Dark Money, Nonprofit Experts: Koch Organization Shouldn’t Be Allowed To Hide Contribution Amounts

A conservative dark money organization tied to the billionaire libertarian Koch brothers shouldn’t be allowed to hide the size of its donations from public view, campaign finance and nonprofit experts said last week.

Americans for Prosperity (AFP), the flagship political organization of Charles and David Koch, is refusing to allow the public to view a section of its tax return showing the amounts of donations made by individuals. The section of the tax return requested by MapLight, known as a Schedule B, is an important document for journalists because it lists total contributions from individuals who gave more than $5,000.

An AFP official said public disclosure of the document could be used to identify its donors. MapLight, a Berkeley, Calif.-based nonprofit watchdog organization, filed a complaint last week with the IRS seeking the release of the information.

The IRS itself provides explicit guidelines for public disclosure of nonprofit tax returns in the instructions accompanying the Schedule B. According to the instructions,  “the names and addresses of contributors aren’t required to be made available for public inspection. All other information, including the amount of contributions … is required to be made available for public inspection unless it clearly identifies the contributor.”

The tax code, however, contains at least one ambiguous statement that would appear to provide the basis for AFP’s assertion that it can withhold its donation amounts. One section notes that “the amounts of contributions and bequests to an organization shall be available for public inspection unless the disclosure of such information can reasonably be expected to identify any contributor.”

Marc Owens, a former head of the IRS’ Exempt Organizations division, said the Schedule B instructions remove any ambiguity. “The form’s instructions constitute a type of official interpretation of the requirement,” he said. “I don’t see how dollar amounts can ever identify a donor, whether you’re using the liberal language of the regulation or the form’s instructions,” he added.

AFP is “completely wrong on the law,” Adam Rappaport, the counsel at the liberal watchdog Citizens for Responsibility and Ethics in Washington (CREW), told MapLight. “They know perfectly well that there is no way that the dollar figure contributed by someone who is completely unidentified can identify who that contributor is,” he said.

The only recourse journalists have when organizations refuse to follow IRS public disclosure regulations is to file a complaint with the agency. While the IRS acknowledges complaints, it is not able to comment on whether an investigation is open or disclose the outcome of an investigation.

An IRS spokesperson did not respond to emailed questions about whether organizations are permitted withhold the dollar amounts of the contributions they have received, and instead pointed to language on the agency’s website stating that “an exempt organization is not required to disclose the name and address of any contributor to the organization.”

A document filed with the North Carolina secretary of state’s office shows that AFP received 81 percent of its contributions in 2016 from just five donors. The individual donor amounts, however, can’t be determined without a Schedule B.

Koch-Linked Dark Money Organization Seals 2016 Tax Return Section From Public Scrutiny

A conservative dark money organization linked to billionaire libertarian brothers Charles and David Koch is refusing to disclose information about the size of its donations, defying IRS regulations that govern the tax-exempt entities.

Americans for Prosperity (AFP), the flagship political organization of the Koch brothers, spent at least $13 million to help elect Republicans during the 2016 election. It raised almost $64 million in contributions, according to its tax return.

The organization, however, last week formally rejected MapLight’s request to release a redacted section of its annual tax return that lists any donations of more than $5,000. MapLight, a Berkeley, Calif.-based money in politics watchdog, has filed a formal complaint with the Internal Revenue Service.

“AFP is secretly influencing our government and elections through more than $60 million in dark money and refusing to comply with even the minimal transparency law still applicable,” said Daniel G. Newman, president and co-founder of MapLight. “Americans have a right to information about the efforts to influence our political process by unelected, anonymous billionaires.”

The section requested by MapLight, known as a Schedule B, is an important document because it indicates how much money comes from large contributions. In November, MapLight used a Schedule B to report that the dark money organization that financed Supreme Court Justice Neil Gorsuch’s confirmation received almost 90 percent of its 2016 funding from a single $28.5 million donation.

Under IRS rules, political 501(c)(4) nonprofits like AFP are required to make their full tax returns publicly available, although they are permitted to redact certain information — including names and addresses — that could be used to identify donors. AFP is arguing it doesn’t have to publicly disclose the size of individual donations it received in 2016 because the information might be used to reveal their donors.

“AFP believes that disclosure of dollar amounts and/or non-cash property contributions could reasonably be expected to be used to identify the names of contributors,” Levi Russell, the organization’s vice president of public affairs, said in an email.

