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Dark Money Group’s Donors Revealed

Bank records released under a court order show that Western Tradition Partnership’s donors included an Oklahoma businessman, a Colorado builder and other dark money groups linked to Ron Paul. 

A check shows a donor's support for the campaign of Mike Miller, who defeated John Ward, that was released when the Montana district court judge unsealed the bank records of Western Tradition Partnership at the request of Frontline and ProPublica. (Photo courtesy of PBS Frontline)

Nov. 5: This post has been updated.

This story was co-published with PBS Frontline.

The donors wrote notes on their checks like "Go get 'em!" or "Stop Obama." They scrawled in names of candidates for office in Montana and Colorado, or simply "oil & gas."

But unlike donors to political committees, the names of those who gave to Western Tradition Partnership, or WTP, were never supposed to be made public.

That changed Friday after a Montana district court judge released the social welfare nonprofit's bank records at the request of Frontline and ProPublica, saying citizens had a right to know.

It was the first time that a court has ordered a modern dark money group's donors to be made public, firing a warning shot to similar organizations engaged in politics.

The WTP bank records, which cover a period from March 2008 to December 2010, show that the group raised almost $1.1 million from other social welfare nonprofits, corporations, a political committee and individuals. It received $650,000 from the nonprofits, $70,000 from an Oklahoma businessman and his company and $50,000 from a Colorado homebuilder. Most WTP contributors, however, gave on a smaller scale: 495 of the group's 607 donations were for $100 or less.

The total amount raised by WTP, now known as American Tradition Partnership, was not large, compared to the tens of millions of dollars dark money groups like Crossroads GPS and Americans for Prosperity have collected in the 2012 election cycle.

But the details available on WTP, which has worked to elect conservatives in Montana and Colorado and has won national attention for a lawsuit that led the Supreme Court to apply its Citizens United ruling to states, are striking.

The bank records highlight WTP's ties to groups backing libertarian Ron Paul. The Conservative Action League, a Virginia social welfare nonprofit run at the time in part by John Tate, most recently Paul's campaign manager, transferred $40,000 to WTP in August 2008, bank records show. Tate was also a consultant for WTP. In addition, WTP gave $5,000 to a group called the SD Campaign for Liberty, affiliated with Paul and the national Campaign for Liberty.

The bank records also illustrate how cash passes between dark money groups, further obscuring its original source: $500,000 passed from Coloradans for Economic Growth to WTP to the National Right to Work Committee, over a few days in October 2008. Coloradans for Economic Growth and the National Right to Work Committee are social welfare nonprofits that don't have to disclose their donors. Tate and others paid by WTP were also once associated with National Right to Work.

WTP's biggest donation that wasn't simply a pass-through, for $110,000, was from the Spur Education Fund, an obscure nonprofit with no website, about which little information is available. Incorporated in June 2010, out of the same Denver law firm address as Coloradans for Economic Growth, the fund transferred money to WTP four times between July and September 2010.

Scott Shires, the man who incorporated WTP in Colorado in 2008, appeared to have signed off on one of those contributions, raising questions about whether WTP was also affiliated with Spur. A handwritten note on a transfer document for $40,000 from Spur, dated Sept. 2, 2010, said: "Deposit into Western Tradition Partnership acct ending 5610 as per Scott Shires phone request."

Shires, who says he has been the public face of about 600 committees over the past 20 years, has maintained he had very little involvement with WTP. On Sunday, he said he wrote some checks for the Spur Education Fund but didn't remember anything else.

A check made out to the Western Tradition Partnership, showing support for the campaign of Mike Miller in the Memo."It's a game," he said. "There are people that don't want their names connected to certain committees, and I was the public name period. And that was case with WTP."

Social welfare nonprofits, unlike super PACs, are allowed to keep their donors secret. Although they can spend money on politics, their primary purpose is supposed to be social welfare, or helping the community at large. ProPublica has written extensively about how some of these groups exploit gaps between election authorities and the Internal Revenue Service, the regulatory agency for social welfare nonprofits, to spend millions of anonymous dollars on political campaigns.

