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Philip Andrews / Roll Call Photos/Newscom
Bruce Rastetter, CEO of Hawkeye Renewables, reportedly provided some of the seed money for the American Future Fund.
Last fall, a cadre of wealthy business executives and conservative groups tried to sell California voters on new campaign finance reforms.
Couched in lofty rhetoric about the importance of cutting off money from special interests to politicians and other regulations favored by reformers, their proposal sought to ban the practice of using payroll deductions for political expenditures — a popular method of union fundraising.
Once alerted to the true nature of Proposition 32, the unions and political left rose up against it.
An innocuously named nonprofit, the Iowa-based American Future Fund, proved to be one of the biggest backers of the initiative, sinking more than $4 million into the ballot measure that voters ultimately rejected.
As a “social welfare” organization, the American Future Fund is not required to publicly disclose its donors. But to maintain its tax-exempt status under Sec. 501(c)(4) of the U.S. tax code, influencing elections cannot be its primary purpose.
The American Future Fund’s investment in California was part of a nationwide, political advertising spree in 2012 that exceeded $29 million, according to a Center for Public Integrity analysis of state and federal records.
That amount included more than $19 million on efforts designed to oust President Barack Obama, as well as millions more to oppose Democratic candidates for Congress and even two state attorneys general. Now the group is funding ads opposing Obama’s nomination of former Republican Sen. Chuck Hagel of Nebraska for defense secretary.
Since the U.S. Supreme Court’s controversial Citizens United decision in 2010, nonprofits such as the American Future Fund have played a more prominent role in electoral contests — all while giving their supporters the ability to keep their identities hidden. During the 2010 midterm elections, politically active nonprofits outspent super PACs, which exist to fund political advertisements, by a 3-to-2 margin.
The American Future Fund ranked third among “social welfare” nonprofits in spending in the 2012 federal election, according to the Center for Responsive Politics, trailing only the Karl Rove-affiliated Crossroads GPS and Americans for Prosperity, which is backed by conservative billionaire brothers Charles and David Koch.
There are also Democratic-aligned nonprofits, but their spending was well below that of their conservative counterparts. The top left-leaning nonprofit was the League of Conservation Voters, which reported spending about $11 million in the 2012 election opposing or supporting candidates.
The American Future Fund’s spending “raises some serious questions” and “evades any form of meaningful disclosure,” said Adam Rappaport, senior counsel with watchdog group Citizens for Responsibility and Ethics in Washington (CREW).
Numerous officials with the American Future Fund did not respond to requests for comment for this story.
Advocating for ‘free-market ideas’
The American Future Fund’s mission is to “educate and advocate for conservative and free-market ideas,” according to its annual filing with the Internal Revenue Service.
Despite asserting that it isn’t primarily focused on elections, the nonprofit’s DNA is decidedly political.
Conservative political operative Nick Ryan, a longtime adviser to former GOP Rep. Jim Nussle of Iowa, founded it in 2007. Over the years, the group has paid Ryan’s firm, Concordia Enterprises, hundreds of thousands of dollars annually for consulting services.
In 2010, the New York Times reported that Iowa businessman Bruce Rastetter provided an unspecified amount of “seed money” for the organization. Ryan once represented four of Rastetter’s companies as a lobbyist, including Hawkeye Energy Holdings, one of the country’s largest ethanol producers.
The nonprofit’s first president was Nicole Schlinger, the former finance director of Iowa’s Republican Party. Its current president is veteran Republican state Sen. Sandra Greiner, who served for 14 years as the Iowa chairwoman of the pro-business American Legislative Exchange Council.
Ryan and Greiner did not respond to requests for comment.
In 2008, when the American Future Fund was seeking — and ultimately garnered — tax-exempt status from the IRS, it pledged to abstain from electoral politics, saying it would spend 70 percent of its time doing work to “educate the public on policy issues” and 30 percent engaging in efforts to “influence legislation through grassroots advocacy.”
When asked on its application if the group had any plans to spend money to “influence the selection, nomination, election or appointment” of anyone seeking public office, it answered “no.” It also vowed to stay out of the presidential race.
When the IRS subsequently inquired why the group’s advertisements “appear to be more partisan than nonpartisan,” the group’s attorney, Karen Blackistone, wrote that the efforts were “strictly issued-based and nonpartisan.”
The group takes a position on issues and encourages the public to contact their representative, she wrote in a 2008 response to the IRS.
“AFF’s advertisements have never commented on a candidate’s character, qualifications or fitness for office,” she stated.