Organizations including the U.S. Chamber of Commerce, the National Rifle Association, and the 45Committee, which collectively spent $85 million on the 2016 election, have not raised similar arguments.

“IRS regulations are clear that 501(c)(4)s must publicly disclose their complete 990 upon request, with the names and addresses of the top contributors redacted,” said Brendan Fischer, an attorney at the Washington, D.C.-based Campaign Legal Center.

In their 2012 tax form — the last publicly available one that included a redacted list of contributors — AFP reported $115 million in revenue. More than $89 million came from large grants of more than $1 million, including individual grants of $21 million, $26 million, and $11.5 million.

Dark Money Group Received Massive Donation In Fight Against Obama’s Supreme Court Nominee

A dark money organization that spent $7 million to block former President Obama’s Supreme Court pick received just three donations between 2015 and 2016, but one transaction really counted: A single $17.9 million contribution from a mystery donor.

The Judicial Crisis Network (JCN), a Washington, D.C.-based conservative nonprofit, saw its revenues explode as it ran ads thanking Republican senators who successfully prevented Merrick Garland, Obama’s pick to replace Antonin Scalia, from receiving a confirmation hearing. It also sent millions of dollars to nonprofits that worked to elect conservative state judicial candidates and attorneys general. Earlier this year, JCN spent $10 million on ads to help secure Supreme Court Justice Neil Gorsuch’s confirmation.

The organization’s most recent tax return, covering July 2015 to June 2016, shows JCN’s anti-Garland spending spree was fueled by three contributions. The $17.9 million donation accounted for 96.6 percent of its revenue. Before the donation, the organization had never reported more than $6 million in revenue since its 2005 creation.

The Schedule B IRS form from the Judicial Crisis Network obtained by MapLight shows an
anonymous contribution for $17.9 million.

Because it is a nonprofit, JCN isn’t required to publicly disclose its donors, and the organization declined to answer questions about the source of its massive cash infusion. But in the past, much of its funding has come from the Wellspring Committee, a secretive Virginia-based dark money organization. Wellspring reported giving JCN more than $15 million between 2012 and 2015; it was one of only two contributors to JCN between July 2014 and June 2015.

The organizations have personal ties. Wellspring is run by Ann Corkery, a Washington lawyer who is married to JCN’s longtime treasurer, Neil Corkery. Daniel Casey, a director for JCN, is the father of Wellspring director Michael Casey. The two organizations use the same street address — a Washington, D.C., United Parcel Services office — in their corporate filings.

Wellspring, also a nonprofit, doesn’t disclose its donors, and no other organizations have reported giving to the group since 2011. Wellspring’s 2016 tax return, which will show its donations to other nonprofits, is not due until early November.

While JCN received widespread attention for its spending on the Supreme Court nominations, the organization also has spent substantial amounts of money on conservative state initiatives. The network donated $1.4 million to the Wisconsin Alliance for Reform, a dark money organization that spent $1.5 million to re-elect Wisconsin Supreme Court Justice Rebecca Bradley. The justice, who once described former President Bill Clinton as a “tree-hugging, baby-killing, pot-smoking, flag-burning, queer-loving, bull-spouting, ‘60s radical socialist adulterer,” was appointed to the court in 2015 by Gov. Scott Walker.

In the race for chief justice of the Arkansas Supreme Court, JCN ran more than $600,000 worth of ads attacking Courtney Goodson, an associate justice. The network also contributed $300,000 to a Nebraska campaign attempting to stop the state from repealing the death penalty, and it gave $200,000 to the North Carolina Chamber of Commerce. The North Carolina donation was used to support conservative Robert Edmunds in a state supreme court race.

The organization provided substantial support to other dark money groups dedicated to helping Republican candidates. It gave $1.2 million to the Republican Attorneys General Association, which elects GOP attorneys general, and $350,000 to its nonprofit affiliate, the Rule of Law Defense Fund, which helps organize state challenges to federal regulations and which was led by Oklahoma Attorney General Scott Pruitt before he stepped down to take over the Environmental Protection Agency in the Trump administration.

JCN also gave $500,000 to the Republican Governor’s Association, which supports Republican gubernatorial candidates, and $325,000 to the Republican State Leadership Committee, which was the biggest outside spender in 2016 state judicial races, according to the Brennan Center for Justice.

