Two blockbuster reports on the ‘Kochtopus’ dark money financing

Posted by AzBlueMeanie:

When last we heard about the Arizona-based "Kochtopus" dark money group Center
to Protect Patient Rights, founded by GOP operative Sean Noble, Peter H. Stone at The Daily Beast reported an Exclusive: California Grand Jury Probing Shadowy Money Groups:

A grand jury is now involved in a high-stakes California probe that is
looking into whether a PAC and three so-called dark-money
groups—including one with ties to the billionaire brothers Charles and
David Koch—broke a campaign disclosure law by funneling $11 million from
secret sources to influence ballot initiatives in the state’s 2012
election, The Daily Beast has learned.

* * *

One of the three groups that
allegedly channeled the funds to California was the Arizona-based Center
to Protect Patient Rights, founded in 2009 by Koch operative Sean
Noble, who has emerged in recent cycles as a big player in conservative
political and fundraising circles
. Noble has spoken at least twice at
the billionaire brothers’ biannual conferences aimed at tapping other
wealthy conservatives for their favorite projects, and he has been a key
strategist at small Washington meetings with other GOP allied groups
such as the Karl Rove-founded American Crossroads.

“Sean
is the wizard behind the screen” for the Kochs and their network of
wealthy donors, said one GOP operative familiar with Noble’s political
work.

In
2010 and 2012, Noble’s Center appeared to act mainly as a cash conduit,
shipping millions to allied conservative groups. In the 2010 cycle, for
instance, it channeled almost $55 million—a sum almost identical to its
revenues—to a couple dozen conservative bastions including Americans
for Tax Reform and the American Future Fund, according to the group’s
filings with the IRS. Most of that largess went to pay for advertising
backing GOP candidates or attacking Democrats
.

* * *

The circuitous routes apparently
used to funnel the $11 million into the state were deemed “the largest
contribution ever disclosed as campaign money laundering in California
history”
by the Fair Political Practices Commission.

But
the PAC only disclosed that the funds came from a group in Arizona,
Americans for Responsible Leadership
, a two-year-old “social welfare”
entity that had never before spent funds in California. When the FPPC
asked the Arizona group for more information and was rebuffed, the
commission went to the California Supreme Court, which ordered the
outfit to reveal where it received the funds.

To
comply, the Arizona group said the $11 million came initially from
another dark-money group, the Virginia-based based Americans for Job
Security, which is registered with the IRS as a “business league,” which
like social-welfare groups can shield the names of its donors.

Making the money trail even murkier,
the Virginia group passed the $11 million along to Noble’s Center to
Protect Patient Rights which, in turn handed it over to Americans for
Responsible Leadership.
(Notably, Noble’s Center donated $4.8 million to
Americans for Job Security in a separate 2010 money transfer, according
to the center’s IRS filings.)

Now Open Secrets reports Exclusive: Largest Dark Money Donor Groups Share Funds, Hide Links:

There's a new dark money game in town, one meant to further cover the
tracks of tax-exempt groups that have provided major sums to help
Republican causes in the 2010 and 2012 elections.

* * *

The groups, TC4 Trust and the Center to Protect Patient Rights
— both of which have connections to the billionaire industrialist Koch
brothers — have been playing a high-stakes game of hide-the-ball,
disguising transfers of millions of dollars from one to the other behind
a veil of Delaware limited liability corporations.

Already, under tax law, 501(c)(4) groups — like TC4, CPPR and nearly
all the groups to which they've given money through the years — don't
have to disclose their donors. By further shrouding the recipient groups
behind entities with different names (and, usually, different employer
identification numbers), the donors are attempting to make it even more
difficult to find out how the money is flowing.

TC4 is now out of business. But in its termination report, signed on May 14, 2013 and sent to the IRS, TC4 reported giving $27.9 million in grants
to other groups between July 1, 2011 and June 30, 2012. The report was included in data posted
yesterday by Resource.org.

* * *

But
two days after TC4's trustee finalized its termination report, the Center to Protect
Patient Rights — the other big shadow money pass-through — signed off on
amendments to its 2010 and 2011 tax filings that help solve the mystery.

The amendments say that, contrary to CPPR's earlier
representations on IRS filings that it had no connected entities operating under a different name, it
actually did.

One of them, according to one of the amendments,
was called Eleventh Edition, which received $4.3 million from TC4
sometime between July 1, 2010 and June 30, 2011. And not only was Eleventh
Edition the same as CPPR, but it had taken on a new name: Corner Table
LLC.

And CPPR's other amendment indicates it has another of
these units: Meridian Edition LLC
— which, the documents say, was
originally called American Commitment LLC. American Committment had
received a total of $9.3 million from TC4 in 2010 and 2011 (its earlier
grant was unclear at first because the recipient's name was smudged on
TC4's 990 return).

American
Commitment is a name that has been used for several nonprofits. The incarnation that received the TC4 money (a group that seemed
to disappear
, along with its millions from TC4) — is the one that shows
up in CPPR's amended filing.

