­to­r­i­al can­di­date in Vir­ginia this year). And in Ted Cruz’s and Corey Stew­art’s cas­es, Schlinger raised funds for them in their races this year. Keep in mind that Cruz was locked in an excep­tion­al­ly tight reelec­tion race this year when this sto­ry broke, so this the kind of sto­ry that could have had sig­nif­i­cant polit­i­cal ram­i­fi­ca­tions if it end­ed up mak­ing Cruz look like a hyp­ocrite who will defend the employ­ers of undoc­u­ment­ed work­ers when they’re rais­ing mon­ey for him. And Corey Stew­art straight up says in the first arti­cle below that he does­n’t real­ly care with Schlinger does “in her per­son­al life” as long as she’s good a fundrais­ing.

That’s all part of why the Repub­li­can Par­ty would like­ly pre­fer the Amer­i­can pub­lic remains in the dark about the sto­ry of Nicole Schlinger, her career as a Repub­li­can fundrais­er and offi­cer in dark mon­ey enti­ties like Amer­i­can Future Fund, and her propen­si­ty for hir­ing undoc­u­ment­ed immi­grants. And in the con­text of the cur­rent fix­a­tion with­in the GOP today on ille­gal immi­gra­tion, the fact that a key Repub­li­can mas­ter of dark mon­ey pol­i­tics is the per­son who ille­gal­ly hired Tib­betts mur­der­er is a per­fect storm sto­ry for shin­ing a light on Amer­i­can’s dark mon­ey infra­struc­ture.

So when the right-wing noise machine sud­den­ly stopped talk­ing about Mol­lie’s mur­der short­ly after Nicole Schlinger’s name entered the sto­ry it’s hard to avoid the con­clu­sion that a desire to keep Schlinger’s per­son­al biog­ra­phy as a mas­ter of the dark mon­ey pol­i­tics out of the news. A biog­ra­phy that, again, real­ly is like the quin­tes­sen­tial sto­ry of how right-wing bil­lion­aire mon­ey has infest­ed Amer­i­can pol­i­tics.

That’s the sto­ry we’re going to look at in this post. The sto­ry of the Amer­i­can Future Foun­da­tion. It’s a sto­ry that over­laps with Schlinger’s life but has a life of its own. A sto­ry with the fol­low­ing key points:

1. AFF was start­ed in 2008 as a 501(c)(4) ‘social wel­fare’ non­prof­it, with Schlinger as its first pres­i­dent. But Schlinger was just one of the Iowan Repub­li­can pow­er bro­kers behind it. As we’re going to see, main­tain­ing the pre­tense of being a ‘social wel­fare’ non­prof­it is cen­tral to how dark mon­ey oper­ates in Amer­i­can pol­i­tics and AFF’s adop­tion of that ‘social wel­fare’ sta­tus is par­tic­u­lar­ly emblem­at­ic of the far­ci­cal nature of dark mon­ey enti­ties claim­ing ‘social wel­fare’ sta­tus.

2. By 2009, AFF was lob­by­ing the Fed­er­al Elec­tion Com­mis­sion (FEC) to weak­en state reg­u­la­tions on polit­i­cal robo-call­ing in antic­i­pa­tion of robo-call­ing cam­paigns explic­it­ly advo­cat­ing for and against politi­cians in the 2010 mid-terms. As we’re going to see, the rules for 501(c)(4)s for polit­i­cal attack ads that direct­ly advo­cate for or against a can­di­date require the dis­clo­sure of how much was spent on the ads but not who paid for them. And lack of donor dis­clo­sure require­ments is a crit­i­cal fea­ture of 501(c)(4)s that make them ide­al for let­ting bil­lion­aires inject mas­sive amounts of mon­ey in pol­i­tics anony­mous­ly.

3. AFF appears to be close­ly affil­i­at­ed with DCI Group, a shady Repub­li­can lob­by­ing firm known for tak­ing on clients like RJ Reynolds Tobac­co and the Burmese Jun­ta. AFF was con­tract­ing a DCI Group affil­i­ate in 2009 and both AFF and DCI Group were hired by Doral Finan­cial Group in 2014 to lob­by­ing the gov­ern­ment of Puer­to Rico.

4. Two of the key fig­ures behind the for­ma­tion of AFF were pre­vi­ous­ly asso­ci­at­ed two of the sleazi­est polit­i­cal attacks in mod­ern Amer­i­can pres­i­den­tial pol­i­tics: the hyper-racist Willie Hor­ton ad from 1988 used against Michael Dukakis and the ‘Swift­boat Vet­er­ans for Truth’ smear cam­paign used against John Ker­ry in 2004. Specif­i­cal­ly, Ben Gins­berg — the for­mer chief out­side coun­sel to the Bush-Cheney 2004 cam­paign who resigned after it was revealed that he was also pro­vid­ing advice to Swift Boat Vet­er­ans for Truth — was AFF’s legal coun­cil. AFF’s media strate­gist was Lar­ry McCarthy, the guy who pro­duced the 1988 Willie Hor­ton ad.

5. When the 501(c)(4) sys­tem was start­ed near­ly a cen­tu­ry ago, these ‘social wel­fare’ enti­ties were expect­ed to “exclu­sive­ly” focus on social wel­fare caus­es and avoid explic­it par­ti­san advo­ca­cy for or against politi­cians in Amer­i­can pol­i­tics. But that was “exclu­sive­ly” rule was changed in 1959 to “pri­mar­i­ly” and sud­den­ly 501(c)(4) ‘social wel­fare’ enti­ties were allowed to spend up to half of their expen­di­tures on polit­i­cal attack ads. But that 50 per­cent cap can effec­tive­ly be raised to almost 100 per­cent via the use of net­works of affil­i­at­ed 501(c)(4)s all donat­ing to each oth­er. AFF can, and does, act as such a for-hire node in net­works of 501(c)(4)s.

6. 501(c)(4)s can run “Issue ads” — ads that don’t direct­ly advo­cate for or against a can­di­date — that don’t count as polit­i­cal attack ads. So a 501(c)(4) could spend half of its mon­ey on polit­i­cal attack ads advo­cat­ing for or against can­di­dates and spend the oth­er half on “issue ads” that are also indi­rect­ly advo­cat­ing for or against a can­di­date. In the past, the dif­fer­ence between a polit­i­cal attack ad and an issue is a neb­u­lous issue that large­ly comes down to whether or not cer­tain “mag­ic words” were used in the ad based on the 1976 Buck­ley v Valeo Supreme Court Case. Today, the rules aren’t quite so arbi­trary and the FEC has the pow­er to fac­tor in the larg­er con­text of an ad can be used to deter­mine whether or not its a polit­i­cal attack ad, but Repub­li­cans on the FEC board con­sis­tent­ly pre­vent the FEC from using that broad­er pow­er and the “mag­ic words” cri­te­ria remains the de fac­to rule. AFF is an expert in nav­i­gat­ing these grey lines.

7. The amount of mon­ey flow­ing into 501(c)(4)s explod­ed over the past decade. in 2006, $5.2 mil­lion was raised by 501(c)(4)s. It grew to $310 mil­lion by By 2012. The Supreme Court’s Cit­i­zens Unit­ed rul­ing was in Jan­u­ary of 2010. The vast major­i­ty of that rise in 501(c)(4) dona­tions was to right-wing groups $265.2 mil­lion of the $310 mil­lion). AFF was a major recip­i­ent of that mon­ey. Almost all of AFF’s dona­tions dur­ing this peri­od were from the Koch net­work. The Koch and Rove donor net­works played the largest roles in this spike in 501(c)(4) dona­tions.

8. Oth­er key enti­ties in the Koch net­work of 501(c)(4)s include 60 Plus (sup­pos­ed­ly a con­ser­v­a­tive ver­sion of the A.A.R.P. that actu­al­ly works as lob­by­ing mer­ce­nary), the TC4 Trust and the Cen­ter to Pro­tect Patient Rights (CPPR). TC4 and CPPR were dubbed “shad­ow mon­ey mail­box­es” after it was revealed how they act­ed as key mid­dle-men orga­ni­za­tions that would accept dona­tions from the Koch net­work and then re-gift that mon­ey to oth­er enti­ties in the Koch net­work to the obscure the mon­ey flows. The mon­ey trail was fur­ther obscured by TC4 and CPPR using “dis­re­gard­able enti­ties”, which are sub-units of 501(c)(4)s that use dif­fer­ent names to the pub­lic. The use of these “dis­re­gard­able enti­ties” was fur­ther obscured by incor­rect IRS fil­ings that left out the exis­tence of these “dis­re­gard­able enti­ties” and were only cor­rect­ed in lat­er years with tax fil­ing amend­ments.

9. Fol­low­ing the 2012 elec­tion, AFF was large­ly kicked out of the Koch net­work after it was revealed that AFF’s work on a 2012 Cal­i­for­nia bal­lot ini­tia­tive vio­lat­ed Cal­i­for­nia law. A Koch-based enti­ty, Amer­i­cans for Job Secu­ri­ty, gave $24 mil­lion to CPPR. CPPR, in turn, gave $7 mil­lion to AFF and $13 mil­lion to Amer­i­cans for Respon­si­ble Lead­er­ship, anoth­er Koch-backed 501(c)(4). AFF and Amer­i­cans for Respon­si­ble Lead­er­ship then passed the mon­ey along to var­i­ous Cal­i­for­nia bal­lot ini­tia­tives. This was con­sid­ered cam­paign mon­ey laun­der­ing by Cal­i­for­nia law.

10. AFF respond­ed to get­ting cut off from the Koch funds by find­ing oth­er clients. Like cor­po­rate lob­by­ing for Doral Finan­cial Group. In 2014, Karl Rove’s Cross­roads GPS 501(c)(4) hired AFF to get involved in the North Car­oli­na sen­ate race. But AFF did­n’t back the Repub­li­can. AFF backed the Lib­er­tar­i­an can­di­date as part of a strat­e­gy to bleed off younger vot­ers away from the Demo­c­rat by empha­siz­ing the Lib­er­tar­i­an’s advo­ca­cy for legal­iz­ing mar­i­jua­na. The Repub­li­can can­di­date won that race.

11. By 2016, AFF’s clients includ­ed the estab­lish­ment Repub­li­can mega-donors back­ing Mar­co Rubio’s run for the White House. Rubio’s cam­paign direct­ly hired AFF for the gen­er­al elec­tion after Mar­co Rubio dropped out of the pres­i­den­tial race and jumped back into the Sen­ate race.

12. In 2016, AFF donat­ed $3 mil­lion to the Nation­al Rifle Asso­ci­a­tion, high­light­ing its ser­vice as a mid­dle-man donor.

13. In 2018, AFF was used by the House Repub­li­can lead­er­ship to secret­ly get involved in Cal­i­for­ni­a’s unusu­al “Jun­gle” pri­maries (where all can­di­dates from all par­ties run in a sin­gle pri­ma­ry and the top two head to a gen­er­al elec­tion run-off). This includ­ed pro­vid­ing ser­vices like hir­ing an army of door-knock­ers across three Cal­i­for­nia dis­tricts that knocked on 400,000 doors. At the time, Repub­li­cans were open­ly anx­ious about the lack of nation­al Repub­li­can par­ty involve­ment but it was lat­er revealed that the Repub­li­can par­ty lead­er­ship want­ed their hir­ing of AFF to remain a secret over con­cerns that their moves could anger the Repub­li­can base.

14. While the spend­ing by 501(c)(4)s is tax free, the dona­tions to 501(c)(4)s has been sub­ject to the gift tax since the 1980s, but the IRS nev­er con­sis­tent­ly enforced this rule and many large donors nev­er paid it. In 2011, the IRS attempt­ed to audit five large 501(c)(4) donors over whether or not they paid their gift tax­es on pre­vi­ous dona­tions. The Repub­li­cans in Con­gress pres­sure the IRS to shut down the audit. In 2015, Con­gress was passed a law elim­i­nat­ing the gift tax for all non­prof­its, includ­ing 501(c)(4)s, cit­ing that 2011 audit attempt as jus­ti­fi­ca­tion.

15. In July of this year, the IRS declared that 501(c)(4)s no longer need to dis­close the iden­ti­ties of large donors to the IRS itself. This is seen as poten­tial­ly incon­se­quen­tial because the IRS almost nev­er audits 501(c)(4)s any­way. The 2015 lift­ing of the gift tax on 501(c)(4)s by con­gress was used as a jus­ti­fi­ca­tion for this move. The right-wing hys­te­ria and out­rage over the fake ‘IRS was tar­get­ing con­ser­v­a­tives’ scan­dal of 2013 was also used as a jus­ti­fi­ca­tion. And while experts see this as large­ly incon­se­quen­tial since the IRS rarely audits 501(c)(4)s any­ways, one area that experts do see this impact is watch­ing out for for­eign dona­tions. Although groups like AFF or Lim­it­ed Lia­bil­i­ty Cor­po­ra­tions can be used to obscure for­eign dona­tions so it still might not mat­ter.

16. In Sep­tem­ber of this year, the Supreme Court actu­al­ly made a poten­tial­ly his­toric rul­ing that 501(c)(4)s do actu­al­ly have to dis­close donor iden­ti­ties for the mon­ey used for polit­i­cal attack ads (i.e. ads that explic­it­ly advo­cate for or against a par­tic­u­lar can­di­date). But experts expect this rul­ing to have a lim­it­ed impact on the dis­clo­sure of donor iden­ti­ties thanks to the use of groups like AFF that can act as mid­dle-men enti­ties between the donor and the enti­ties that run the actu­al ads (i.e., the only donors that will be dis­closed will be the names of groups like AFF, not the names of the peo­ple who donat­ed to AFF).