White House Relied Upon Dark Money Lobbyist To ‘Quarterback’ Gorsuch Confirmation

A lobbyist with extensive ties to secretive nonprofit organizations served as the “quarterback” for  the successful nomination of Supreme Court Justice Neil Gorsuch, according to records reviewed by MapLight.

Rob Collins, a Washington lobbyist and Republican strategist, claims on his professional biography at the S-3 Group that he worked with more than a half-dozen White House offices, the Department of Justice, the U.S. Senate and more than 20 advocacy organizations to ensure Gorsuch’s confirmation.

The disclosure reveals that the Trump administration is taking advantage of a loophole in U.S. campaign finance law that allows elected officials to coordinate their agendas with nonprofit organizations that aren’t required to disclose their donors to the public. All told, five major “dark money” organizations spent more than $14 million boosting Gorsuch’s nomination.

“By many indications, some of these dark money groups are acting as an arm of the White House,” said Brendan Fischer, an associate counsel at the Washington-based Campaign Legal Center, a nonprofit watchdog. “We’re seeing money flow into politics in ways we’ve hardly seen before, and it’s continuing to flood the very swamp that Trump promised to drain.”

Although campaign finance legislation prohibits coordination among elected officials, candidates and dark money organizations, the laws only apply during federal elections. Coordination to support or oppose Cabinet nominees, judicial nominees, or specific policy measures are not covered by the regulations.

“The reason campaign finance law doesn’t cover this is because it’s written to govern campaigns,” Fischer said. “But there’s little reason to think that a six- or seven-figure expenditure to advance the President’s agenda is going to be any less valuable than a big expenditure to support his reelection.”

The Dark Money Behind Gorsuch

Collins was a director of 45Committee, a dark money organization that spent more than $21 million supporting Trump’s presidential campaign, as recently as January, when he last appeared on the organization’s FCC filings. The Herndon, Va.-based committee’s ads made it the third-highest spending dark money organization in the election cycle.

Since the election, the organization has supported Trump’s agenda, launching campaigns to help confirm Cabinet picks including Education Secretary Betsy DeVos and Attorney General Jeff Sessions. The 45Committee paid for a round of ads touting Gorsuch’s qualifications that ran nationally on networks including Fox, MSNBC and CNN.

Attempts to confirm whether Collins is still working with 45Committee — which lists its address as a post office box in a distant Washington suburb — were unsuccessful. Collins did not respond to repeated requests for comment by MapLight.

America First Policies, a dark money organization created by former Trump aides to boost his agenda, also supported Gorsuch’s nomination. The organization has strong ties to 45Committee; Brian Walsh, 45Committee’s former president, was hired in April as the president of America First Policies. The organization released a video asking senators to confirm Gorsuch.

In the wake of the Gorsuch confirmation battle, America First Policies has continued to support the Trump agenda, spending $1 million to pay for advertisements scolding Sen. Dean Heller, R-Nev., for his reluctance to support legislation that would gut the 2010 Affordable Care Act, also known as Obamacare. The ads “had the blessing of the White House,” according to the New York Times.

Both Collins and Walsh also have ties to the American Action Network (AAN), a leading dark money organization supporting Republican policies. Since 2010, the organization has spent at least $56 million on ads and donations to influence elections. Collins was AAN’s president from its formation in 2009 until 2011; Walsh led the organization from 2011 to 2015. The network has spent more than $5.6 million this year to support Republican health care policies.

The Judicial Crisis Network (JCN), a nonprofit that advocates for the appointment of conservative judges in state and national courts, spent at least $10 million on the Gorsuch confirmation. The network shares a top donor with the 45Committee, the Wellspring Committee, which has distributed more than $24 million in grants to conservative nonprofits since 2008. Wellspring has given roughly $13.9 million to JCN, and also provided $750,000 to the 45Committee – a third of the money the organization reported raising between April 2015 and March 2016.

Other dark money organizations that spent heavily to support Gorsuch include the Great America Alliance, a pro-Trump spinoff of a super PAC, which spent $3.5 million on the court fight, and the National Rifle Association, which spent at least $1 million.

Gorsuch’s Campaign Finance Views

Partisan political nonprofits like 45Committee, American Action Network, the Judicial Crisis Network and the Great America Alliance have proliferated since a series of Supreme Court decisions loosened campaign finance regulations.

During the March confirmation hearings, Sen. Sheldon Whitehouse, D-R.I., asked Gorsuch about the spending by dark money organizations to aid his confirmation, and the $3 million spent to oppose former President Barack Obama’s Supreme Court nominee, Merrick Garland, whose nomination was blocked by Republicans last year.