The image below shows TC4's contributions to CPPR:

TC4 - CPPR - New Page (5)-thumb-690x679-11337

The upshot: Now we know that CPPR
— through its previously unknown sub-units — received a total of
nearly $28 million from TC4 from August 2009 through June 2012. That's a
big chunk of CPPR's overall $95 million revenue. The source of most of the
rest of its funds remains publicly unknown
.

These wholly-owned sub-units of larger groups have a particular designation under the law: They're known as "disregarded entities"
— meaning their different names and separate identification numbers
are disregarded by the IRS for income tax purposes, and they must be
reported on the same forms with their parent groups. Officially, they
are "disregarded as an entity separate from its owner." They are almost
always single-member LLCs.

CPPR
has given out more than $70 million in grants from its inception in 2009
through the end of 2011
. And we don't yet know — because of lag time in
IRS filing schedules — what it spent in 2012, which could have been a
big year for the organization.

Continue reading Exclusive: Largest Dark Money Donor Groups Share Funds, Hide Links.

The other blockbuster report comes from POLITICO Tiger Beat On The Potomac by the two presiding intellects of the publication, Messrs. VandeHei and Allen. I know . . . but cut through their usual B.S., and this is a must-read article. Exclusive: The Koch brothers' secret bank:

An Arlington, Va.-based conservative group, whose existence until now
was unknown to almost everyone in politics, raised and spent $250
million in 2012 to shape political and policy debate nationwide.

The
group, Freedom Partners, and its president, Marc Short, serve as an
outlet for the ideas and funds of the mysterious Koch brothers, cutting
checks as large as $63 million to groups promoting conservative causes,
according to an IRS document to be filed shortly.

The 38-page IRS filing amounts to the Rosetta Stone of the vast web of
conservative groups
— some prominent, some obscure — that spend time,
money and resources to influence public debate, especially over
Obamacare.

The group has about 200 donors, each paying at least $100,000 in annual
dues
. It raised $256 million in the year after its creation in November
2011, the document shows. And it made grants of $236 million — meaning a
totally unknown group was the largest sugar daddy for conservative
groups in the last election, second in total spending only to Karl
Rove’s American Crossroads and Crossroads GPS, which together spent
about $300 million.

* * *

[T]he “proud” donors are not so proud they will publicly identify
themselves as donors. Short refused to open up about the men and women
behind the quarter-billion-dollar fund, beyond saying that Koch-linked
entities provided a “minority” of the funds and that the largest single
donor gave about $25 million.

Freedom Partners is organized under the same section of the Tax Code
as a trade association, a 501(c)6, which allows the group to conceal its
donors from public release, although the amounts and recipients of its
major grants are public.

The filing offers a rare tour of the conservative movement and how it gets its funds:

Center to Protect Patient Rights [Sean Noble's Phoenix-based organization], a group that vehemently opposes Obamacare: a total of $115 million, from three grants.

Americans for Prosperity, an organizing and advocacy group that is
courted by Republican presidential candidates: $32.3 million.

The 60 Plus Association, a free-market seniors group that also opposes Obamacare: $15.7 million.

American Future Fund, an Iowa group that spent a lot of money on ads in 2012, many for Mitt Romney: $13.6 million.

Concerned Women for America Legislative Action Committee, which
gets involved in a number of social policy debates: $8.2 million.

Themis Trust, a Koch-based voter database that is made available to other conservative organizations: $5.8 million.

Public Notice, a fiscal policy think tank: $5.5 million.

Generation Opportunity, a group for “liberty-loving” young people: $5 million.

The LIBRE Initiative, which targets a free-market message to Hispanic immigrants: $3.1 million.

The National Rifle Association: $3.5 million.

The U.S. Chamber of Commerce: $2 million.

American Energy Alliance: $1.5 million.

• And several groups — including the State Tea Party Express, the Tea
Party Patriots
and Heritage Action for America — got less than $1
million each.

Members are drawn from the Koch brothers’ semiannual conferences, a
10-year-old tradition that draws top politicians — including, last
month, House Majority Leader Eric Cantor (R-Va.) and House Budget
Committee Chairman Paul Ryan (R-Wis.). Many seminar attendees also give
directly to Koch-approved groups, and the Freedom Partners funds do not
include the Kochs’ many gifts to university think tanks.

Continue reading Exclusive: The Koch brothers' secret bank.

This intricate web of "Kochtopus" dark money groups operates freely in Arizona, with weak state laws and even weaker regulatory enforcement by the Secretary of State and Attorney General. Worst of all, the GOP-friendly media in this state never does this kind of investigative reporting about "Kochtopus" dark money groups.

The Arizona Republic only reports about union organizations with a dark money campaign group in local city council races — a mere pittance compared to the "Kochtopus" secret bank. The Arizona Republic never reports on the "Kochtopus" operatives whom they socialize with at parties and social events, and probably even contribute money. You can complain about the corrupting influence of dark money in politics all you want, but if you are not part of the solution, you are part of the problem.

Expose these evil bastards!

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