That’s the sto­ry we’re going to be look­ing at in this post. The sto­ry of how 501(c)(4) ‘social wel­fare’ orga­ni­za­tions were used by wealthy right-wing donors to unleashed a flood of unlim­it­ed anony­mous polit­i­cal spend­ing in Amer­i­ca’s cam­paigns. That’s the sto­ry of Amer­i­can Future Fund. A sto­ry that’s one degree removed from the mur­der of Iowa col­lege stu­dent Mol­lie Tib­betts.

So let’s start off with an arti­cle look­ing at how Nicole Schlinger and her hus­band Eric Lang just hap­pen to own the farm that employed and housed Cristhi­an Bahena Rivera, the undoc­u­ment­ed immi­grant who killed Mol­lie Tib­betts. Rivera was one of 10 oth­er undoc­u­ment­ed immi­grants employed by the farm. The sto­ry was imme­di­ate­ly pro­mot­ed by the Repub­li­can par­ty as some­how the most impor­tant sto­ry in the coun­try after Rivera was iden­ti­fied as the mur­der­er. It’s a par­tic­u­lar­ly awk­ward sit­u­a­tion for not just Schlinger but her Repub­li­can clients too. Clients that include some of the most anti-immi­grant politi­cians run­ning in 2018 like Ted Cruz and Corey Stew­art. And yet, as the arti­cle notes, Schlinger and her hus­band have some­how man­aged to avoid the media spot­light, an impres­sive feat the cou­ple has man­aged to main­tain to this day:

Asso­ci­at­ed Press The Man Accused of Killing Mol­lie Tib­betts Lived on Land Owned by GOP Fundrais­er By RYAN J. FOLEY

Aug. 24, 2018 IOWA CITY, Iowa (AP) — A top Repub­li­can fundrais­er whose firm works for sev­er­al promi­nent immi­gra­tion hard­lin­ers is the par­tial own­er of the land where the Mex­i­can man accused of killing Iowa col­lege stu­dent Mol­lie Tib­betts lived rent-free, a farm spokes­woman said Fri­day. Nicole Schlinger has long been a key fundrais­er and cam­paign con­trac­tor for GOP politi­cians in Iowa and beyond, includ­ing this cycle for Texas Sen. Ted Cruz and Vir­ginia Sen­ate can­di­date Corey Stew­art. Schlinger is the pres­i­dent of Cam­paign Head­quar­ters, a call cen­ter that makes fundrais­ing calls, iden­ti­fies sup­port­ers and helps turn out vot­ers for con­ser­v­a­tive can­di­dates and groups. Her busi­ness is one of the largest in Brook­lyn, the cen­tral Iowa town where Tib­betts dis­ap­peared while out for a run on July 18. Schlinger is mar­ried to Eric Lang, the pres­i­dent of the fam­i­ly-owned dairy that has acknowl­edged pro­vid­ing employ­ment and hous­ing for the last four years to Cristhi­an Bahena Rivera, the man charged with mur­der in Tib­betts’ death. The cou­ple — along with her husband’s broth­er Craig Lang and his wife — own farm­land out­side Brook­lyn that includes trail­ers where some of the dairy’s employ­ees live for free as a ben­e­fit of their employ­ment, farm spokes­woman Eileen Wixted con­firmed. She said Rivera lived there for the dura­tion of his employ­ment, and about half of the farm’s oth­er 10 work­ers do so as well. Under the arrange­ment, the farm­ing com­pa­ny pays the cou­ples to rent the land but work­ers do not have to pay, she said. In an email Fri­day, Schlinger said that she was “shocked and deeply sad­dened” by Tib­betts’ death and had nev­er met Rivera. “The per­pe­tra­tor should be pun­ished to the fullest extent of the law, and when he meets his mak­er, suf­fer the con­se­quences he deserves,” she wrote. She said that she was gift­ed an own­er­ship inter­est in the land many years ago from her husband’s fam­i­ly and that she has no role in the farm­ing oper­a­tion. Still, the fact that one of its own oper­a­tives has indi­rect ties to the case could com­pli­cate GOP efforts to high­light the grue­some slay­ing in its polit­i­cal mes­sag­ing ahead of the Novem­ber midterm elec­tion. Dairy co-own­er Craig Lang also was a Repub­li­can can­di­date for Iowa agri­cul­ture sec­re­tary, fin­ish­ing third in a five-way race in the June pri­ma­ry. Repub­li­cans such as Pres­i­dent Don­ald Trump and Iowa Gov. Kim Reynolds called for stricter immi­gra­tion laws and enforce­ment almost imme­di­ate­ly after Rivera, who is sus­pect­ed of being in the coun­try ille­gal­ly, was charged Tues­day. Some have blamed Demo­c­ra­t­ic poli­cies for the slay­ing, even though stud­ies have dis­put­ed the notion that those in the coun­try ille­gal­ly are more like­ly to com­mit vio­lent crime. “Every vic­tim below would be alive today if we enforced our immi­gra­tion laws,” U.S. Rep. Steve King of Iowa tweet­ed Fri­day, above a pic­ture of Tib­betts and oth­er vic­tims. “Left­ists sac­ri­ficed thou­sands, includ­ing their own, on the altar of Polit­i­cal Cor­rect­ness.” Schlinger’s busi­ness calls itself “the best con­ser­v­a­tive call cen­ter in Amer­i­ca.” Her biog­ra­phy claims she is the most pro­lif­ic fundrais­er in Iowa GOP his­to­ry, hav­ing brought in more than $50 mil­lion for politi­cians and caus­es. She has said her busi­ness has made mil­lions of phone calls for can­di­dates seek­ing offices rang­ing from pres­i­dent to city coun­cil since its found­ing in 1999. Her firm’s client list includes sev­er­al politi­cians who rou­tine­ly call for stricter immi­gra­tion enforce­ment. Fed­er­al Elec­tion Com­mis­sion records show that Cruz’s re-elec­tion cam­paign has paid Cam­paign­HQ near­ly $1.7 mil­lion since the begin­ning of 2017. A Cruz cam­paign spokes­woman had no imme­di­ate com­ment. Stew­art, who has made step­ping up depor­ta­tions of immi­grants in the coun­try ille­gal­ly a major cam­paign theme, has also employed the firm, along with the cam­paigns of Sen. Mike Lee of Utah and Rep. Joe Wil­son of South Car­oli­na. The now-defunct Stop Sanc­tu­ary Cities PAC paid the firm $3,449 for its ser­vices in March. In an inter­view Fri­day, Stew­art said he had no prob­lem with Schlinger’s prop­er­ty ties to the sus­pect, say­ing her firm does a “great job” rais­ing mon­ey. “I hire peo­ple for their abil­i­ty to do the work for my cam­paign,” he said. “What­ev­er she does in her per­son­al life is her busi­ness.” After Rivera was charged, Reynolds denounced an immi­gra­tion sys­tem that “allowed a preda­tor like this to live in our com­mu­ni­ty.” Cam­paign­HQ was a top ven­dor for the cam­paigns of for­mer Iowa Gov. Ter­ry Branstad, who select­ed Reynolds as his run­ning mate in 2010, and has also done some work direct­ly for Reynolds’ cam­paigns, state records show. Inves­ti­ga­tors say that Rivera came to the coun­try from Mex­i­co ille­gal­ly sev­er­al years ago when he was in the late teens. He is accused of stalk­ing Tib­betts while she was out for a run a few miles from his home, killing her after she threat­ened to call police on him, and dump­ing her body in a corn­field. Pre­lim­i­nary autop­sy results show that Tib­betts died from mul­ti­ple “sharp force injuries.” Schlinger and her hus­band have man­aged to large­ly avoid the intense media spot­light that has fol­lowed the case. They did not speak at a press con­fer­ence Wednes­day when farm man­ag­er Dane Lang said Rivera pre­sent­ed an out-of-state iden­ti­fi­ca­tion and Social Secu­ri­ty num­ber with a dif­fer­ent name when he was hired in 2014. Dane Lang said he was shocked to learn to that Rivera’s alleged­ly not in the coun­try legal­ly. But oth­ers around town, includ­ing Rivera’s defense lawyer, ques­tion whether the fam­i­ly had to have had sus­pi­cions, if not known, about Rivera’s immi­gra­tion sta­tus. ... ———- “The Man Accused of Killing Mol­lie Tib­betts Lived on Land Owned by GOP Fundrais­er” by RYAN J. FOLEY; Asso­ci­at­ed Press; 08/24/2018

“Still, the fact that one of its own oper­a­tives has indi­rect ties to the case could com­pli­cate GOP efforts to high­light the grue­some slay­ing in its polit­i­cal mes­sag­ing ahead of the Novem­ber midterm elec­tion. Dairy co-own­er Craig Lang also was a Repub­li­can can­di­date for Iowa agri­cul­ture sec­re­tary, fin­ish­ing third in a five-way race in the June pri­ma­ry.”

The killer’s employ­ers are big time Repub­li­cans. It’s quite a com­pli­ca­tion for the GOP efforts to cap­i­tal­ize on the grue­some slay­ing. Not only is it obvi­ous­ly polit­i­cal­ly embar­rass­ing, but Nicole Schlinger is also a key fundrais­er for politi­cians in Iowa and beyond via her Cam­paign­HQ call cen­ter com­pa­ny. That includes fundrais­ing for two can­di­dates in tough races this year: Ted Cruz in Texas and Corey Stew­art in Vir­ginia:

...

Nicole Schlinger has long been a key fundrais­er and cam­paign con­trac­tor for GOP politi­cians in Iowa and beyond, includ­ing this cycle for Texas Sen. Ted Cruz and Vir­ginia Sen­ate can­di­date Corey Stew­art. Schlinger is the pres­i­dent of Cam­paign Head­quar­ters, a call cen­ter that makes fundrais­ing calls, iden­ti­fies sup­port­ers and helps turn out vot­ers for con­ser­v­a­tive can­di­dates and groups. Her busi­ness is one of the largest in Brook­lyn, the cen­tral Iowa town where Tib­betts dis­ap­peared while out for a run on July 18.

...

And Schlinger and her hus­band Eric Lang did­n’t just employ Rivera for the last four years. They also pro­vid­ed his hous­ing free of charge along with 10 oth­er work­ers. That sure sounds like the kind of arrange­ment that a com­pa­ny that knew it was employ­ing undoc­u­ment­ed work­ers would do:

...

Schlinger is mar­ried to Eric Lang, the pres­i­dent of the fam­i­ly-owned dairy that has acknowl­edged pro­vid­ing employ­ment and hous­ing for the last four years to Cristhi­an Bahena Rivera, the man charged with mur­der in Tib­betts’ death. The cou­ple — along with her husband’s broth­er Craig Lang and his wife — own farm­land out­side Brook­lyn that includes trail­ers where some of the dairy’s employ­ees live for free as a ben­e­fit of their employ­ment, farm spokes­woman Eileen Wixted con­firmed. She said Rivera lived there for the dura­tion of his employ­ment, and about half of the farm’s oth­er 10 work­ers do so as well. Under the arrange­ment, the farm­ing com­pa­ny pays the cou­ples to rent the land but work­ers do not have to pay, she said.

...

Then there’s the fact that a num­ber of Schlinger’s clients are viru­ent­ly anti-immi­grant politi­cians:

...

Schlinger’s busi­ness calls itself “the best con­ser­v­a­tive call cen­ter in Amer­i­ca.” Her biog­ra­phy claims she is the most pro­lif­ic fundrais­er in Iowa GOP his­to­ry, hav­ing brought in more than $50 mil­lion for politi­cians and caus­es. She has said her busi­ness has made mil­lions of phone calls for can­di­dates seek­ing offices rang­ing from pres­i­dent to city coun­cil since its found­ing in 1999. Her firm’s client list includes sev­er­al politi­cians who rou­tine­ly call for stricter immi­gra­tion enforce­ment. Fed­er­al Elec­tion Com­mis­sion records show that Cruz’s re-elec­tion cam­paign has paid Cam­paign­HQ near­ly $1.7 mil­lion since the begin­ning of 2017. A Cruz cam­paign spokes­woman had no imme­di­ate com­ment. Stew­art, who has made step­ping up depor­ta­tions of immi­grants in the coun­try ille­gal­ly a major cam­paign theme, has also employed the firm, along with the cam­paigns of Sen. Mike Lee of Utah and Rep. Joe Wil­son of South Car­oli­na. The now-defunct Stop Sanc­tu­ary Cities PAC paid the firm $3,449 for its ser­vices in March.

...

It’s a tricky sit­u­a­tion for GOP: extreme oppor­tu­ni­ty cou­pled with pos­si­ble polit­i­cal per­il. Polit­i­cal per­il exem­pli­fied by Corey Stew­art’s response to the rev­e­la­tion that one of fundrais­ers, Schlinger, was bla­tant­ly employ­ing undoc­u­ment­ed work­ers: Stew­art sim­ply said he sees no prob­lem and it was none of his busi­ness what Schlinger did with her busi­ness. It’s the kind of answer Trump’s base prob­a­bly did­n’t like:

...

In an inter­view Fri­day, Stew­art said he had no prob­lem with Schlinger’s prop­er­ty ties to the sus­pect, say­ing her firm does a “great job” rais­ing mon­ey. “I hire peo­ple for their abil­i­ty to do the work for my cam­paign,” he said. “What­ev­er she does in her per­son­al life is her busi­ness.”

...

“What­ev­er she does in her per­son­al life is her busi­ness.”

That’s quite a state­ment from an Alt Right can­di­date who has defined his polit­i­cal per­sona with his fix­a­tion on the dan­gers of ille­gal immi­gra­tion.