As some nonprofits have pushed the limits, regulators are starting to push back at the state level. Besides Montana, California's Supreme Court ordered an Arizona social welfare nonprofit to reveal the donors for $11 million spent to oppose a California tax initiative and to support a ballot measure restricting union dues collection by Sunday. After saying it would appeal to the U.S. Supreme Court, Americans for Responsible Leadership backed down and announced its donors Monday morning. Who were they? A social welfare nonprofit and a trade association, neither of which has to release its donors. California regulators accused the group of "campaign money laundering."

In an article last month, ProPublica and Frontline described how WTP may have misled the IRS in its initial application for recognition. The bank records we obtained raise new questions, showing no money came in from the man WTP claimed as its primary donor when it asked the IRS to expedite the approval of its application. The bank records also indicate the group raised enough money to require it to file tax returns for 2009 and 2010, yet the IRS has no record of tax returns for WTP after 2008.

The records also raise more questions about potential coordination between candidates and WTP. Candidates, who have strict contribution limits, are not allowed to coordinate with outside spending groups like WTP, which can raise unlimited amounts of money.

The bank records show that Allison LeFer, the wife of former WTP official Christian LeFer, signed almost all WTP's checks.

Allison LeFer runs a printing company that did work for Montana candidates in 2008 and 2010, many of whom WTP also supported. The printing company, Direct Mail and Communications, shared a post office box with WTP, bank records show. In August 2008, WTP also transferred money to a business checking account for "DMC Consulting," possibly another name for LeFer's company.

The bank deposits for WTP include a $557.50 check in June 2010 to Direct Mail from Friends of Dan Kennedy, the campaign committee for Kennedy, who won election to the Montana state legislature in 2010. Kennedy, who reported paying this amount to Direct Mail in campaign filings to the state, didn't return phone calls or an email Sunday.

So far, Christian and Allison LeFer have not responded to questions about the bank documents from ProPublica and Frontline. Neither has Donny Ferguson, who now runs American Tradition Partnership.

A Frontline documentary broadcast last month showed how WTP helped to shape the campaigns of candidates in state races in Montana.

After that documentary and a story showing how documents found in a meth house in Colorado pointed to possible illegal coordination between WTP and campaigns, Christian LeFer said the documents had been stolen from his wife's car and mingled in a way to suggest coordination.

LeFer insisted that he and his wife had "scrupulously endeavored" to avoid any possibility of coordination.

A check made out to the Western Tradition Partnership, showing support for the campaign of Greg Brophy in the Memo.Montana authorities subpoenaed the bank records as part of an ongoing investigation. After the state said WTP should have registered as a political committee and reported its donors in October 2010, the group sued. That lawsuit is due to be heard in March.

Once the records were released Friday and account information was redacted, they were sent to Frontline. The bank records will be available to the public on Monday.

It's not clear whether the bank records in the two WTP accounts reflect all of the money flowing in and out of the group. For instance, a list of prospective donors leaked by a whistleblower who worked for WTP in early 2010 says that a man in Colorado helped "steer us $50k last cycle" from another social welfare nonprofit. Yet there is no record in the bank documents of that donation.

In its one tax return filed with the IRS, WTP claimed it raised almost $666,000 in 2008. Its bank account records show it raised $687,000, most of which was passed on to the National Right to Work Committee.

It's not yet clear how most WTP donors will react to losing their anonymity.

Donald Hood of Longmont, Colo., gave $6,000 in 2009. On Sunday, he said he gave the money not for a specific candidate, but for a specific issue on the ballot he didn't remember. He was upset his donation had been revealed.

"That's nobody's business," Hood said. "Most of my donations are to groups where my donations are anonymous….The fact that you have my name and know I gave money to an organization one time is not really too pleasant, to my mind."

The biggest individual donor to WTP was Norman Asbjornson, a Montana native who gave $50,000 to WTP in August 2008. AAON Inc., Asbjornson's heating, ventilation and air conditioning manufacturing company in Tulsa, Okla., gave $20,000 to ATP in October 2010. (The donation from Asbjornson was made public in a story by the Center for Public Integrity last week.)

Asbjornson couldn't be reached for comment Sunday. He has said he believes taxes inhibit growth and has given more than $160,000 in federal races since 2008, including more than $65,000 to the Republican National Committee, according to the Center for Responsive Politics.

