(Update) The Washington Post looks at Sean Noble’s ‘Kochtopus’ dark money organizations

Posted by AzBlueMeanie:

I'm still waiting on The Arizona Republic to do investigative reporting into the hub of "Koch Brothers Network" dark
money political non-profit corporations operating out of Maricopa
County. The media is supposed to be the 'watchdog of democracy,' not the media arm of the GOP.

Instead, the Republic's resident GOPropagandist Doug MacEachern wrote a love letter to the "Kochtopus," For liberals, Kochs and tea party are evil personified, and the Republic turned over its opinion page to one of the key players at the center of the California money laundering scheme, former House Speaker Kirk Adams, president of Americans for
Responsible Leadership, who dismissed the California investigation as a "big old nothing-burger." Why
anonymous is good. Hard-hitting investigative journalism response from the Republic: "What condiments go well on a nothing burger?" (actual question).

The Arizona Republic is useless.

Matea Gold and Tom Hamburger at the Washington Post today take a look at Sean Noble's 'Kochtopus' dark money organizations, California donor disclosure case exposes how nonprofits can play in politics:

[N]ew revelations in California provide an unusual look at one national
network of such groups that helped move $15 million into
ballot-initiative campaigns last fall while working hard to hide the
identities of their prominent financial backers. A pair of conservative
nonprofits at the heart of the effort were together fined a record
$1 million after a year-long state investigation, while two political
committees were ordered to repay the state for $15 million in donations
they received.

* * *

Several of the advocacy groups at the center of the California case have
played significant roles in national elections, including Americans for
Job Security, Americans for Responsible Leadership and the American
Future Fund. Those three groups have reported more than $68 million in
campaign-related expenditures during the past two election cycles,
according to data from the nonpartisan Center for Responsive Politics.
Because they are set up as nonprofit organizations rather than political
committees, the groups are not required to disclose their financial
supporters to the FEC.

The details of the California scheme, revealed in interviews and a cache of investigative documents, show how political operatives
casually shuffled around massive sums with little accountability. At one
point, a consultant involved sent a text message requesting
$11 million. The case also spotlights the extreme measures that
operatives took to skirt disclosure regulations, passing along funds
through a daisy chain of organizations without knowing which groups
would get the cash or whether the money would end up where it was
intended.

The episode was set in motion by Tony Russo, a Republican
political strategist in Sacramento who sought to spend $25 million on
issue ads last fall in two state ­ballot-initiative campaigns without
reporting who gave the money.

He turned for help to Sean Noble, a
GOP operative plugged into a national network of conservative groups.
The two agreed to a money swap: Russo sent money to an Arizona group
that Noble ran, in the hopes that Noble would get other organizations to
send similar amounts back into California, masking the original donors.

“I
said, ‘Sean, you know, I have a big hiccup in California,’ ” Russo
later recounted for state investigators. “ ‘Can we support some of your
national efforts and, in turn, do you have groups that can help us in
California?’ That was pretty much as simple as it was.”

But the
plan was far from simple — or effective. In the end, about $10 million
of the nearly $25 million that Russo’s group transferred to Noble’s
operation never made it back to California. Outmatched by labor unions
and other supporters of Gov. Jerry Brown (D),
Russo and his allies lost both initiative campaigns. And many of the
original donors whose identities they sought to protect were outed as a
result of the investigation. The names can be deciphered from a
partially redacted list of 150 donors that Russo’s attorneys provided to
the California attorney general’s office as part of the inquiry.

The partially visible list reveals members of the Fisher family, who
founded the clothing retailer the Gap and gave more than $9 million; San
Francisco investor Charles Schwab, who gave more than $6 million; and
Las Vegas casino tycoon Sheldon Adelson, who with his wife contributed
$500,000. One particularly surprising contributor was real estate
magnate and philanthropist Eli Broad, a longtime supporter of Democrats, who gave $500,000 to the effort. All the donors declined to comment or confirm their roles.

Dubbed the “California Comeback,” the initiative campaign was
inspired by the success of conservative advocacy groups in Wisconsin,
which in 2011 rallied around Republican Gov. Scott Walker’s push to roll back union rights.
That effort was driven in part by groups with ties to billionaire
industrialists Charles and David Koch, and major donors began telling
Russo that a similar effort was needed in the Golden State.

“It
started with just a kernel of, ‘Hey, we should be trying to figure out
how we create a voice in California,’ ” Russo told investigators. “And
the Koch model was the model that they were encouraging.”

Russo, who works closely with the business community, developed the plan
with Jeff Miller, a fundraiser who once headed the finance operations
for the state Republican Party and Gov. Arnold Schwarzenegger.

* * *

Russo and Miller, who ended up bringing in $74 million, were not
charged and cooperated with investigators after receiving criminal
immunity. They declined to comment for this article.

The two men told prosecutors that they enlisted the help of Stephen
DeMaura, president of Americans for Job Security (AJS), a nonprofit
registered in Virginia, who was willing to run the issue ads and take on California’s powerful unions.

Noble,
whom Russo said he met through a Koch donor, also pitched in, hiring
pollster Frank Luntz to conduct focus groups for the campaign and paying
veteran GOP admaker Larry McCarthy to cut possible TV spots. Noble did
not respond to requests for comment. [I'll bet!]