Big money tied to post office box
The American Future Fund has raised more than $60 million, with spikes in contributions coming in election years.
Much of that money has come from another conservative “social welfare” nonprofit that doesn’t disclose its donors by name — the Arizona-based Center to Protect Patient Rights.
The nonprofit has no website and lists its address as a post office box in Phoenix. It was launched in 2009 by Republican operative Sean Noble, who has extensive ties to the vast political network underwritten by the Koch brothers.
Noble, a former chief of staff for former Rep. John Shadegg, R-Ariz., did not respond to requests for comment for this story.
For three years running, Noble’s organization has reported making substantial grants to the American Future Fund for “general support,” according to IRS filings. The nonprofit contributed more than $14 million to the American Future Fund between 2009 and 2011, or 51 percent of funds the group raised over the three-year period.
The Center to Protect Patient Rights has also given millions of dollars to a network of conservative groups, including the Koch-backed nonprofit Americans for Prosperity, as was first reported by the Center for Responsive Politics.
In addition to Noble, there is another Koch connection.
In 2008, Trent Sebits, the former manager of public and government affairs for the Kochs’ Wichita-based refining giant, Koch Industries, registered with the state of Kansas to lobby on behalf of the American Future Fund and Americans for Prosperity. Sebits did not respond to a request for comment.
The American Justice Partnership, another “social welfare” nonprofit, gave $50,000 to the American Future Fund in 2011 and $2.4 million in 2010, according to IRS filings. The group supports free enterprise and is often at odds with trial lawyers.
Dan Pero, its president, said in an emailed statement that the organization supported the American Future Fund to help “promote free enterprise and improve the fairness and predictability of the legal environment.”
Like super PACs, “social welfare” nonprofits are allowed to accept unlimited donations from individuals, corporations, unions and other organizations. The only funders whose names they are required to publicly disclose are those that make contributions earmarked for political purposes.
That’s as it should be, according to attorney Dan Backer, who is not affiliated the American Future Fund but does work with other conservative groups.
“A nonprofit makes its decisions by a board or other management structure, which is distinct from its donors,” Backer said.
Increasingly political
In 2010, the American Future Fund became far more politically active, reporting $8.6 million in political expenditures as well as millions more for “media services,” “telecommunications” and “mail service/production.” It told the Federal Election Commission that it spent $9.1 million on political advertisements.
Marcus Owens, former chief of the IRS’s nonprofits division, said it is “difficult to conjure up a situation where a particular expenditure would be reportable to the FEC but would not constitute political campaign intervention under tax law.”
Nevertheless, Owens said the organization could make a “straight-faced argument” that its orientation had simply changed over time to become more overtly political.
Of the $25 million that the American Future Fund reported spending to the FEC last year, more than 90 percent fueled ads that urged voters to support or reject candidates.
The group also sought the FEC’s advice on whether mentioning the White House or “the administration” in negative ads ahead of Election Day would be seen as referring to a “clearly identified candidate for federal office.”
Such a designation would have required the group to disclose information about its donors. (The commission deadlocked, 3-3, in a vote along party lines.)
In addition to the presidential race, the American Future Fund spent money in 20 congressional elections in 2012, including California’s 26th Congressional District, where it spent $500,000 attacking Democrat Julia Brownley, who, as a state legislator, had authored legislation to bolster disclosure for political advertisements.
She won anyway, but told the Center for Public Integrity that she is “deeply concerned” about the activities of non-disclosing groups in the wake of Citizens United and hopes to “take immediate action” to strengthen federal disclosure laws.
The American Future Fund also spent more than $542,000 to aid West Virginia Republican Patrick Morrisey in his successful quest to win the race for attorney general, records indicate, and more than $620,000 in a failed effort to sink Missouri Attorney General Chris Koster, a Democrat.
Complaints about the American Future Fund’s political activities have followed it since its creation.
In 2008, the Democratic Party in Minnesota contended that the group needed to register as a political committee after paying for ads that praised then-U.S. Sen. Norm Coleman, R-Minn. The FEC disagreed.
Two years later, in October 2010, consumer group Public Citizen and two other organizations alleged that the American Future Fund’s “huge expenditures” to aid candidates in the midterm election should have triggered requirements that the group register as a political committee and disclose its donors. That complaint is still being considered by the FEC, which often takes years to fully resolve such matters.