And yet, despite the polit­i­cal­ly explo­sive nature of this twist in the mur­der of Mol­lie Tib­betts, Schlinger’s ties to this sto­ry received hard­ly any cov­er­age:

...

In an email Fri­day, Schlinger said that she was “shocked and deeply sad­dened” by Tib­betts’ death and had nev­er met Rivera. “The per­pe­tra­tor should be pun­ished to the fullest extent of the law, and when he meets his mak­er, suf­fer the con­se­quences he deserves,” she wrote. She said that she was gift­ed an own­er­ship inter­est in the land many years ago from her husband’s fam­i­ly and that she has no role in the farm­ing oper­a­tion. ... Schlinger and her hus­band have man­aged to large­ly avoid the intense media spot­light that has fol­lowed the case. They did not speak at a press con­fer­ence Wednes­day when farm man­ag­er Dane Lang said Rivera pre­sent­ed an out-of-state iden­ti­fi­ca­tion and Social Secu­ri­ty num­ber with a dif­fer­ent name when he was hired in 2014. Dane Lang said he was shocked to learn to that Rivera’s alleged­ly not in the coun­try legal­ly. But oth­ers around town, includ­ing Rivera’s defense lawyer, ques­tion whether the fam­i­ly had to have had sus­pi­cions, if not known, about Rivera’s immi­gra­tion sta­tus.

...

And as we now know months lat­er, the ties Schlinger and Lang have to the mur­der of Mol­lie has large­ly stayed out of the media spot­light, in large part because the mur­der of Mol­lie just sud­den­ly became a non-sto­ry not long after Schlinger and Lang’s ties were revealed.

Nichol Schlinger’s Amer­i­can Future Fund is the Sto­ry of the Present Day Amer­i­can Dark Mon­ey Night­mare

That’s all part of what is com­pli­cat­ing what would nor­mal­ly be a prime oppor­tu­ni­ty for GOP anti-immi­grant dem­a­goguery. But as we’re going to see in this post, the polit­i­cal con­se­quences of seri­ous media atten­tion to Nicole Schlinger could have sig­nif­i­cant reper­cus­sion. Reper­cus­sions that could, and should, shine sig­nif­i­cant light on the pub­lic’s under­stand­ing of how polit­i­cal ‘dark mon­ey’ oper­ates in Amer­i­ca’s bro­ken cam­paign finance sys­tem. The sto­ry of Nic­hole Schlinger’s Amer­i­can Future Fund is a pro­found­ly sym­bol­ic sto­ry about how the flood of mon­ey from anony­mous wealthy donors is actu­al­ly put to use to influ­ence elec­tions.

Because Amer­i­can Future Fund is both a provider of cam­paign ser­vices — every­thing from devel­op­ing and run­ning TV ad cam­paigns to hir­ing armies of door knock­ers to sign peti­tions — and a for-hire ‘social wel­fare’ orga­ni­za­tion node in a larg­er net­work of ‘social wel­fare’ 501(c)(4)s orga­ni­za­tions. Like the Koch net­work of polit­i­cal­ly active 501(c)(4) ‘social wel­fare’ orga­ni­za­tions. And Karl Rove’s net­work of polit­i­cal­ly active 501(c)(4) ‘social wel­fare’ orga­ni­za­tions. AFF has worked for both net­works. Specif­i­cal­ly, after the Koch net­work kicked AFF out of its net­work in 2013 after AFF was caught break­ing the 501(c)(4) rules in Cal­i­for­nia, AFF found a new home in Karl Rove’s net­work. We’re going to see that sto­ry play out in the arti­cles below.

So let’s start off our tour of Amer­i­can Future Fund (AFF) and the shad­owy world of polit­i­cal 501(c)(4) polit­i­cal ‘social wel­fare’ enti­ties by look­ing at this Novem­ber 2009 Talk­ing Points Memo piece about Schlinger’s AFF inform­ing the Fed­er­al Elec­tion Com­mis­sion that it’s plan­ning on run­ning a series of robo-call ads in the 2010 mid-term elec­tions that are going to be explic­it­ly advo­cat­ing for or against can­di­dates. AFF was advo­cat­ing that fed­er­al laws on robo-calls over­ride Iowa’s more strin­gent state laws on robo-calls and ask­ing the FEC to make a rul­ing. As the arti­cle notes, it was a request for an FEC rul­ing that would have impact­ed all US states, not just Iowa.

So in 2009, AFF was try­ing to weak­en the nation’s laws reg­u­lat­ing robo-calls in antic­i­pa­tion of its 2010 robo-call­ing cam­paigns on behalf of Repub­li­cans. Or at least that was one of the things AFF was up to in 2009. As we’ll see, it’s often up to a lot.

As the arti­cle also notes, AFF back in 2009 con­sist­ed more peo­ple affil­i­at­ed with the Repub­li­can par­ty than just Nic­hole Schlinger. Jason Torchin­sky, a lawyer for AFF’s polit­i­cal action group that would be car­ry­ing out the robo calls, was one of the archi­tects of the Amer­i­can Cen­ter for Vot­ing Rights (ACVR), a faux “vot­ing-rights” out­fit that was set up by GOP oper­a­tives in 2005 to “give ‘think tank’ aca­d­e­m­ic cachet to the unproven idea that vot­er fraud is a major prob­lem in elec­tions.”

Jason Torchin­sky worked at the time for a law firm run by Alex Vogel and his wife, Vir­ginia State Sen­a­tor Jill Holtz­man Vogel. Alex Vogel was ACVR’s exec­u­tive direc­tor and a for­mer RNC lawyer. His wife Jill had a track record of hard­ball tac­tics, includ­ing hav­ing her babysit­ter lev­el a cam­paign finance irreg­u­lar­i­ty alle­ga­tions against her pri­ma­ry oppo­nent and a local pros­e­cu­tor who was a sup­port­er inves­ti­gate it. She won the pri­ma­ry. The charges were dropped. Giv­en the fact that the legal exis­tence of some­thing AFF is a giant vio­la­tion of pru­dent cam­paign finance law, it’s iron­ic to have some­one affil­i­at­ed with the AFF with a his­to­ry of mak­ing fraud­u­lent cam­paign finance vio­la­tion alle­ga­tions as a polit­i­cal dirty trick.

Also keep in mind that this was just a cou­ple months before the Jan­u­ary 2010 Cit­i­zens Unit­ed Supreme Court deci­sion that sanc­tioned unlim­it­ed secret cor­po­rate and union polit­i­cal spend­ing through 501(c)(4)s. Unlim­it­ed mon­ey that would pay for a lot of robo-calls. Although it’s also impor­tant to point out that AFF with­drew its request for the FEC to rule that fed­er­al robo-call reg­u­la­tions over­ruled stricter state reg­u­la­tions just a cou­ple months lat­er in Jan­u­ary of 2010. So this was more of an aspi­ra­tion attempt to weak­en Amer­i­can’s robo-call­ing laws. The key point in the arti­cle is that AFF was bold­ly announc­ing plans for over­ly polit­i­cal adver­tis­ing advo­cat­ing for and against spe­cif­ic can­di­dates in the 2010 mid-terms. In oth­er words, it was behav­ing exact­ly like a high­ly par­ti­san polit­i­cal enti­ty. And yet it’s legal­ly allowed to mas­quer­ade as a non­prof­it ‘social wel­fare’ enti­ty, grant­i­ng it all sorts of priv­i­leges, like hid­ing its donors from the pub­lic.

Final­ly, as the arti­cle notes, because the AFF is a 501(c)(4), it’s not required to pub­licly dis­close very much infor­ma­tion. We’ll take a much clos­er look into those dis­clo­sure laws below. And the AFF ful­ly embraced that lack of required dis­clo­sure by hav­ing no one talk to the media. It was oper­at­ing as a black box enti­ty and a very large polit­i­cal mega-phone simul­ta­ne­ous­ly. And Nic­hole Schlinger was pres­i­dent at the time. So the arti­cle makes clear, avoid­ing media expo­sure is some­thing Nic­hole Schlinger has long had expe­ri­ence with. It’s an inte­gral aspect of her line of work as a dark mon­ey polit­i­cal oper­a­tive

Talk­ing Points Memo

Muck­rak­er Shad­owy GOP-Linked Group Plans Bar­rage Of 2010 Robo-Calls By Zachary Roth

Novem­ber 23, 2009 8:10 am A shad­owy con­ser­v­a­tive group with ties to the oper­a­tives behind a host of GOP dirty tricks is work­ing to under­mine state restric­tions on polit­i­cal robo-calls, as it gears up to unleash a bar­rage of such calls in 2010 races. Last month, Amer­i­can Future Fund Polit­i­cal Action (AFFPA) informed the FEC that it’s plan­ning robo-calls in con­gres­sion­al races. Jason Torchin­sky, a lawyer for AFFPA, wrote that the group “wish­es to dis­trib­ute pre-record­ed tele­phone calls … as part of a nation­wide pro­gram of polit­i­cal out­reach.” The calls, wrote Torchin­sky, “will express­ly advo­cate the elec­tion or defeat of one or more clear­ly iden­ti­fied can­di­dates for Fed­er­al office.”AFFPA was ask­ing the FEC for an advi­so­ry opin­ion on whether state laws restrict­ing robo-calls should apply, or whether, as AFFPA argues, they’re pre-empt­ed by a less restric­tive fed­er­al law that sought to stan­dard­ize the reg­u­la­tion of robo-calls. An FEC rul­ing in AFFPA’s favor would bad­ly under­mine state laws such as Minnesota’s, which requires the lis­ten­er to active­ly con­sent to hear­ing a record­ed mes­sage before the mes­sage can be played. That’s worth pay­ing atten­tion to in itself. But behind the robo-call effort is a team of high-pow­ered GOP oper­a­tives behind a slew of sleazy cam­paign tac­tics over the years. You might remem­ber Torchin­sky, AFFPA’s lawyer, as one of the archi­tects of the Amer­i­can Cen­ter for Vot­ing Rights (ACVR), the bogus “vot­ing-rights” group that was set up by GOP oper­a­tives in 2005 to “give ‘think tank’ aca­d­e­m­ic cachet to the unproven idea that vot­er fraud is a major prob­lem in elec­tions,” as elec­tion law expert Rick Hasen has writ­ten. For sev­er­al months, ACVR’s exec­u­tive direc­tor was Alex Vogel, a for­mer RNC lawyer whose con­sult­ing firm report­ed­ly was paid $75,000 for the ACVR gig. (Also involved with ACVR: TPM­muck­rak­er favorite Pat Rogers, the New Mex­i­co GOP activist who helped get David Igle­sias fired for not pur­su­ing bogus vot­er fraud com­plaints.) Vogel also appears to have a hand in AFF: Torchin­sky, a for­mer Bush cam­paign lawyer, works for the law firm run by Vogel and his wife, Vir­ginia State Sen­a­tor Jill Holtz­man Vogel. Holtz­man Vogel’s own polit­i­cal career may owe some­thing to sim­i­lar­ly hard­ball tac­tics. A for­mer RNC coun­sel her­self, she faced a tight pri­ma­ry in her Vir­ginia Sen­ate race, but pre­vailed after her oppo­nent, Mike Tate, was indict­ed for cam­paign finance irreg­u­lar­i­ties. The per­son who brought the com­plaint to the atten­tion of author­i­ties was Holtz­man Vogel’s baby-sit­ter, and the local pros­e­cu­tor who ini­tial­ly han­dled it was a Holtz­man Vogel sup­port­er. The charges against Tate were even­tu­al­ly dropped. As for AFF itself, the group already has earned a rep­u­ta­tion for traf­fick­ing in vicious and mis­lead­ing shots against Democ­rats. A typ­i­cal recent ad alleged that the gov­ern­ment “planned to give flu shots to detainees at Guan­tanamo.” It also has worked close­ly with Dick Armey’s Free­dom­Works to help pro­mote the Tea Par­ty ral­lies against health-care reform. Repub­li­can heavy-hit­ters Jan Van Lohuizen, Ed Tobin, Ben Gins­berg are all report­ed­ly involved with the group. Because AFF is a 501c4, it’s not required by law to release much infor­ma­tion about itself, and no one seems eager to speak on its behalf. Torchin­sky declined to speak to TPM­muck­rak­er on the record. Tim Albrecht, an Iowa GOP activist who now works for the guber­na­to­r­i­al cam­paign of Ter­ry Branstad, was quot­ed ear­li­er this month as a spokesman for the group, but told TPM­muck­rak­er that he could no longer serve in that capac­i­ty, and declined to pass our inquiry on to any oth­er spe­cif­ic rep­re­sen­ta­tive, say­ing only that he could for­ward it to the group’s gen­er­al mail­box. A sep­a­rate email to that address went unre­turned. AFF’s web­site lists San­dra Grein­er, anoth­er Iowa Repub­li­can, as pres­i­dent, while the Iowa sec­re­tary of states data­base lists Nicole Schlinger, a local GOP con­sul­tant as pres­i­dent. Nei­ther Grein­er nor Schlinger returned a call. ... ———– “Shad­owy GOP-Linked Group Plans Bar­rage Of 2010 Robo-Calls” by Zachary Roth; Talk­ing Points Memo; 11/23/2009

“A shad­owy con­ser­v­a­tive group with ties to the oper­a­tives behind a host of GOP dirty tricks is work­ing to under­mine state restric­tions on polit­i­cal robo-calls, as it gears up to unleash a bar­rage of such calls in 2010 races.”

The attempt­ed under­min­ing of polit­i­cal robo-call­ing reg­u­la­tions in antic­i­pa­tion of a big polit­i­cal ad cam­paign the next year. It’s just one of the many polit­i­cal activ­i­ties AFF was up to in 2009:

...