By the fall of 2012, Russo and Miller had about $25 million available
for the issue-ad campaign. But the money had come in later than they
had hoped, and DeMaura worried that running ads could trigger disclosure
requirements that kick in close to Election Day, the Sacramento consultants recalled.

But then a lawyer advising the team raised the idea of swapping
funds with other organizations as a way of getting the money back in the
state without running afoul of disclosure rules. In California,
nonprofit groups that make political donations must disclose any
contributions made for that purpose, a requirement they hoped to
sidestep if another group gave funds that were not raised for the
campaign.

Russo turned to Noble, hoping Noble could arrange a money swap
through his group, the Center to Protect Patient Rights (CPPR), a
Phoenix-based nonprofit with ties to the Kochs.
“The same money couldn’t come back” into California, Russo explained to
investigators. “Koch, our understanding was, had a pretty significant
network of groups. So that’s why we went to Sean.”

At the time, Noble was working as a consultant to Koch
Industries, a position he held through 2012. But Koch spokesman Robert
Tappan said in a statement that the Kochs “had no involvement
whatsoever, financial or otherwise, neither directly nor indirectly, on
anything to do with Prop. 30 or Prop. 32.”

Tappan said the Kochs were not aware that Noble had agreed to help Russo
move money into California. “Whatever Sean Noble did with regard to
those issues did not involve us,” he said.

The money swap played out over five weeks in the fall. DeMaura
transferred $24.55 million from his group in Virginia to Noble’s
organization. The funds were accompanied by letters noting that the
money’s use was “at the sole discretion of your organization.”

Noble
then dispersed a similar amount to two other nonprofits: the American
Future Fund in Des Moines and Americans for Responsible Leadership in
Phoenix.

In California, Joel Fox, head of the Small Business
Action Committee PAC,which was running ads about the two ballot
initiatives, said he did not know money would be coming from Americans
for Responsible Leadership until a few days before $11 million arrived
Oct. 15. The committee received assurances from a lawyer working with
Noble that it was legitimate, according to Russo.

But the large
sum from an obscure, out-of-state group caught the attention of Common
Cause, an organization that advocates for more transparency in campaign
finance. It filed a complaint Oct. 19 to the state’s Fair Political
Practices Commission, and Brown used the case to decry “money laundering” by “shadowy forces” working against him.

As
the commission pressed the Arizona group to reveal its donors, Noble
told Russo in late October that he could not deliver the final
$10 million needed in California, and he warned that he would point to
AJS if investigators sought to trace the source of the funds. “He
couldn’t tolerate an audit of CPPR,” Russo recalled Noble telling him.

Two
days before the Nov. 6 election, the California Supreme Court ordered
Americans for Responsible Leadership to reveal the source of its
contribution. It named Noble’s group, which in turned pointed the finger
at AJS in Virginia.

The Sacramento consultants were furious. “That’s kind of a fiasco in
our world,” Miller told investigators. Russo said he was “shocked,”
saying he believed AJS funds had been diverted elsewhere in Noble’s
network.

After a year-long investigation, the commission and the
attorney general’s office absolved the Virginia nonprofit of wrongdoing
but fined Noble’s organization and Americans for Responsible Leadership a
combined $1 million, a record in the state. It also ordered the two state political committees that spent the funds routed through the CPPR to pay the state $15 million.

Fox was stunned. “We cooperated with this inquiry from the beginning and were told by the attorney general’s office we were clean,” he said.
Besides, he added, “I don’t have $11 million sitting around.”

Kirk
Adams, president of Americans for Responsible Leadership, said in a
statement that the group was pleased the matter was resolved but declined to comment on the state’s findings regarding other groups.
As for AJS, DeMaura said that it “consistently worked within the law”
and added that the controversy had not hurt its fundraising. “Our
membership continues to grow,” he said in a statement.

One
lingering mystery is the $10 million that never made it to California
after Russo’s team transferred it to Noble’s operation. Toward the end
of Russo’s interview, a state prosecutor asked whether he felt guilty
that money he got from donors did not go where it was intended. “Well, I
mean, I felt bad, but, at the same time, you do your best with the
facts that you have at the time,” Russo replied, adding, “We’re trying
not to break any laws.”

What occurred in California last year is destined to occur in Arizona in 2014, because Arizona's political media is failing miserably to perform the role of a "watchdog of democracy" that the
Founding Fathers envisioned the media should perform as essential to
democracy and worthy of protection under the First Amendment. The Republic does not do muckraking investigative journalism into the political corruption that exists in its own backyard. The reason for this is that the Republic has far too long been aligned with the Arizona Republican Party as its media arm.

As I have said many times, we need to tear up the "Kochtopus" by its
roots and salt the ground to make certain that it never grows back
again. These billionaire bastard brothers and their secretive corporate
donors who have seized control of the state of Arizona need to be kicked
out, and return the government of Arizona to its citizens.

UPDATE: The Los Angeles Times has a remarkably similar investigative report to the Washington Post report above, by Chris Megerian and Anthony York California probe of campaign donations sheds light on 'dark money'.