CREW, the watchdog organization, filed a complaint against the American Future Fund with the IRS in February 2011 that challenged whether its primary purpose was something other than influencing elections. The group has dismissed the complaint as “baseless” and contends that CREW “only targets government officials and organizations who have a differing or conservative point of view.”
Proposition 32
California’s campaign finance rules require major donors to groups that pay for political advertisements to be named in actual ads.
Thus, when a political committee called the California Future Fund for Free Markets aired ads praising Proposition 32, each advertisement included the disclaimer “with major funding by the American Future Fund.”
One ad criticized lawmakers for making “deals cut in shadows and back rooms” as dramatic music played in the background. Yet the donors to the American Future Fund itself largely remain in the shadows.
The Center for Public Integrity is a nonprofit independent investigative news outlet. To read more of its stories on this topic go to http://www.publicintegrity.org/politics/consider-source
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Leave a Comment:
What a hoot! There is no such thing as a "non-profit"; take a look at any entity hiding behind this facade and you will find that administrators of these groups receive very nice salaries.....they get paid first.
In 2008 ACORN (a non-profit) was used by the current administration to bundle top donors from the US and from other countries. This was already illegal.
Most posters on here blame Churches and other religious organizations for this activity, but nobody wants to mention ACORN. There are many others on both sides of the political coin. It's not a right wing conspiracy - this goes both ways.
SO WHAT???????????????????????????????????????????????????
What a goofy comment. Some other group did wrong, so this suits you? God save us from this "logic."
More than enough has been said about ACORN. Most of it erroneous. And most of all you must stop comparing the left to the right and visa versa. Politics is politics. However, if you want to investigate the issue being talked about here you will need to go to the right to find the crooks and law breakers. You see, that is where the big money is. Where there is this big money there will be corruption. If you havn't heard it before I'll say it now. Big money = corruption. Why? Because those with the most want more and more. And the only way to get it is with money. You know what they say. You have to spend money to make money. It's true.
Hey, I can spend all morning long getting censored by NBC Right Wing News.
whatever it takes to keep those greedy heartless conservatives at bay '' is fair game ''. it comes with the territory
Drop their tax exempt status immediately. If this was happening at a local level the IRS would be all over it. These right wing operatives drop these millions without fear of any examination of what they do.
All politics aside, this whole scenario is a very, very dangerous thing. Dangerous to the Constitution. Dangerous to our election system. This is a serious threat to our freedom. NONE of these people are talking or will return calls. They talk about back room deals? They ARE a back room deal.
We all subsidize these groups. They are tax exempt. Yet we are not allowed by LAW to know how or why. Everything is veiled in secrecy and silence. From what I see here we have a two headed snake named Charles and David.
It is my belief that our own elected officials who have joined up with groups like ALEC have ONLY their own best interests at heart. None of these groups on either side is transparent. And I would remind you that the Koch brothers are NOT republicans. They are members of the John Birch fruit cake club founded by their father, Fred. And the member of Congress who's received the most money from Koch funded organizations? PAUL RYAN. (Look it up.) His election would have put their lap dog at the door of the WH.
The groups are not allowed deductible status as "humanitarian." Strip their rights as non-profits. Strip them of their right to secrecy in donors. And strictly limit political contributions across the board. And if we need an amendment to to it, let's get on with it.
If there is anything so many have suffered and died for it's the right of the citizens to vote and to know CLEARLY where the "free speech" is coming from. If you are trying to sway or buy my vote, I should at least have a right to know EXACTLY who you are. This country beloings to ALL of us. Not just the wealthy whose money allows them a louder voice than yours.
Well said Yankee, non-profit needs to be more narrowly defined as non-political organizations. Contributions which serve to benefit particular political factions are discriminatory in nature, and should not be allowed a tax exemption.
Also, if donations to a cause is such a good and noble thing, why all the secrecy ?
LAWS ! We don't need no stinkin laws. We just wave our flag, thump our Bibles, and Hold up our Constitution and guns, only in self defense though. We yell and scream, lies, and propaganda, with no facts, proof, or truth. It don't matter that our money only comes from a few filthy rich power mongers. You 47% peons had better vote for us if you know what's goog for you. We lye, cheat, and break the stinkin laws but who cares. We will win no matter what it takes.
This message was brought to you by "Better Living through Republican Party" a nonprofit organization for your good living.
Here we go again with the old Right Wing Censor ship Button. Brought to you by the NBC Republican news.
NBC? Republican?? Boy you do not get out much do you.