Last month, Amer­i­can Future Fund Polit­i­cal Action (AFFPA) informed the FEC that it’s plan­ning robo-calls in con­gres­sion­al races. Jason Torchin­sky, a lawyer for AFFPA, wrote that the group “wish­es to dis­trib­ute pre-record­ed tele­phone calls … as part of a nation­wide pro­gram of polit­i­cal out­reach.” The calls, wrote Torchin­sky, “will express­ly advo­cate the elec­tion or defeat of one or more clear­ly iden­ti­fied can­di­dates for Fed­er­al office.”AFFPA was ask­ing the FEC for an advi­so­ry opin­ion on whether state laws restrict­ing robo-calls should apply, or whether, as AFFPA argues, they’re pre-empt­ed by a less restric­tive fed­er­al law that sought to stan­dard­ize the reg­u­la­tion of robo-calls. An FEC rul­ing in AFFPA’s favor would bad­ly under­mine state laws such as Minnesota’s, which requires the lis­ten­er to active­ly con­sent to hear­ing a record­ed mes­sage before the mes­sage can be played.

...

And while AFF isn’t tech­ni­cal­ly a branch of the Repub­li­can Par­ty, it clear­ly should be seen as such based on the peo­ple behind it. Peo­ple like Jason Torchinksy and Alex and Julia Vogel:

...

That’s worth pay­ing atten­tion to in itself. But behind the robo-call effort is a team of high-pow­ered GOP oper­a­tives behind a slew of sleazy cam­paign tac­tics over the years. You might remem­ber Torchin­sky, AFFPA’s lawyer, as one of the archi­tects of the Amer­i­can Cen­ter for Vot­ing Rights (ACVR), the bogus “vot­ing-rights” group that was set up by GOP oper­a­tives in 2005 to “give ‘think tank’ aca­d­e­m­ic cachet to the unproven idea that vot­er fraud is a major prob­lem in elec­tions,” as elec­tion law expert Rick Hasen has writ­ten. For sev­er­al months, ACVR’s exec­u­tive direc­tor was Alex Vogel, a for­mer RNC lawyer whose con­sult­ing firm report­ed­ly was paid $75,000 for the ACVR gig. (Also involved with ACVR: TPM­muck­rak­er favorite Pat Rogers, the New Mex­i­co GOP activist who helped get David Igle­sias fired for not pur­su­ing bogus vot­er fraud com­plaints.) Vogel also appears to have a hand in AFF: Torchin­sky, a for­mer Bush cam­paign lawyer, works for the law firm run by Vogel and his wife, Vir­ginia State Sen­a­tor Jill Holtz­man Vogel. Holtz­man Vogel’s own polit­i­cal career may owe some­thing to sim­i­lar­ly hard­ball tac­tics. A for­mer RNC coun­sel her­self, she faced a tight pri­ma­ry in her Vir­ginia Sen­ate race, but pre­vailed after her oppo­nent, Mike Tate, was indict­ed for cam­paign finance irreg­u­lar­i­ties. The per­son who brought the com­plaint to the atten­tion of author­i­ties was Holtz­man Vogel’s baby-sit­ter, and the local pros­e­cu­tor who ini­tial­ly han­dled it was a Holtz­man Vogel sup­port­er. The charges against Tate were even­tu­al­ly dropped.

...

Nicole Schlinger was then the pres­i­dent of AFF, but she nor any­one else asso­ci­at­ed with AFF were inter­est­ed in talk­ing about its polit­i­cal activ­i­ties and could get away with this thanks to the secre­cy ben­e­fits that 501(c)(4) orga­ni­za­tions get:

...

Because AFF is a 501c4, it’s not required by law to release much infor­ma­tion about itself, and no one seems eager to speak on its behalf. Torchin­sky declined to speak to TPM­muck­rak­er on the record. Tim Albrecht, an Iowa GOP activist who now works for the guber­na­to­r­i­al cam­paign of Ter­ry Branstad, was quot­ed ear­li­er this month as a spokesman for the group, but told TPM­muck­rak­er that he could no longer serve in that capac­i­ty, and declined to pass our inquiry on to any oth­er spe­cif­ic rep­re­sen­ta­tive, say­ing only that he could for­ward it to the group’s gen­er­al mail­box. A sep­a­rate email to that address went unre­turned. AFF’s web­site lists San­dra Grein­er, anoth­er Iowa Repub­li­can, as pres­i­dent, while the Iowa sec­re­tary of states data­base lists Nicole Schlinger, a local GOP con­sul­tant as pres­i­dent. Nei­ther Grein­er nor Schlinger returned a call.

...

Yep, it turns out that Amer­i­can Future Fund (AFF) list­ed Nicole Schlinger as its pres­i­dent and “prin­ci­ple offi­cer” back in 2009. It’s worth not­ing that Iowa state sen­a­tor San­dra Gre­nier was pres­i­dent of AFF as of Feb­ru­ary of 2011, so Schlinger’s time as pres­i­dent was rel­a­tive­ly short. But as the first pres­i­dent of AFF that sig­ni­fies a par­tic­u­lar­ly close asso­ci­a­tion with the peo­ple behind it.

And it’s impor­tant to note anoth­er activ­i­ty AFF was up to in 2009: work­ing to pro­mote the then-nascent Tea Par­ty on behalf of the Koch-finan­cie Free­dom­Works:

...

As for AFF itself, the group already has earned a rep­u­ta­tion for traf­fick­ing in vicious and mis­lead­ing shots against Democ­rats. A typ­i­cal recent ad alleged that the gov­ern­ment “planned to give flu shots to detainees at Guan­tanamo.” It also has worked close­ly with Dick Armey’s Free­dom­Works to help pro­mote the Tea Par­ty ral­lies against health-care reform. Repub­li­can heavy-hit­ters Jan Van Lohuizen, Ed Tobin, Ben Gins­berg are all report­ed­ly involved with the group.

...

One of the rea­sons this work by AFF in 2009 to pro­mote the Tea Par­ty is impor­tant to note is because the fact that bil­lion­aire-backed enti­ties like the AFF were pro­mot­ing the Tea Par­ty in 2009, and this was pub­licly known, dou­bles as a jus­ti­fi­ca­tion for the scruti­ny give by the IRS to the flood of new Tea Par­ty groups fil­ing for 501(c)(4) sta­tus in 2010–2012. That scruti­ny led to right-wing out­cry 2013 charg­ing that the IRS was tar­get­ing con­ser­v­a­tive 501(c)(4)s in a par­ti­san man­ner. Scruti­ny designed to inves­ti­gate whether or not these groups apply­ing for 501(c)(4) social wel­fare sta­tus tru­ly were social wel­fare groups and weren’t just polit­i­cal enti­ties mas­querad­ing as social wel­fare enti­ties.

And as we’ll see below, that out­cry in 2013 over ‘IRS tar­get­ing Tea Par­ty’ groups was also used to jus­ti­fy the fur­ther weak­en­ing of cam­paign finance laws in recent years. So the fact that AFF was work­ing with the Koch broth­ers’ Free­dom­Works 2009 to pro­mote the Tea Par­ty high­lights the fact that the ques­tion of whether or not the IRS should have applied scruti­ny to groups apply­ing for 501(c)(4) sta­tus is real­ly a ques­tion of whether or not bil­lion­aire-backed groups like AFF that are clear­ly deeply polit­i­cal enti­ties should be allowed to call them­selves a non­prof­it 501(c)(4) social wel­fare orga­ni­za­tion and get all of the tax and secre­cy ben­e­fits that come with that non­prof­it sta­tus. The Supreme Court may have allowed for unlim­it­ed mon­ey to flow into 501(c)(4)s with the 2010 Cit­i­zens Unit­ed rul­ing, but the deci­sion by reg­u­la­to­ry agen­cies to let bla­tant­ly par­ti­sans enti­ties like AFF pre­tend to be social wel­fare orga­ni­za­tion and obtain that 501(c)(4) sta­tus also plays a crit­i­cal role in intro­duc­ing unlim­it­ed spend­ing on US elec­tion.

The Amer­i­can Future Fund’s For-Hire Cor­po­rate Lob­by­ing Ser­vices And the DCI Group: It’s Anoth­er One of AFF’s ‘Social Wel­fare’ Ser­vices

Talk­ing Points Memo fol­lowed up the above look at AFF the next day with the fol­low­ing arti­cle that point­ed out one of the more egre­gious aspects of AFF’s claim of ‘social wel­fare’ sta­tus: AFF appeared to have ties to DCI Group, a Repub­li­can lob­by­ing firm with a rep­u­ta­tion for for dirty tricks and shady clients like RJ Reynolds Tobac­co and the Burmese Jun­ta:

“Amer­i­can Future Fund (AFF), the shad­owy con­ser­v­a­tive advo­ca­cy group work­ing to under­mine state laws against robo-call­ing, has ties to DCI Group, a Repub­li­can lob­by­ing firm with a rep­u­ta­tion for dirty tricks and shady clients. And a clos­er look at AFF sug­gests the group has been designed to car­ry out polit­i­cal attacks while escap­ing scruti­ny from the press and pub­lic.”

Yep, not only does AFF have ties to DCI Group, described as “a Repub­li­can lob­by­ing firm with a rep­u­ta­tion for dirty tricks and shady clients”, but AFF appears to have been designed to car­ry out polit­i­cal attacks while escap­ing scruti­ny from the press and pub­lic. It’s, again, a reminder Nicole Schlinger’s abil­i­ty to escape scruti­ny isn’t just use­ful in the con­text of the Mol­lie Tib­betts mur­der. Avoid­ing atten­tion and scruti­ny is a core ser­vice of enti­ties like AFF. A ser­vice that requires main­tain­ing its 501(c)(4) sta­tus and the absurd pre­tense that it’s a ‘social wel­fare’ orga­ni­za­tion.

But while AFF was already work­ing in the Koch broth­ers orbit by 2009 — like with its Free­dom­Works Tea Par­ty pro­mo­tion work — it sounds like Karl Rove may have been one of the key peo­ple behind DCI Group.

And DCI Group isn’t just offer­ing ser­vices to polit­i­cal par­ties. It also rep­re­sent­ed clients like the Burmese Jun­ta and devel­oped a fake grass­roots “smok­ers’ rights” cam­paign for RJ Reynolds. And AFF was found to have paid a firm in 2008 for “fundrais­ing work” run by Andrew McKen­na, a for­mer DCI Group senior vice-pres­i­dent:

...

AFF paid $249,000 last year to McKen­na & Asso­ciates for fundrais­ing work, accord­ing to a copy of AFF’s 990 form for 2008 that was obtained by TPM­muck­rak­er. The Arling­ton, Vir­ginia-based firm is run by Andrew McKen­na, a GOP oper­a­tive and for­mer senior vice-pres­i­dent of DCI Group. McKen­na did not imme­di­ate­ly respond to TPMmuckraker’s request for com­ment.DCI Group, a Repub­li­can lob­by­ing and PR shop with close ties to Karl Rove, has rep­re­sent­ed the Burmese jun­ta. In the 1990s, it worked to devel­op “smok­ers’ rights” groups on behalf of RJ Reynolds Tobac­co, and lat­er helped the Bush admin­is­tra­tion gin up fake grass­roots sup­port for pri­va­tiz­ing social secu­ri­ty. A DCI off­shoot, FLS Con­nect, recent­ly announced it would con­duct an inter­nal audit after its seedy fundrais­ing tech­niques were exposed by TPM­muck­rak­er and oth­ers. FLS also launched its own robo-call attacks against Barack Oba­ma last fall, that were so vicious and mis­lead­ing that they were denounced even by some Repub­li­cans.

...

RJ Reynolds and the Burmese Jun­ta. DCI Group is that kind of enti­ty. Snd while the above arti­cle described how AFF hired a con­sult­ing firms run by a DCI Group for­mer senior vice pres­i­dent in 2008 for fundrais­ing work, as we’re going to see below, DCI Group actu­al­ly hired AFF to run lob­by­ing cam­paigns on behalf of DCI’s cor­po­rate clients. In par­tic­u­lar, AFF was hired to run a lob­by­ing cam­paign in Puer­to Rico on behalf of Doral Finan­cial Group at the same time DCI Group was lob­by­ing for Doral. DCI Group denied it sub­con­tract­ed AFF to do this work. We’ll look at that scheme more lat­er on.

The Roots of the Amer­i­can Future Fund: Willie Hor­ton Meets the Swift Boaters

But AFF’s asso­ci­a­tions to the peo­ple behind DCI Group is far from the only col­lec­tion of the AFF’s ties to eth­i­cal­ly dubi­ous hyper-par­ti­sans. As the fol­low­ing pro­file of the Amer­i­can Future Fund in the Iowa Inde­pen­dent (avail­able via the Way­back Machine) informs us, some the key fig­ures behind AFF itself include peo­ple involved with both the 2004 “Swift­boat” smear ads against John Ker­ry in 2004 and the 1988 racist Willie Hor­ton ads used by George H. W. Bush against Michael Dukakis.

Specif­i­cal­ly, the piece points out that Ben Gins­berg — the for­mer chief out­side coun­sel to the Bush-Cheney 2004 cam­paign who resigned after it was revealed that he was also pro­vid­ing advice to Swift Boat Vet­er­ans for Truth — was AFF’s legal coun­cil. In addi­tion, AFF’s media strate­gist was Lar­ry McCarthy, the guy who pro­duced the 1988 Willie Hor­ton ad.

The pro­file is from 2008, the year the AFF formed, and is a par­tic­u­lar­ly impor­tant report on the AFF at the time giv­en that almost noth­ing was list­ed on its web­site about its lead­er­ship and who was fund­ing it.