“I’m trying to figure out what they see in you that makes that $17 million… worth their spending,” he said.

“You’d have to ask them,” Gorsuch replied.

“I can’t,” Whitehouse said. “I don’t know who they are.”

When asked about his views on dark money and disclosure, Gorsuch would only say that he would examine the issues on a case-by-case basis.

The Top Ten Dark Money Down-Ballot Races

Conservative dark money groups have poured more than $55 million so far into U.S. House and Senate elections this cycle, according to an analysis by Dark Money Watch and MapLight.

Liberal dark money organizations have spent over $19 million, the analysis found.

Most of the $80 million in spending reported by more than 90 dark money groups across the political spectrum has gone to races that could determine which party controls the Senate.

But the reported spending likely doesn’t include all of the expenditures made by those organizations. Dark money groups — politically active nonprofits and limited liability corporations — do not have to publicly disclose their donors and do not have report all of their political spending to the Federal Election Commission. By law, these organizations can spend unlimited amounts of money on ads, mailers, and other materials advocating for or opposing a candidate or issue — as long as the expenditures are made independently of campaigns.

The vast majority of dark money spending in this election cycle has come from a handful of politically active nonprofits. The top three biggest spenders so far — the U.S. Chamber of Commerce; Americans for Prosperity, a conservative dark money organization supported by billionaire brothers Charles and David Koch; and the National Rifle Association — account for more than half of all reported dark money spending on House and Senate elections.

Below are the ten Congressional races where dark money groups are spending the most this cycle, according to the analysis.

  1. Pennsylvania Senate – $14.9 million

The too-close-to-call contest between incumbent Republican Pat Toomey and his Democratic challenger, Katie McGinty, is now the most expensive Senate race in U.S. history, according to CNBC. It’s also one of six battles that could determine whether the GOP maintains its majority in the Senate.

The Chamber has spent $5.1 million in support of Toomey’s re-election bid, while Americans For Prosperity has spent $1.5 million.

The dark money groups boosting McGinty’s campaign include Majority Forward, which has spent $2.5 million on ads critical of Toomey, the Environmental Defense Action Fund and the League of Conservation Voters, which have spent more than $2.4 million combined.

  1. Ohio Senate – $11.3 million

Liberal and conservative dark money groups have been moving some of their resources elsewhere, now that Republican incumbent Rob Portman has a sizable lead in polls over his Democratic rival, Ted Strickland. But when the race was considered close, the organizations pumped millions into the Buckeye state.

The Chamber and Americans for Prosperity spent $4.6 million and $2.3 million respectively to boost Portman’s campaign.

Working America, Stand up for Ohio, the SEIU, the Ohio Environmental Council Action Fund and the League of Conservation Voters put in a combined $1.3 million to aid Strickland’s bid.

  1. Florida Senate – $9.9 million

While polls show a tight race between the Republican incumbent, Sen. Marco Rubio, and Democratic Rep. Patrick Murphy, the dark money spending has overwhelmingly favored Rubio.

American Future Fund has spent $2.6 million on ads critical of Murphy. The organization also spent millions attacking Rubio’s primary opponents during his unsuccessful presidential bid. Americans for Prosperity has spent $2.1 million supporting Rubio, the NRA has spent $1.7 million, and the Chamber has spent $1.5 million.

Much of this spending has gone to ads criticizing Murphy or advocating for Rubio. One ad paid for by the Chamber highlighted news reports questioning Murphy’s resume.

The dark money groups supporting Murphy — AFT Solidarity, America’s Voice, People for the American Way and Working America — have spent about $915,000.

  1. Nevada Senate – $8.9 million

With Sen. Minority Leader Harry Reid retiring, dark money groups have spent millions on the battle to replace him. Polls show that the race between Democrat Catherine Cortez Masto and Republican Joe Heck is a dead heat.

The Chamber has spent $3.6 million and the NRA almost $1.5 million to support Heck. Americans for Prosperity has reported spending $270,706 and has put resources into a ground campaign advocating for Heck.

Cortez Masto’s bid has received support from three dark money organizations: Majority Forward, which is affiliated with the Senate Majority PAC and has spent more than $251,000; the League of Conservation Voters, which has spent nearly $980,000; and the Environmental Defense Action Fund, which has spent more than $400,000.