By the way, even the Des Moines, Ia newspaper, which has backed just about every Democtratic candidate since I first started reading papers in the 1960s, refused to endorse Obama in the last election. Of course if you did not get and read that paper you probably would have never known about it. Reminds me, I need to check to see if the Editor was fired recently?
I don't let republicans on my property anymore and if one of them ends up dead, no loss, they were warned/
They won't like it. Guns are only for Republicans. The rest of us, since we are probably thugs and illegals, should not have guns and most certainly communists. So they will have to get busy with composing laws with wording to that effect. It's only Unconstitutional if the Democrats support it.
Hey ArmedWombat, you better hope a left leaning news group does not report who you are, where you live, and expecially what weapons you have. That would make you a target for all the armed criminals out there who need to "reload". But then most of those types are Democrates so maybe, just maybe they will leave you alone.... Nah.
So folks, how does "Citizens United" work for you? When the wealthy in corporations can give money on that scale, is it called buying an election? So far the people have not fallen for the dupe and millions of Republican dollars have been flushed down the toilet. Kind of makes me feel giddy all over about their waste of dollars.
But the real problem lies in SCOTUS and their right wing decision to treat corporations as people. Can we now execute corporations for selling a bad product that kills people? How about just the CEO's who receive millions from the sales of bad products?
We need to go back and challenge that decision as it is undermining our Republic.
The GOOD Old Boy system with all it's wheels on the ground in this article...Nothing outta the ordinary here THE GOP work this way..They pour Tens of Millions into shadow organization that want a shadow government where the Rich prosper on the Back of the Middle Class...ELECTIONS are bought NOT won...Where The Love of Country and the Love of Money are interchangeable..Where there Morals border on That Of the USSR in the 70's and 80's..yet they claim to HATE socialism......Where the Likes of Carl Rove Grover Norquist and the Kotch Bros sit in there darkened back rooms playing GOD..Then in all glory and LIGHT.....
The AMERICAN PEOPLE COME ALONG and simply DESTROY all there Evil plans...Ten of Millions wasted..there plan blown away...BY DEMOCRACY..BY THE WILL OF THE PEOPLE...It's a great thing...Lets not EVER let these narcissistic a.....holes ever try and take our RIGHT TO VOTE AWAY....Let em do there worst..But remember this is NATION FOR AND BY THE PEOPLE....Not for and by the top 1%....No SIR...your dirty GOP tricks just don't seems to work..Because....Everyone See's you even though you think you are HIDDEN....we can smell the stink and know that it comes from the FEW well to do...Who want to control it all....
Hey , in 2008 primary I voted for our now incompetant appearing Sec. of State. But due the Democratic gods biased way of awarding electorial delegates, even though a majority of people in my state voted the way I did, OBAMA was awarded the majority of delegates from the state. The Democrates State Party works like a shadow government. If they can note get the majority of votes to go the way they want, just rig the election. Ah, Chicago politics at its prime.
conservatives are ALWAYS about gaming the system while bitching about others that do. the will never change and those of us that are STUPID enough to believe their crap will always be happy to help them. all of this can stop if people would wake up. but they are counting on the majority to sleep right through it.
Come to think of it, I don't recall reading of any non-profit company losing their status because of entering into political contests against whatever their charter is. I suspect part of it is due to our pitiful judicial system that allows people in those non-profits to fight any suit against them...at least until past the election they want to influence, then they "kill" the non-profit (Remember: non-profits are people too! The supremes said so!). Then they just go out and start another "non-profit", hire the same people, and the cycle restarts.
Until the so called supreme court sucks it up and makes people reveal their names when they donate to these "front" companies, then this will continue. I won't hold my breath, as the present majority of "supremes" are obviously very right wing.
This talk about unions and their influence has some basis, but they get their money from many, many people and representent many, many people giving small amounts of money, relatively. Most of the right wing non-profits are backed by a few very rich people with specific agendas to profit (literally) only themselves. They really don't care about middle America. Most of them have international interests and send as much of their business overseas as possible. This hurts America, but few people really think about this aspect. When people finally realize that most companies don't represent "American" companies, then perhaps we will make laws that decrease their out of proportion influences.
Rural:
If you want to "decrease a companies out of proportion influence" stop buying their products. Decresed sales = decreased profits = decreased influence.
Then do you think all UNION members names should be disclosed when Union money is spent for political purposes. And since the members "business" is supposed to be working - - should their customer (boss) be allowed to boycot (fire ) them for funding views that can hurt his business.