What the arti­cle does­n’t list is who exact­ly was financ­ing AFF at this time. The arti­cle also describes how it is that AFF was able to oper­ate with so lit­tle known about who is financ­ing it: AFF claims to be a “social wel­fare orga­ni­za­tion”, mak­ing it a 501(c)(4) enti­ty under the US tax code. And thanks to var­i­ous loop­holes in US cam­paign finance laws — loop­holes that pre­date the noto­ri­ous 2010 Cit­i­zens Unit­ed Supreme Court rul­ing — as long as an orga­ni­za­tion does­n’t spend the major­i­ty of its funds on polit­i­cal advo­ca­cy and as long as its polit­i­cal ads avoid cer­tain things (like explic­it­ly say­ing to vote for a cer­tain can­di­date), that orga­ni­za­tion can large­ly avoid US cam­paign finance laws and keep its donors entire­ly secret. Which is exact­ly how AFF oper­ates: In the dark, hid­ing behind the pre­tense that it’s a “social wel­fare” orga­ni­za­tion.

And as we’re going to see in sub­se­quent arti­cle excerpts, the secret donors behind the AFF went from the Koch broth­ers (who were almost entire­ly fund­ing the group by 2012), then shift­ed to Karl Rove’s fundrais­ing net­work and oth­er Repub­li­can estab­lish­ment donors, includ­ing the Repub­li­can House lead­er­ship. In oth­er words, the AFF isn’t just any ‘ol shady 501(c)(4) dark mon­ey enti­ty. It’s been qui­et­ly one of the key dark mon­ey enti­ties used by some of the most pow­er­ful forces behind the Repub­li­can par­ty. It’s, again, why the con­nec­tion between Nicole Schlinger and the AFF is poten­tial­ly such a sen­si­tive sto­ry. The sto­ry of the AFF is the sto­ry of the rise of the ascen­dance of dark mon­ey in US pol­i­tics:

Iowa Inde­pen­dent Secrets of the Amer­i­can Future Fund

Iowa-based con­ser­v­a­tive advo­ca­cy group includes mas­ter­minds of Swift Boat and Willie Hor­ton ads By Jason Han­cock 8/19/08 12:29 PM A net­work of Iowa Repub­li­cans is play­ing a lead­ing role in a secre­tive group advo­cat­ing nation­al­ly on behalf of “con­ser­v­a­tive and free mar­ket ideals” in con­gres­sion­al races around the coun­try. Among the group’s lead­ers are two media con­sul­tants who played key roles in the Swift Boat Vet­er­ans for Truth ads in 2004 and the Willie Hor­ton ad in 1988, both of which helped defeat Demo­c­ra­t­ic pres­i­den­tial can­di­dates. The Amer­i­can Future Fund (AFF), oper­at­ing out of Des Moines, is spon­sor­ing advo­ca­cy adver­tise­ments in close­ly con­test­ed con­gres­sion­al races from New York to Louisiana to Min­neso­ta and Col­orado. It is one of the most ambi­tious con­ser­v­a­tive inde­pen­dent expen­di­ture groups to emerge in 2008. Most observers expect AFF to begin increas­ing its role in elec­tions around the coun­try, stok­ing spec­u­la­tion that it will spend heav­i­ly to prop up light­ly fund­ed Repub­li­can cam­paign com­mit­tees. Because of the way the group is orga­nized under Inter­nal Rev­enue Ser­vice guide­lines for non­prof­it orga­ni­za­tions it does not have to dis­close its donors and is not gov­erned by the Fed­er­al Elec­tion Com­mis­sion (FEC). But an Iowa Inde­pen­dent inves­ti­ga­tion has found the group has deep roots in state Repub­li­can pol­i­tics. And, unlike MoveOn.org, a sim­i­lar group advo­cat­ing lib­er­al caus­es, it’s hard to deter­mine who is actu­al­ly behind the AFF. The key play­ers include: Nicole Schlinger, the group’s pres­i­dent, the for­mer exec­u­tive direc­tor of the Repub­li­can Par­ty of Iowa. Tim Albrecht, a for­mer spokesman for Repub­li­cans in the Iowa House who worked for Mitt Romney’s pres­i­den­tial cam­paign and spent a short time this year work­ing for the Repub­li­can Par­ty of Iowa, is the group’s com­mu­ni­ca­tions direc­tor. David Kochel, anoth­er for­mer state GOP exec­u­tive direc­tor and a senior advis­er to the Rom­ney cam­paign, who has served as spokesman for AFF, although Albrecht said he is no longer asso­ci­at­ed with the group. The Wash­ing­ton Post report­ed in March – and Albrecht con­firmed to Iowa Inde­pen­dent — that Ben Gins­berg, of the high-pow­ered D.C. law firm Pat­ton Bog­gs, is the group’s legal coun­sel. Gins­berg resigned as chief out­side coun­sel to the Bush-Cheney cam­paign in August 2004 when it was revealed that he was also pro­vid­ing advice to Swift Boat Vet­er­ans for Truth, a group that spon­sored error-laden attacks on the mil­i­tary ser­vice record of 2004 Demo­c­ra­t­ic pres­i­den­tial nom­i­nee John Ker­ry. Lar­ry McCarthy, pres­i­dent of D.C.-based media firm McCarthy Mar­cus Hen­nings, is AFF’s media strate­gist. In 1988, McCarthy pro­duced the infa­mous, racial­ly tinged Willie Hor­ton tele­vi­sion ad that helped then-Vice Pres­i­dent George H.W. Bush bury Michael Dukakis under charges that he was soft on crime. Pub­lic records show the AFF also has con­nec­tions to Iowa busi­ness­man Bruce Rastet­ter, who is wide­ly believed to be con­sid­er­ing a run for gov­er­nor in 2010. Rastet­ter is a reg­u­lar donor to the Repub­li­can Par­ty and founder of Hawk­eye Renew­ables, the fourth largest ethanol pro­duc­er in the nation. Eric Peter­son, busi­ness man­ag­er at Sum­mit Farms, anoth­er of Rastetter’s com­pa­nies, is list­ed on doc­u­ments filed with the Iowa Sec­re­tary of State’s office as pres­i­dent, sec­re­tary and direc­tor of Iowa Future Fund, a con­ser­v­a­tive non­prof­it that essen­tial­ly mor­phed into Amer­i­can Future Fund. The address list­ed on an AFF ad buy in Min­neso­ta is a post office box used by Nick Ryan, a Des Moines lob­by­ist who works pri­mar­i­ly for Rastetter’s com­pa­nies and who served as cam­paign man­ag­er for 2006 Repub­li­can guber­na­to­r­i­al can­di­date Jim Nus­sle. In Feb­ru­ary, Ryan was act­ing as spokesman for Hawk­eye Renew­ables when 29,000 gal­lons of ethanol was acci­den­tal­ly spilled at the company’s Iowa Falls plant. The many faces of AFF The Iowa Future Fund, tech­ni­cal­ly the first incar­na­tion of AFF, gained pub­lic atten­tion in March when it ran a series of tele­vi­sion and radio ads accus­ing Gov. Chet Cul­ver of increas­ing spend­ing by 20 per­cent over the past two years and rais­ing tax­es and fees by $100 mil­lion. “Cul­ver rais­es tax­es and spends more mon­ey and wants to use your tax dol­lars to ben­e­fit Microsoft,” the ad’s nar­ra­tor said, refer­ring to a tax pack­age that Cul­ver backed and that the leg­is­la­ture passed geared to lure com­pa­nies like Microsoft Corp. and Google to the state. The Iowa Demo­c­ra­t­ic Par­ty filed a com­plaint with the Iowa Ethics and Cam­paign Dis­clo­sure Board to deter­mine whether the ads con­sti­tut­ed polit­i­cal adver­tis­ing, which would require dis­clo­sure of the group’s donors. Char­lie Smith­son, exec­u­tive direc­tor of the Iowa Ethics Cam­paign and Dis­clo­sure Board, said the com­plaint has not yet been ful­ly set­tled. “It is still under inves­ti­ga­tion,” he said. “The deter­mi­na­tion was made that it did not vio­late the state cam­paign laws because it did not ‘express­ly advo­cate’ for or against Gov. Cul­ver or a clear­ly iden­ti­fied can­di­date for office. The issue the Board is now look­ing at is whether any of the state lob­by­ing laws were trig­gered.” The next Ethics Board meet­ing is Aug. 28. In April, Iowa Future Fund effec­tive­ly split into two groups: AFF, which focus­es on fed­er­al races around the coun­try, and the Iowa Progress Project, which puts its resources toward state issues. Albrecht said AFF and Iowa Future Fund “are com­plete­ly unre­lat­ed.” But they share an orga­ni­za­tion­al his­to­ry. AFF and IFF were incor­po­rat­ed on the same day by the same Vir­ginia law firm. David Kochel served for a time as spokesman for IFF and AFF before becom­ing pres­i­dent of Iowa Progress Project. In March, an ad run by AFF in the race between Demo­c­rat Al Franken and Repub­li­can Sen. Norm Cole­man for Minnesota’s U.S. Sen­ate seat caused the state’s Demo­c­ra­t­ic-Farmer-Labor­Par­ty to file a for­mal com­plaint with the FEC alleg­ing that the group vio­lat­ed fed­er­al elec­tion law and that its ads con­sti­tute bla­tant elec­toral advo­ca­cy. “The Amer­i­can Future Fund is a shad­owy non­prof­it orga­ni­za­tion,” the com­plaint said. “It pur­ports to be exempt from tax under sec­tion 501(c)(4) of the Inter­nal Rev­enue Code. But its notion of ‘pro­mot­ing the social wel­fare’ is to send valen­tines to elec­toral­ly trou­bled Repub­li­can Sen­ate can­di­dates. The Com­mis­sion should take imme­di­ate steps to enforce the law and expose this group’s secret financ­ing to light of day.” Under fed­er­al elec­tion law, the orga­ni­za­tion is pro­hib­it­ed from engag­ing sole­ly in “express advo­ca­cy,” which would include ask­ing vot­ers to vote for or against a cer­tain can­di­date. But so long as the ad hasn’t been coor­di­nat­ed with a cam­paign and doesn’t out­right say “vote for” or “vote against,” it is not con­sid­ered express advo­ca­cy, accord­ing to Paul S. Ryan, FEC pro­gram direc­tor for the Cam­paign Legal Cen­ter, a Wash­ing­ton, D.C.-based orga­ni­za­tion. “An orga­ni­za­tion that is care­ful about how it writes the script of its ad can fly under the radar or stay out­side of the net of cam­paign finance activ­i­ty,” he said. The ad in ques­tion didn’t ask vot­ers to vote for Cole­man, but rather asked vot­ers to “call Norm Cole­man and thank him for his agen­da for Min­neso­ta.” In 2004, sev­er­al groups filed com­plaints against so-called inde­pen­dent expen­di­ture com­mit­tees say­ing they ignored cam­paign finance law. It took the FEC two years to rule on the com­plaints. In the end, the groups had to pay less than 2 per­cent of the fund they ille­gal­ly raised and spent. Brad Smith, a for­mer chair­man of the FEC and cur­rent­ly a pro­fes­sor of law at Cap­i­tal Uni­ver­si­ty Law School in Colum­bus, Ohio, said that if a group’s “major pur­pose” is not try­ing to affect elec­tions, “they are not reg­u­lat­ed by the FEC.” But Smith added the def­i­n­i­tion of “major pur­pose” is not clear, which could open the door for some non­prof­it groups to face a chal­lenge on their tax sta­tus. “I think there would be an open­ing for some­one who want­ed to pros­e­cute a group who is spend­ing mil­lions of dol­lars on adver­tis­ing,” said Smith, a Repub­li­can who has been a vocal crit­ic of cam­paign finance reform. Albrecht said there is no valid­i­ty to claims that AFF is any­thing but an issues-focused orga­ni­za­tion. “We are an issues orga­ni­za­tion,” he said. “That is evi­dent by the things that are promi­nent­ly dis­played on our Web site and in our work.” ... Albrecht said AFF is sim­ply a reac­tion to lib­er­al groups like MoveOn.org who have dom­i­nat­ed this realm of pol­i­tics for years. “For far too long the left has been on the field with no oppo­si­tion,” he said. “Amer­i­can Future Fund has said it’s time to play ball. We’re not going to sit on the side­lines any longer. It’s impor­tant for free mar­ket, con­ser­v­a­tive prin­ci­ples to be high­light­ed in pub­lic, and that’s what we intend to do.” The dif­fer­ence is that MoveOn.org, a decade-old lib­er­al group, iden­ti­fies its lead­er­ship on its Web site, boasts more than a mil­lion mem­bers and nev­er shies away from the spot­light as a means for ampli­fy­ing its mes­sage. AFF is decid­ed­ly low­er-pro­file, dis­clos­ing noth­ing about its lead­ers, his­to­ry or mem­ber­ship on its Web site, and it makes lit­tle or no effort on pub­lic appear­ances, press con­fer­ences and media book­ings. ... ———– “Secrets of the Amer­i­can Future Fund” by Jason Han­cock; Iowa Inde­pen­dent; 08/19/2008

“Because of the way the group is orga­nized under Inter­nal Rev­enue Ser­vice guide­lines for non­prof­it orga­ni­za­tions it does not have to dis­close its donors and is not gov­erned by the Fed­er­al Elec­tion Com­mis­sion (FEC).”