  1. Indiana Senate – $5.7 million

Most of the dark money in this race is aimed at defeating Democrat Evan Bayh, who is running for a seat he last held in 2011, when he retired from the Senate.

Although Bayh became an adviser to the Chamber when he left office, his former employer (as of June) has spent more than $2.5 million aimed at helping his rival, Republican Rep. Todd Young. The Chamber’s political director told the Indianapolis Star the group decided to oppose Bayh because “his voting record is reflexively liberal when it matters most.”

In addition to the Chamber, the NRA has spent $1.9 million and Americans for Prosperity has spent almost $1 million to stop Bayh from reclaiming his Senate seat.

  1. North Carolina Senate – $4.7 million

Dark money has been streaming into the Tar Heel state in the final weeks of the election, with most of it aimed at helping the incumbent Republican Richard Burr, who, polls show, has a slim lead over former Democrat Deborah Ross.

Since Sept. 27, the NRA has pumped over $1.9 million into the race, spending big on television advertisements and mailers to oppose Ross. Americans for Prosperity and One Nation, a dark money group linked to GOP strategist Karl Rove, together have spent nearly $1.3 million against Ross.

Ross, meanwhile, has benefited from a significant investment by labor. The AFL-CIO has reported spending over $900,000 against Burr.

  1. Missouri Senate – $4.0 million

As the race between Republican Sen. Roy Blunt and Secretary of State Jason Kander has tightened, dark money has poured in from liberal and conservative groups.

Blunt’s re-election bid has received support from Americans for Prosperity, which has spent $725,000; the NRA and One Nation, which have each spent about $480,000; and the American Chemistry Council, which lobbies on behalf of chemical companies and has spent nearly $292,000. Most of that money has gone to ads and mailers attacking Kander.

The American Federation of State, County and Municipal Employees has spent over $1 million, and Majority Forward has spent about $829,000 on ads attacking Blunt.

  1. New Hampshire Senate – $3.3 million

Republican Kelly Ayotte’s support of Donald Trump could determine the outcome of this hotly contested race. The incumbent Ayotte, who called Trump a “role model,” before saying she had made “a mistake,” is running against Democratic Gov. Maggie Hassan.

The dark money groups boosting Ayotte’s re-election bid include the Chamber, which has spent $1.9 million, and One Nation, which has spent over $700,000. Citizens for Responsible Energy Solutions, a conservative group that has received funding from nonprofit groups traditionally associated with Democrats, has spent over $450,000. The organization released an ad this summer calling Ayotte a leader who will “protect the legacy of this environment.”

Hassan’s campaign has received outside support from gun safety and reproductive rights advocates. The National Abortion Rights Action League has spent more than $103,000, and Everytown for Gun Safety, a group backed by Michael Bloomberg, has spent about $27,500.

  1. Nevada Congressional District 3 – $2.0 million

The Republican primary race for the congressional seat being vacated by Heck saw a torrent of dark money spending in support of state Sen. Michael Roberson’s failed bid.

A group called Ending Spending poured more than $1.6 million into the race, running ads backing Roberson and bashing his opponents, including the eventual primary winner, Danny Tarkanian. Ending Spending doesn’t disclose its donors, but it is associated with Joe Ricketts, the conservative billionaire who founded AmeriTrade.

Main Street Advocacy, a group that supports moderate Republicans, chipped in $250,000 to boost Roberson’s bid.

Dark money does not appear to be a factor in the general election, where Tarkanian is running against Democrat Jacky Rosen.

  1. Wisconsin Senate – $1.9 million

Republican Ron Johnson upset Democrat Russ Feingold in 2010, part of the Tea Party wave that swept through Congress. Now Feingold is trying to recapture his Senate seat, and polls show him in the lead.

The Chamber has spent $750,300 to help keep Wisconsin red, while the NRA has spent almost $269,000 and Americans for Prosperity, which backed Johnson in 2010, has spent almost $200,000.

Feingold’s bid has received support from the Environmental Defense Action Fund, which has spent more than $468,000; J Street, a liberal Jewish advocacy group, which has spent $125,000; and Everytown for Gun Safety, the Bloomberg-backed gun control group, which has spent $20,000.


Methodology: MapLight analysis of data on electioneering communications, independent expenditures by organizations, and communication costs in 2016 election cycle available from the Federal Election Commission as of October 19, 2016. Organizations’ ideological views are from the Center for Responsive Politics. Expenditures opposing one of two candidates in a race is assumed to support the opposing candidate.