From the article, (During the 2010 midterm elections, politically active nonprofits outspentsuper PACs, which exist to fund political advertisements, by a 3-to-2 margin.) This is the proof we need to show us how much these so called nonprofits are able to control the outcome of elections. And which political party is most involved with nonprofits?
Go to any evangilical church on Sunday. Almost always you will hear the man at the pulpit bring up the "evil" of Democrats. He will not say "the evil Democrats" but he will use current events in his sermon then use scripture, with a twist, to prove to his congregation that our country is making God angry and he "will punish us" if we allow our leaders to go on. He will always refer to President Obama in a round about way and will never say his name but the congregation knows exactly who he means is the "devil". After all they are on the same page here. In the past it was Clinton who was the devil. Before that it was Carter. Then he will begin to mention names and you will find he has glowing and loving fondness for those like G.W.Bush, Paul Ryan (the Christian Atheist), Murdoch the ignorant, Rove an all the other right wing heroes. When he takes the collection that day the baskets will be overflowing because the congregation knows what that was all about. Time to put their money where their Pastor can do what God wants and help get rid of another Democrat President. Must save America from the devils in the White House!
Churches like these need to loose their tax exempt status. They are also the biggest group of campaign money funnelers in our nation!
Question, Why are you going to such a church. Or are you just doing the same thing you favorite leader did. Go to a church that you do not agree with so you can try to deny what your true beliefs are.
These fascist oligarch pukes are a cancer on democracy. Just like any virus, they hate sunlight.
These Criminal Organizations buy their Tax Exempt Status every election by bribing Politicians and the Justice System...
stop using taxpayers money to subsidize crime against democracy.
I see an awfull lot of people complaining about the "Citizens United" decision. I fail to see any problem with that particular Supreme Court Ruling. Why should Unions, Interest groups, and even foreign institutions have the ability to contribute campaign money by the shipload to advance thier interests in our government while the companies that employ thier members are prohibited? Does it make any sense at all to allow everybody in sight to contribute money to political campaigns except those who produce something, and make a profit? The Supreme Court was absolutely correct in thier ruling, and our "Spender & Thief" only showed his lack of class (yet again) by publicly criticizing them about it in a public forum in which he KNEW they could not respond.
And the beat goes on! ... www.youtube.com/embed/OAOrT0OcHh0? => Rich Man Poor Man.
Yes, cut them all off Start with all of that UNION money that goes to support just Democrats, then Planned Parenthood and of course Moveon.org (which was started to cover up Clinton's sex scandal).
Doing a great job reporting NBC, just like the DNC sent it over to you!
Hey, what about that Dem Senator that the FBI was investigating for sleeping with underage prostitutes? Or the Federal Court's ruling the other day of Obama's abuse of power? What a smackdown that was. Of course your readers could not find that on any of your news reports. How odd.
Two items President Obama has not been concerned about - The Debt and The Budget
No other President in our country's history has allowed such incompetence in oversight
Using the lack of a budget to manipulate - extreme incompetence and neglect of duty
Barack Obama - keeping the camera's picture - out of focus
The rich get rich and if you aint rich your screwed
Dem Drones, Rep Drones.
"There are men in all ages who mean to govern well, but they mean to govern.
They promise to be good masters, but they mean to be masters. "
Noah Webster
American Lexicographer
Remember, your bow is not complere until your nose is in the dirt.
Payroll deductions used to fund any union type activity should be banned. My Dad was a union member for arround 30+ years. He told me many times that the members really had no choice as to how the "union" dues were spent. If a member brought up any subject that the "union bosses" did not like during a meeting, that member would usually need new tires on his vehicle, maybe a new paint job of glass.
The only time the members did not preauthorize a strike before a contract expired, was when an old member who was retiring right away, made a point of order that secret ballots were required by the union bylaws when a strike vote was taken. That same meeting the 3 top local officials were all voted out of office on secret ballots. I was found out at the end of the meeting that the retiree had deliberately not only taken a cab to the union hall, but had arranged for the local police to arrive just before the meeting was over because he had received threats before the meeting because he had let the local president know ahead of the meeting that he intended to call for secret ballots.
Even though he had tape recordings of the threats the local district attorney would not bring charges. (DA was a Democrat).
My Dad had said at home that the Union was needed when he started, but the leadership had become corrupt. Seems there were no term limits.
Laws are only for honest people. Honest people foot the bill for the dishonest. More and more people are getting dishonest. Sooner are later, kaos.
Religion is regarded by the common people as true, by the wise as false and the rulers as useful! SENECA
Arrogance