That’s one of the core ele­ments of the scan­dalous nature of the Amer­i­can Future Fund: it’s able to do what it does in secret by sim­ply orga­niz­ing itself in a way that tech­ni­cal­ly makes it a non­prof­it orga­ni­za­tion. A non­prof­it enti­ty that tried to water-down robo-call­ing reg­u­la­tions in 2009 in antic­i­pa­tion of its planned 2010 par­ti­san robo-call­ing cam­paign on behalf of Repub­li­can can­di­dates.

And the AFF is typ­i­cal, at least in terms of exploit­ing these 501(c)(4) rules. But it’s not typ­i­cal in terms of who was behind it at its incep­tion. As we saw, it was a who’s who of Iowa’s Repub­li­can estab­lish­ment:

...

A net­work of Iowa Repub­li­cans is play­ing a lead­ing role in a secre­tive group advo­cat­ing nation­al­ly on behalf of “con­ser­v­a­tive and free mar­ket ideals” in con­gres­sion­al races around the coun­try. Among the group’s lead­ers are two media con­sul­tants who played key roles in the Swift Boat Vet­er­ans for Truth ads in 2004 and the Willie Hor­ton ad in 1988, both of which helped defeat Demo­c­ra­t­ic pres­i­den­tial can­di­dates. ... But an Iowa Inde­pen­dent inves­ti­ga­tion has found the group has deep roots in state Repub­li­can pol­i­tics. And, unlike MoveOn.org, a sim­i­lar group advo­cat­ing lib­er­al caus­es, it’s hard to deter­mine who is actu­al­ly behind the AFF. The key play­ers include: Nicole Schlinger, the group’s pres­i­dent, the for­mer exec­u­tive direc­tor of the Repub­li­can Par­ty of Iowa. Tim Albrecht, a for­mer spokesman for Repub­li­cans in the Iowa House who worked for Mitt Romney’s pres­i­den­tial cam­paign and spent a short time this year work­ing for the Repub­li­can Par­ty of Iowa, is the group’s com­mu­ni­ca­tions direc­tor. David Kochel, anoth­er for­mer state GOP exec­u­tive direc­tor and a senior advis­er to the Rom­ney cam­paign, who has served as spokesman for AFF, although Albrecht said he is no longer asso­ci­at­ed with the group. ... Pub­lic records show the AFF also has con­nec­tions to Iowa busi­ness­man Bruce Rastet­ter, who is wide­ly believed to be con­sid­er­ing a run for gov­er­nor in 2010. Rastet­ter is a reg­u­lar donor to the Repub­li­can Par­ty and founder of Hawk­eye Renew­ables, the fourth largest ethanol pro­duc­er in the nation. Eric Peter­son, busi­ness man­ag­er at Sum­mit Farms, anoth­er of Rastetter’s com­pa­nies, is list­ed on doc­u­ments filed with the Iowa Sec­re­tary of State’s office as pres­i­dent, sec­re­tary and direc­tor of Iowa Future Fund, a con­ser­v­a­tive non­prof­it that essen­tial­ly mor­phed into Amer­i­can Future Fund. The address list­ed on an AFF ad buy in Min­neso­ta is a post office box used by Nick Ryan, a Des Moines lob­by­ist who works pri­mar­i­ly for Rastetter’s com­pa­nies and who served as cam­paign man­ag­er for 2006 Repub­li­can guber­na­to­r­i­al can­di­date Jim Nus­sle. In Feb­ru­ary, Ryan was act­ing as spokesman for Hawk­eye Renew­ables when 29,000 gal­lons of ethanol was acci­den­tal­ly spilled at the company’s Iowa Falls plant.

...

Note that Iowa busi­ness­man Bruce Rastet­ter was char­ac­ter­ized in 2015 by Politi­co as Iowa’s GOP “King­mak­er”. Don’t for­get the out­sized impor­tance Iowa has in Amer­i­can pol­i­tics with the ear­ly Iowa caus­es in the pri­maries. So being an Iowan GOP king­mak­er is an extra big deal in Amer­i­can pol­i­tics.

And then there were the two peo­ple that don’t appear to be based in Iowa but who had his­to­ries in the dark arts of polit­i­cal com­mu­ni­ca­tion: Ben Gins­berg (Swift Boat smears) and Lar­ry McCarthy (Willie Hor­ton race-bait­ing):

...

The Wash­ing­ton Post report­ed in March – and Albrecht con­firmed to Iowa Inde­pen­dent — that Ben Gins­berg, of the high-pow­ered D.C. law firm Pat­ton Bog­gs, is the group’s legal coun­sel. Gins­berg resigned as chief out­side coun­sel to the Bush-Cheney cam­paign in August 2004 when it was revealed that he was also pro­vid­ing advice to Swift Boat Vet­er­ans for Truth, a group that spon­sored error-laden attacks on the mil­i­tary ser­vice record of 2004 Demo­c­ra­t­ic pres­i­den­tial nom­i­nee John Ker­ry. Lar­ry McCarthy, pres­i­dent of D.C.-based media firm McCarthy Mar­cus Hen­nings, is AFF’s media strate­gist. In 1988, McCarthy pro­duced the infa­mous, racial­ly tinged Willie Hor­ton tele­vi­sion ad that helped then-Vice Pres­i­dent George H.W. Bush bury Michael Dukakis under charges that he was soft on crime.

...

Note that it was April of 2008 that the AFF offi­cial­ly formed. But it real­ly was just the result of the Iowa Future Fund split­ting its fed­er­al and state oper­a­tions into the AFF (fed­er­al) and the Iowa Progress Project (state). So the AFF real­ly pre­dates 2008 and it’s also a reflec­tion of the nation­al ambi­tions of this group of Iowa Repub­li­cans.

Of course, as we’ll see, it’s also a vehi­cle for laun­der­ing nation­al GOP estab­lish­ment mon­ey by mega-donors like the Koch net­work and Karl Rove’s donor net­work. So whether or not the AFF pri­mar­i­ly rep­re­sent­ed the nation­al ambi­tions of ‘King­mak­er’ Bruce Rastet­ter or whether it was act­ing as a laun­der­ing out­fit for nation­al enti­ties like the Kochs and Rove from the start is an inter­est­ing ques­tion. But regard­less of how it start­ed, The AFF has clear­ly become a laun­der­ing enti­ty for GOP mega-donors at this point:

...

The many faces of AFF The Iowa Future Fund, tech­ni­cal­ly the first incar­na­tion of AFF, gained pub­lic atten­tion in March when it ran a series of tele­vi­sion and radio ads accus­ing Gov. Chet Cul­ver of increas­ing spend­ing by 20 per­cent over the past two years and rais­ing tax­es and fees by $100 mil­lion. ... In April, Iowa Future Fund effec­tive­ly split into two groups: AFF, which focus­es on fed­er­al races around the coun­try, and the Iowa Progress Project, which puts its resources toward state issues. Albrecht said AFF and Iowa Future Fund “are com­plete­ly unre­lat­ed.” But they share an orga­ni­za­tion­al his­to­ry. AFF and IFF were incor­po­rat­ed on the same day by the same Vir­ginia law firm. David Kochel served for a time as spokesman for IFF and AFF before becom­ing pres­i­dent of Iowa Progress Project.

...

And from the very begin­ning, the mer­ce­nary AFF main­tained a pre­tense of being a “social wel­fare” advo­ca­cy group. Because that absurd non­prof­it pre­tense is what’s required to qual­i­fy as a 501(c)(4) enti­ty and avoid report­ing donors to the FEC and avoid scruti­ny by the IRS:

...

In March, an ad run by AFF in the race between Demo­c­rat Al Franken and Repub­li­can Sen. Norm Cole­man for Minnesota’s U.S. Sen­ate seat caused the state’s Demo­c­ra­t­ic-Farmer-Labor­Par­ty to file a for­mal com­plaint with the FEC alleg­ing that the group vio­lat­ed fed­er­al elec­tion law and that its ads con­sti­tute bla­tant elec­toral advo­ca­cy. “The Amer­i­can Future Fund is a shad­owy non­prof­it orga­ni­za­tion,” the com­plaint said. “It pur­ports to be exempt from tax under sec­tion 501(c)(4) of the Inter­nal Rev­enue Code. But its notion of ‘pro­mot­ing the social wel­fare’ is to send valen­tines to elec­toral­ly trou­bled Repub­li­can Sen­ate can­di­dates. The Com­mis­sion should take imme­di­ate steps to enforce the law and expose this group’s secret financ­ing to light of day.” Under fed­er­al elec­tion law, the orga­ni­za­tion is pro­hib­it­ed from engag­ing sole­ly in “express advo­ca­cy,” which would include ask­ing vot­ers to vote for or against a cer­tain can­di­date. But so long as the ad hasn’t been coor­di­nat­ed with a cam­paign and doesn’t out­right say “vote for” or “vote against,” it is not con­sid­ered express advo­ca­cy, accord­ing to Paul S. Ryan, FEC pro­gram direc­tor for the Cam­paign Legal Cen­ter, a Wash­ing­ton, D.C.-based orga­ni­za­tion. “An orga­ni­za­tion that is care­ful about how it writes the script of its ad can fly under the radar or stay out­side of the net of cam­paign finance activ­i­ty,” he said. The ad in ques­tion didn’t ask vot­ers to vote for Cole­man, but rather asked vot­ers to “call Norm Cole­man and thank him for his agen­da for Min­neso­ta.” In 2004, sev­er­al groups filed com­plaints against so-called inde­pen­dent expen­di­ture com­mit­tees say­ing they ignored cam­paign finance law. It took the FEC two years to rule on the com­plaints. In the end, the groups had to pay less than 2 per­cent of the fund they ille­gal­ly raised and spent.

...

The whole absurd sit­u­a­tion is exem­pli­fied by the quote from Tim Albrecht, AFF’s found­ing com­mu­ni­ca­tions direc­tor, who declared “We are an issues orga­ni­za­tion, that is evi­dent by the things that are promi­nent­ly dis­played on our Web site and in our work,” while ref­er­enc­ing a web­site that dis­closed noth­ing about its lead­ers, his­to­ry or mem­ber­ship. It’s a bla­tant black box squawk­ing about how trans­par­ent it is. And it is trans­par­ent in the sense that it’s trans­par­ent­ly opaque:

...

Albrecht said there is no valid­i­ty to claims that AFF is any­thing but an issues-focused orga­ni­za­tion. “We are an issues orga­ni­za­tion,” he said. “That is evi­dent by the things that are promi­nent­ly dis­played on our Web site and in our work.” ... Albrecht said AFF is sim­ply a reac­tion to lib­er­al groups like MoveOn.org who have dom­i­nat­ed this realm of pol­i­tics for years. “For far too long the left has been on the field with no oppo­si­tion,” he said. “Amer­i­can Future Fund has said it’s time to play ball. We’re not going to sit on the side­lines any longer. It’s impor­tant for free mar­ket, con­ser­v­a­tive prin­ci­ples to be high­light­ed in pub­lic, and that’s what we intend to do.” The dif­fer­ence is that MoveOn.org, a decade-old lib­er­al group, iden­ti­fies its lead­er­ship on its Web site, boasts more than a mil­lion mem­bers and nev­er shies away from the spot­light as a means for ampli­fy­ing its mes­sage. AFF is decid­ed­ly low­er-pro­file, dis­clos­ing noth­ing about its lead­ers, his­to­ry or mem­ber­ship on its Web site, and it makes lit­tle or no effort on pub­lic appear­ances, press con­fer­ences and media book­ings.

...

And note how the AFF was expect­ed to become a nation­al play­er in elec­tions with heavy spend­ing back in 2008. It was obvi­ous­ly backed by big mon­ey despite the lack of dis­clo­sure. The writ­ing was on the wall from the begin­ning:

...

The Amer­i­can Future Fund (AFF), oper­at­ing out of Des Moines, is spon­sor­ing advo­ca­cy adver­tise­ments in close­ly con­test­ed con­gres­sion­al races from New York to Louisiana to Min­neso­ta and Col­orado. It is one of the most ambi­tious con­ser­v­a­tive inde­pen­dent expen­di­ture groups to emerge in 2008. Most observers expect AFF to begin increas­ing its role in elec­tions around the coun­try, stok­ing spec­u­la­tion that it will spend heav­i­ly to prop up light­ly fund­ed Repub­li­can cam­paign com­mit­tees.

...

So the Amer­i­can Future Fund was clear­ly a tool of the Iowan Repub­li­can estab­lish­ment when it was set up in 2008 and was already work­ing close­ly with peo­ple involved with the Rove-con­nect­ed DCI group by 2009, dur­ing Nicole Schlinger’s tenure as AFF’s pres­i­dent and “prin­ci­pal offi­cer”. The AFF was lit­er­al­ly a right-wing ‘social wel­fare nonprofit’-for-hire in the pre-Cit­i­zen’s Unit­ed era.

Cit­i­zens Unit­ed: More Steroids for 501(c)(4)s That Were Already on Steroids

But as we’re going to see, it was 2010 when the AFF’s abil­i­ty to influ­ence US pol­i­tics explod­ed. More so. 2010 is of course the year when the poten­tial influ­ence of all 501(c)(4)s ‘social wel­fare non­prof­it’ enti­ties explod­ed in the US thanks, of course, to the Cit­i­zens Unit­ed Supreme Court rul­ing. But as we saw from the above review of the AFF’s pre-Cit­i­zens Unit­ed days, the sit­u­a­tion for 501(c)(4) orga­ni­za­tions was already absured. Cor­po­rate mer­ce­nary enti­ties like the AFF could already claim ‘social wel­fare non­prof­it’ sta­tus and their donors did­n’t need to be dis­closed.

So what did Cit­i­zens Unit­ed change? Sad­ly, not as much as Amer­i­cans often assume, which is reflec­tion of how long the dys­func­tion­al influ­ence of mon­ey in US pol­i­tics has been the norm. The biggest change is that cor­po­ra­tions and unions can now donate direct­ly to 501(c)(4)s, which was pre­vi­ous­ly banned. So, pre-Cit­i­zens Unit­ed, the 501(c)(4) enti­ties could take unlim­it­ed amounts of mon­ey from indi­vid­u­als like the Koch broth­ers but not direct­ly for the Kochs’ cor­po­ra­tions. Post-Cit­i­zens Unit­ed, the Kochs and their cor­po­rate enti­ties could all donate as much as they want­ed. And the source of that spend­ing would all remain a secret as long as they suc­cess­ful­ly pre­tend­ed to be social wel­fare non­prof­its.

So what do 501(4)©s need to do in order main­tain that “social non­prof­it” pre­tense? Don’t spend a major­i­ty of their mon­ey on open advo­ca­cy for or against a can­di­date. But spend­ing 49.9999% of their mon­ey on attack ads is fine. As long as they spend the rest of their mon­ey on “social wel­fare”. And issue ads that don’t talk about a can­di­date (like an ad that extolls the virtues of low tax­es on bil­lion­aires) count as “social wel­fare” spend­ing. So as long as an enti­ty like the AFF spends 50% + 1 dol­lars on issue ads instead of attack ads, it can claim to be a social wel­fare non­prof­it with full secre­cy pro­tec­tions for donors with no caps on the dona­tions.

In oth­er words, when the Kochs give $10 mil­lion to one of their 501(c)(4) groups like the AFF or Amer­i­cans For Pros­per­i­ty, that’s seen as basi­cal­ly char­i­ty under the tax code and unlim­it­ed funds can be poured into them with­out dis­clo­sure. And what makes an enti­ty like the AFF so notable in this land­scape is that a group like Amer­i­cans For Pros­per­i­ty is obvi­ous­ly backed by the Kochs. They start­ed it and fund it. The AFF, on the oth­er hand, is much more mer­ce­nary in nature than Amer­i­cans for Pros­per­i­ty. Maybe the Kochs and their net­work are pri­mar­i­ly financ­ing the AFF’s activ­i­ties at some point. Or maybe it’s Karl Rove and his non-Koch ‘estab­lish­ment’ net­work. Or per­haps the DCI Group is sub-con­tract­ing AFF’s ser­vices. It’s a for-hire enti­ty of choice for a num­ber of dif­fer­ent clients. And that ambi­gu­i­ty is part of why mer­ce­nary groups like the AFF are poten­tial­ly so use­ful for how mega-donors influ­ence pol­i­tics with big dona­tions in secret. Even when they have to dis­close how much they’ve spent, they don’t have to say who paid for it and it’s not always obvi­ous who their clients are because they have lots lf dif­fer­ent clients.

The fol­low­ing arti­cle also describes one of the key loop­holes 501(c)(4)s must jump through in order to main­tain the pre­tense that their “issue ads” aren’t actu­al­ly polit­i­cal ads designed to influ­ence an elec­tion which is all part of the “social wel­fare” facade. It all goes back to the 1976 Supreme Court deci­sion of Buck­ley v. Valeo, where the court spec­u­lat­ed in a foot­note that there were cer­tain phras­es that would make it clear that an ad was a cam­paign ad (designed to influ­ence the out­come of an elec­tion) and not an issue ad. Those phras­es — “vote for,” “elect,” “sup­port,” “cast your bal­lot for,” “Smith for Con­gress,” “vote against,” “defeat,” and “reject” — became known as the “mag­ic words” that 501(c)(4)s need­ed to avoid in their ‘issue ads’ being declared cam­paign ads. Don’t for­get that 501(c)(4)s can’t get caught spend­ing a major­i­ty of their funds on cam­paign ads (but 49.999% is fine). So the “mag­ic words” became an impor­tant guide­line that helped keep “social wel­fare” sham of secret unlim­it­ed cam­paign spend­ing going in US pol­i­tics for the past four decades.

As the arti­cle notes, the IRS still has the pow­er to revoke a 501(c)(4) enti­ty’s non­prof­it sta­tus if it deter­mines the enti­ty is pri­mar­i­ly engaged in cam­paign­ing even if the enti­ty avoids those “mag­ic words”. The IRS now says it looks at the “the facts and cir­cum­stances” of a 501(c)(4)‘s ad. But in prac­tice that rarely hap­pens because IRS audits of 501(4)©s almost nev­er hap­pen in the first place. So explo­sion of ‘dark mon­ey’ in US pol­i­tics is simul­ta­ne­ous­ly root­ed in an absurd set of rules that, if fol­lowed, make reg­u­la­tor scruti­ny much less like­ly cou­pled with the real­i­ty that the reg­u­la­tors are bare­ly scru­ti­niz­ing any­thing in the first place. It’s a full-spec­trum sham:

Front­line The Rules That Gov­ern 501(c)(4)s Octo­ber 30, 2012

by Emma Schwartz Near­ly a cen­tu­ry ago, Con­gress cre­at­ed the com­pli­cat­ed legal frame­work that gov­erns these tax-exempt non­prof­its, also known as 501(c)(4)s for the part of the tax code they fall under. That rule said they were sup­posed to oper­ate “exclu­sive­ly for the pro­mo­tion of social wel­fare” — a def­i­n­i­tion that includes groups rang­ing from local fire depart­ments to the Sier­ra Club to the Nation­al Right to Life Com­mit­tee. While these non­prof­its have always been allowed to lob­by for change, in 1959, reg­u­la­tors opened the door to polit­i­cal activ­i­ty by inter­pret­ing “exclu­sive­ly” to mean that groups had to be “pri­mar­i­ly” engaged in social wel­fare and help­ing the com­mu­ni­ty. But reg­u­la­tors nev­er defined exact­ly how they would mea­sure this bal­ance. Part of the rea­son, said Mar­cus Owens, a for­mer head of the IRS divi­sion over­see­ing non­prof­its, is because the IRS didn’t want to lim­it what it could eval­u­ate in decid­ing what was polit­i­cal activ­i­ty. How­ev­er, the lack of clar­i­ty has cre­at­ed a unique type of orga­ni­za­tion when it comes to pol­i­tics — chief among those dif­fer­ences being what the pub­lic must be told about these non­prof­its’ donors. Why Don’t 501(c)(4)s Have to Dis­close Their Donors? Social wel­fare non­prof­its don’t fall under the Fed­er­al Elec­tion Commission’s stan­dard def­i­n­i­tion of a polit­i­cal com­mit­tee, which, under FEC guide­lines, must dis­close its donors. Because 501(c)(4)s say their pri­ma­ry pur­pose is social wel­fare, they can keep their donors secret. The only excep­tion is if some­one gives them mon­ey and specif­i­cal­ly states the funds are for a polit­i­cal ad. And unlike polit­i­cal com­mit­tees, social wel­fare non­prof­its have a legal right to keep their donors secret. That stems from the land­mark 1958 Supreme Court case, NAACP v. Alaba­ma, which held the NAACP didn’t have to iden­ti­fy its mem­bers because dis­clo­sure could lead to harass­ment. Fast for­ward to the post-Cit­i­zens Unit­ed world of cam­paign finance where out­side groups can now spend unlim­it­ed amounts of mon­ey to influ­ence elec­tions so long as they are inde­pen­dent of can­di­dates. See­ing the advan­tages offered by groups that can engage in polit­i­cal activ­i­ty while keep­ing their donors secret, both Democ­rats and Repub­li­cans have seized onto this open­ing in the tax code. That’s why in recent years, many new 501(c)(4)s have popped up right before the elec­tion sea­son, focus­ing heav­i­ly on tele­vi­sion adver­tis­ing, usu­al­ly attack­ing, though some­times pro­mot­ing, can­di­dates run­ning for office. These non­prof­its do have to report some of their activ­i­ties to the FEC. When they run ads direct­ly advo­cat­ing for the elec­tion or defeat of a can­di­date, they have to tell reg­u­la­tors how much and what they spend mon­ey on — but not where the mon­ey comes from. Since they can’t make these types of ads their sole activ­i­ty, many 501(c)(4)s focus on so-called issue ads, which they only have to report to the FEC in defined win­dows before an elec­tion. The Debate Over “Issue Ads” But what exact­ly defines an issue ad? The key start­ing point is a 1976 Supreme Court case, Buck­ley v. Valeo, in which the court spec­u­lat­ed in a foot­note that if cer­tain words were used in an ad, it was clear­ly a cam­paign ad. The eight phras­es list­ed in the foot­note –“vote for,” “elect,” “sup­port,” “cast your bal­lot for,” “Smith for Con­gress,” “vote against,” “defeat,” and “reject” — became known as the “mag­ic words” and for decades served as a bright line test between an issue ad and a cam­paign ad. But many cam­paign finance reform­ers saw that dis­tinc­tion as a sham, espe­cial­ly as increas­ing amounts of fed­er­al cam­paign dol­lars head­ed to polit­i­cal par­ties where the soft mon­ey loop­hole allowed unlim­it­ed mon­ey to be spent on issue ads. While avoid­ing the mag­ic words, these issue ads typ­i­cal­ly focused on one can­di­date run­ning for office and ran just before an elec­tion. In oth­er words, the reform­ers argued, they were clear­ly try­ing to influ­ence elec­tions. The reform­ers tried to address this loop­hole in the Bipar­ti­san Cam­paign Finance Reform Act of 2002, oth­er­wise known as the McCain-Fein­gold bill. In a 2003 case, McConnell v. FEC, the Supreme Court appeared to agree, say­ing that the mag­ic words were “func­tion­al­ly mean­ing­less.” But the deci­sion didn’t bar states from using the mag­ic words and the court has since backed away from its ear­li­er stance. And so legal debate con­tin­ues. For instance, ear­li­er this year, the Col­orado Supreme Court upheld the mag­ic words test as the bright line between issue ads and direct cam­paign ads. Today, both the FEC and the IRS use tests broad­er than just the mag­ic words to deter­mine what counts as an issue ad. The FEC says that any ad that men­tions a can­di­date dur­ing defined win­dows before an elec­tion must be dis­closed, even if it doesn’t include the mag­ic words. The IRS looks at what it calls “the facts and cir­cum­stances” sur­round­ing an ad. Tax experts say that many of the issue ads that fall out­side FEC report­ing win­dows would be con­sid­ered polit­i­cal by the IRS. But the real­i­ty on the ground for groups like 501(c)(4)s is less clear: Because three of the FEC com­mis­sion­ers sym­pa­thize with the mag­ic words test they have “refused to apply the broad­er test in recent years,” says Paul Ryan, senior coun­sel at the Cam­paign Legal Cen­ter, a group that push­es for more cam­paign finance reforms. ... What that means for 501(c)(4)s is this: by avoid­ing the mag­ic words, social wel­fare non­prof­its have a bet­ter chance of con­vinc­ing reg­u­la­tors they are focused on issues and not pol­i­tics. Of course, the IRS could revoke a nonprofit’s tax-exempt sta­tus if it engages in too much polit­i­cal activ­i­ty. In prac­tice, that hasn’t hap­pened much. But the IRS has indi­cat­ed it is start­ing to look into some of these groups and recent­ly sent a let­ter (pdf) to Con­gress say­ing it had more than 70 “ongo­ing exam­i­na­tions” of 501(c)(4)s. What­ev­er it does, the IRS remains lim­it­ed in what it can do to watch over these groups. As a recent ProP­ub­li­ca inves­ti­ga­tion found: “One rea­son the IRS strug­gles is that it can’t match the speed of pol­i­tics.” In oth­er words, by the time these groups sub­mit tax returns, they have often stopped oper­at­ing or cre­at­ed new groups under new names. ———- “The Rules That Gov­ern 501(c)(4)s” by Emma Schwartz; Front­line; 10/30/2012

“Near­ly a cen­tu­ry ago, Con­gress cre­at­ed the com­pli­cat­ed legal frame­work that gov­erns these tax-exempt non­prof­its, also known as 501(c)(4)s for the part of the tax code they fall under. That rule said they were sup­posed to oper­ate “exclu­sive­ly for the pro­mo­tion of social wel­fare” — a def­i­n­i­tion that includes groups rang­ing from local fire depart­ments to the Sier­ra Club to the Nation­al Right to Life Com­mit­tee.”

Yes, it was near­ly a cen­tu­ry ago when Con­gress set up the legal frame­work for 501(c)(4)s to be treat­ed as non­prof­its. But, cru­cial­ly, it was only if they oper­at­ed exclu­sive­ly for the pro­mo­tion of social wel­fare. It was in 1959 that the rules got loos­ened by reg­u­la­tors to sim­ply require that 501(c)(4)s oper­ate pri­mar­i­ly on ‘social wel­fare’. But the def­i­n­i­tion of what it meant to be “pri­mar­i­ly” on social wel­fare was nev­er defined:

...

While these non­prof­its have always been allowed to lob­by for change, in 1959, reg­u­la­tors opened the door to polit­i­cal activ­i­ty by inter­pret­ing “exclu­sive­ly” to mean that groups had to be “pri­mar­i­ly” engaged in social wel­fare and help­ing the com­mu­ni­ty. But reg­u­la­tors nev­er defined exact­ly how they would mea­sure this bal­ance. Part of the rea­son, said Mar­cus Owens, a for­mer head of the IRS divi­sion over­see­ing non­prof­its, is because the IRS didn’t want to lim­it what it could eval­u­ate in decid­ing what was polit­i­cal activ­i­ty. How­ev­er, the lack of clar­i­ty has cre­at­ed a unique type of orga­ni­za­tion when it comes to pol­i­tics — chief among those dif­fer­ences being what the pub­lic must be told about these non­prof­its’ donors.

...

And it was one year ear­li­er, in 1958, that the Supreme Court ruled in NAACP v. Alaba­ma that 501(c)(4)s can keep their donors secret specif­i­cal­ly because they main­tain that their pri­ma­ry pur­pose is social wel­fare. Iron­i­cal­ly, it was a case brought for­ward by the NAACP — a group that real­ly was fight­ing for social wel­fare and real­ly did have mem­bers who had legit­i­mate rea­sons to want their iden­ti­ties to remain secret — that cre­at­ed the legal prece­dent that today allows indi­vid­u­als like the Koch broth­ers and Karl Rove to hide behind ‘social wel­fare’ secre­cy. It a reminder of how immense­ly chal­leng­ing it is to write laws that won’t be abused by the unscrupu­lous­ly pow­er­ful, which is one of the meta-chal­lenges fac­ing human­i­ty:

...

Why Don’t 501(c)(4)s Have to Dis­close Their Donors? Social wel­fare non­prof­its don’t fall under the Fed­er­al Elec­tion Commission’s stan­dard def­i­n­i­tion of a polit­i­cal com­mit­tee, which, under FEC guide­lines, must dis­close its donors. Because 501(c)(4)s say their pri­ma­ry pur­pose is social wel­fare, they can keep their donors secret. The only excep­tion is if some­one gives them mon­ey and specif­i­cal­ly states the funds are for a polit­i­cal ad. And unlike polit­i­cal com­mit­tees, social wel­fare non­prof­its have a legal right to keep their donors secret. That stems from the land­mark 1958 Supreme Court case, NAACP v. Alaba­ma, which held the NAACP didn’t have to iden­ti­fy its mem­bers because dis­clo­sure could lead to harass­ment. Fast for­ward to the post-Cit­i­zens Unit­ed world of cam­paign finance where out­side groups can now spend unlim­it­ed amounts of mon­ey to influ­ence elec­tions so long as they are inde­pen­dent of can­di­dates. See­ing the advan­tages offered by groups that can engage in polit­i­cal activ­i­ty while keep­ing their donors secret, both Democ­rats and Repub­li­cans have seized onto this open­ing in the tax code. That’s why in recent years, many new 501(c)(4)s have popped up right before the elec­tion sea­son, focus­ing heav­i­ly on tele­vi­sion adver­tis­ing, usu­al­ly attack­ing, though some­times pro­mot­ing, can­di­dates run­ning for office.

...

And even when 501(c)(4)s like the Amer­i­can Future Fund or Amer­i­cans For Pros­per­i­ty do engage in open polit­i­cal activ­i­ties (i.e. using the “mag­ic words” in their ads), they only have to report the amount spent. But not report who paid for them. Which, again, is why mer­ce­nary enti­ties with numer­ous clients like the Amer­i­can Future Fund are so use­ful for main­tain­ing secre­cy. If the AFF spends $1 mil­lion on attack ads it only needs to say it spent $1 mil­lion on attack ads. It does­n’t need to say if it the ‘donors’ (clients) were Rove’s net­work or the Kochs’ net­work, or maybe RJ Reynolds. We only get to know some enti­ty paid for the ads, not which enti­ty:

...

These non­prof­its do have to report some of their activ­i­ties to the FEC. When they run ads direct­ly advo­cat­ing for the elec­tion or defeat of a can­di­date, they have to tell reg­u­la­tors how much and what they spend mon­ey on — but not where the mon­ey comes from.

...

But 501(c)(4)s still have to lim­it their spend­ing on open polit­i­cal ads to less than 50% of their expen­di­tures, all of the rest of their ad spend­ing needs to be on “issue ads”. Which are basi­cal­ly cam­paign ads with­out the “mag­ic words” laid out by the 1976 Buck­ley v. Valeo Supreme Court deci­sion. As long as these groups to spend 49.999% of their funds on open cam­paign advo­ca­cy (i.e. cam­paign ads that include the “mag­ic words”) and the rest of their funds on ‘issue ads’ (i.e. cam­paign ads that don’t include the “mag­ic words”) they are high­ly unlike­ly to face any IRS scruti­ny and can main­tain their donors’ secre­cy:

...

Since they can’t make these types of ads their sole activ­i­ty, many 501(c)(4)s focus on so-called issue ads, which they only have to report to the FEC in defined win­dows before an elec­tion. The Debate Over “Issue Ads” But what exact­ly defines an issue ad? The key start­ing point is a 1976 Supreme Court case, Buck­ley v. Valeo, in which the court spec­u­lat­ed in a foot­note that if cer­tain words were used in an ad, it was clear­ly a cam­paign ad. The eight phras­es list­ed in the foot­note –“vote for,” “elect,” “sup­port,” “cast your bal­lot for,” “Smith for Con­gress,” “vote against,” “defeat,” and “reject” — became known as the “mag­ic words” and for decades served as a bright line test between an issue ad and a cam­paign ad.

...

And despite the fact that the “mag­ic words” cri­te­ria for dis­tin­guish­ing between polit­i­cal ads and issue ads has been rec­og­nized as a sham, it’s still a sig­nif­i­cant loop­hole to be exploit­ed. Con­gress addressed it in the 2002 ‘McCain-Fein­gold’ cam­paign finance bill and the Supreme Court in 2003 with McConnell v. FEC. But state reg­u­la­tors could still choose to rely on the “mag­ic word” cri­te­ria and the Supreme Court basi­cal­ly reaf­firmed the “mag­ic words” cri­te­ria in 2004 in FEC v. Wis­con­sin Right to Life. In oth­er words, the “mag­ic words” have had a seem­ing­ly mag­i­cal abil­i­ty remain in place for decades despite being a bla­tant­ly absurd loop­hole. The endur­ing nature of teh bla­tant­ly absurd is one of the big themes of the his­to­ry of US cam­paign finance law:

...

But many cam­paign finance reform­ers saw that dis­tinc­tion as a sham, espe­cial­ly as increas­ing amounts of fed­er­al cam­paign dol­lars head­ed to polit­i­cal par­ties where the soft mon­ey loop­hole allowed unlim­it­ed mon­ey to be spent on issue ads. While avoid­ing the mag­ic words, these issue ads typ­i­cal­ly focused on one can­di­date run­ning for office and ran just before an elec­tion. In oth­er words, the reform­ers argued, they were clear­ly try­ing to influ­ence elec­tions. The reform­ers tried to address this loop­hole in the Bipar­ti­san Cam­paign Finance Reform Act of 2002, oth­er­wise known as the McCain-Fein­gold bill. In a 2003 case, McConnell v. FEC, the Supreme Court appeared to agree, say­ing that the mag­ic words were “func­tion­al­ly mean­ing­less.” But the deci­sion didn’t bar states from using the mag­ic words and the court has since backed away from its ear­li­er stance. And so legal debate con­tin­ues. For instance, ear­li­er this year, the Col­orado Supreme Court upheld the mag­ic words test as the bright line between issue ads and direct cam­paign ads.

...

Flash for­ward to the post-Cit­i­zens Unit­ed land­scape, and we have both the FEC and IRS declar­ing that they will go beyond sim­ply apply­ing the “mag­ic words” cri­te­ria. But despite that, three of the FEC com­mis­sion­ers them­selves con­tin­ued to sym­pa­thize with the “mag­ic words” stan­dard and refused to apply a broad­er test. Keep in mind that arti­cle was from 2012, so the struc­ture of the FEC is going to change. But it points to the fact that whether or not the “mag­ic words” gets used as the sole cri­te­ria is still going to remain up to the FEC com­mis­sion­ers and, in turn, the polit­i­cal make­up of the FEC board. So if you have a Repub­li­can-dom­i­nat­ed FEC it’s like­ly going to revert back to exclu­sive­ly rely­ing on the “mag­ic words” sham. Sim­i­lar­ly, the IRS could apply­ing a broad­er test than the “mag­ic words” test. But in prac­tice that rarely hap­pens. It under­scores the impor­tance of the ide­o­log­i­cal make­up of the FEC’s board in clean­ing up the Amer­i­can cam­paign finance sys­tem:

...

Today, both the FEC and the IRS use tests broad­er than just the mag­ic words to deter­mine what counts as an issue ad. The FEC says that any ad that men­tions a can­di­date dur­ing defined win­dows before an elec­tion must be dis­closed, even if it doesn’t include the mag­ic words. The IRS looks at what it calls “the facts and cir­cum­stances” sur­round­ing an ad. Tax experts say that many of the issue ads that fall out­side FEC report­ing win­dows would be con­sid­ered polit­i­cal by the IRS. But the real­i­ty on the ground for groups like 501(c)(4)s is less clear: Because three of the FEC com­mis­sion­ers sym­pa­thize with the mag­ic words test they have “refused to apply the broad­er test in recent years,” says Paul Ryan, senior coun­sel at the Cam­paign Legal Cen­ter, a group that push­es for more cam­paign finance reforms. And some out­side groups are try­ing to keep it that way. What that means for 501(c)(4)s is this: by avoid­ing the mag­ic words, social wel­fare non­prof­its have a bet­ter chance of con­vinc­ing reg­u­la­tors they are focused on issues and not pol­i­tics. Of course, the IRS could revoke a nonprofit’s tax-exempt sta­tus if it engages in too much polit­i­cal activ­i­ty. In prac­tice, that hasn’t hap­pened much. But the IRS has indi­cat­ed it is start­ing to look into some of these groups and recent­ly sent a let­ter (pdf) to Con­gress say­ing it had more than 70 “ongo­ing exam­i­na­tions” of 501(c)(4)s. What­ev­er it does, the IRS remains lim­it­ed in what it can do to watch over these groups. As a recent ProP­ub­li­ca inves­ti­ga­tion found: “One rea­son the IRS strug­gles is that it can’t match the speed of pol­i­tics.” In oth­er words, by the time these groups sub­mit tax returns, they have often stopped oper­at­ing or cre­at­ed new groups under new names.

...

Also not­ed that when you read “But the IRS has indi­cat­ed it is start­ing to look into some of these groups and recent­ly sent a let­ter (pdf) to Con­gress say­ing it had more than 70 “ongo­ing exam­i­na­tions” of 501(c)(4)s,” that’s actu­al­ly an ear­ly ref­er­ence to the IRS inves­ti­ga­tions that even­tu­al­ly explod­ed into the fake ‘IRS tar­get­ing con­ser­v­a­tive groups’ scan­dal. When the IRS actu­al­ly did what it was sup­posed to do in 2010–2012 and inves­ti­gat­ed whether or not the many 501(c)(4) groups that popped up in the 2012 elec­tion where actu­al­ly “social wel­fare” orga­ni­za­tion, that was con­tort­ed by the right-wing noise machine into some sort of IRS attack on con­ser­v­a­tives, which makes sense giv­en how much the right-wing noise machine depends on the lack of cam­paign finance law enforce­ment.

501(c)(4)s: The Gift That Keeps On Giv­ing. To Itself. As Char­i­ty. Because That’s How the Scam Works

So we just saw how the 501(c)(4) sys­tem start­ed off with a Con­gres­sion­al act that allowed these groups to count as social wel­fare orga­ni­za­tions for tax pur­pos­es as long as they are exclu­sive­ly ded­i­cat­ed to social wel­fare. Con­gress made the mas­sive change to that rule in 1959 when it ruled that orga­ni­za­tions only had to be pri­mar­i­ly focused on social wel­fare in order to keep their tax treat­ment, allow­ing for up to half of a 501(c)(4)‘s spend­ing on polit­i­cal advo­ca­cy like attack ads. That con­gres­sion­al move fol­lowed the 1958 NAACP v. Alaba­ma rul­ing that allowed 501(c)(4)s to keep their donors secret from the pub­lic, which is a very rea­son­able request for an orga­ni­za­tion like the NAACP but the bil­lion­aires get to stay secret too.

501(c)(4)s still have to report to the IRS how much they spend on polit­i­cal ads, which can be up to half their spend­ing. And they still have to report their donors to the IRS. But their donor names were redact­ed from the pub­lic tax fil­ings of these orga­ni­za­tions. The right to donor secre­cy to the pub­lic is one of the key things that dif­fer­en­ti­ates 501(c)(4)s from their “super PAC” coun­ter­parts.

Then, in 1976, Buck­ley v. Valeo cre­at­ed the “mag­ic words” stan­dard for deter­min­ing whether or not an ad is con­sid­ered an “issue ad” or a polit­i­cal ad, thus cre­ate a set of rules that could be eas­i­ly over­come to allow for the cre­ation of ‘issue ads’ that are clear­ly polit­i­cal ads in real­i­ty.

Flash for­ward to the 2010 Cit­i­zens Unit­ed Supreme Court and we find that it basi­cal­ly just expand­ed to cor­po­ra­tions and unions the lux­u­ry of unlim­it­ed undis­closed use of the 501(c)(4)s sys­tem that had been used by wealthy donors and orga­ni­za­tions for decades. The rul­ing took an absurd­ly bro­ken sys­tem and made it more absurd­ly bro­ken.

In the fol­low­ing arti­cle, we’ll look at how allied net­works of 501(c)(4)s can sim­ply donate mon­ey to each oth­er in a man­ner sub­stan­tial­ly rais­es the 50% cap for spend­ing on polit­i­cal ads. How so? Because imag­ine a 501(c)(4) with $10 mil­lion spend­ing $5 mil­lion on polit­i­cal ads and then donat­ing the remain­ing $5 mil­lion to a dif­fer­ent allied 501(c)(4). Now half of that donat­ed $5 mil­lion gets to be spent on polit­i­cal ads too. So instead of a 50% cap on polit­i­cal spend­ing it effec­tive­ly becomes at 75% cap and the 