The second biggest individual donor was Larry Mizel, who gave $50,000 in October 2010. Mizel founded M.D.C. Holdings, a homebuilding and home financing company in Denver. He's a major contributor to Republican causes, giving $100,000 to the super PAC American Crossroads in August. Mizel, who couldn't be reached for comment Sunday, is also on the board of the Republican Jewish Coalition, a social welfare nonprofit that is supporting Mitt Romney for president.

New Leadership Colorado, a political committee, gave WTP $45,000 in October 2008. The IRS website on political committees has no records for any activity of the group in 2008 and sparse records for 2010. New Leadership is registered out of the same law firm address as Spur Education Fund and Coloradans for Economic Growth.

Another donor was K12 Management, which gave $20,000 in October 2010. K12 Management, which bills itself as the "largest provider of online education for grades K-12," was co-founded in 2000 by former Education Secretary William Bennett and has been at the center of controversy over the rapid rise of for-profit virtual schools.

In some ways, WTP's bank records show it ran like many small local businesses. The group overdrew its accounts on several occasions. It bought merchandise at Big Bear Sports Center and purchased meals at restaurants like Montana's Rib & Chop and Wahoo's Fish Taco.

Most of the group's checks even misspelled its name, bearing the moniker "Western Traditon Partnership."

Excellent work, Pro Publica and Frontline.  I live in Colorado and work for a REAL nonprofit, one that helps human beings in need and not political causes in another state.  We are paying attention to the abuse of the nonprofit legal status as granted by the IRS in these situations and we look forward to other judges revealing the names of additional shadow donors over time.  There should be federal hearings involving the IRS on this subject matter—where is Darrell Issa, the moral crusader?

This is just getting ridiculous.  And almost nothing is being done about it. Lying to the IRS and you’re an organization… who cares!

“It’s a game,” [Shires] said.

Overthrowing democracy is a “game” to the pseudo-American right?

I saw the program and read your report.  While I sympathize with those attacked by dark money, I also understand why donors are driven into the shadows.

Not long ago, a local restaurant manager donated to support traditional marriage.  When identified, obnoxious gay activists showed up at the restaurant and harassed customers for days until the man was forced to quit - a story that Pro Publica and Frontline didn’t cover.

No one should ever suffer retaliation for speaking freely.  As long as the media allows leftists to harass and attack moderates and conservatives, many of us will be forced to support campaign operations that protect our free speech - and our livelihood.

Herb Ruhs, MD

Nov. 5, 2012, 7:03 p.m.

I am getting pretty tired of ProPublica.  Lot’s of muck raking and not attention to the real problem of criminals getting away with crimes and why.  Is ProPublica a real journalism site, or is it part of the massive disinformation project?  I am beginning to lean toward the later case.

Herb Ruhs, MD

Although I think this a good article and as well I will state that I am opposed to PACS, non-profits and Unions mucking in the political process by raising and donating huge sums, I must also state that ProPublica continues to pounce the Republican supporters and fails to call out the Democrat supporters. This adds up to bias reporting.

@ herb @ gillen - I concur.

I agree with some of the above.  Seems ProPublica is NOT really for ALL the Public.  I’m tired of organizations that say they are for everyone but are really just a Democratic promotor.  How they can call themselves a “non-profit” for all people is beyond me. 

Why don’t you report what is really the truth about all the “foreign people” who donated to Obama’s campaign?

Please read this article before you say Propublica isn’t neutral..
A Pop-Up Problem
By Kim Barker
November 1, 2012 8:00 a.m. EDT
This post was co-published with TIME.

The rules and regulations governing dark-money groups are almost as mystifying as the names of their donors. In general, the Federal Election Commission requires groups that make electing candidates their “major purpose” to register as political committees, which means they have to disclose their donors.

But other groups can remain obscure simply by telling the FEC that their major purpose is not electing candidates—that they are, rather, “social welfare” nonprofits or trade associations. That means they have to identify only those donors who specifically earmark their money for political ads—something that rarely happens.

Under the tax code, these groups don’t have to publicly report any of their donors’ names. They are allowed to support candidates for office as long as promoting social welfare or industry is their primary purpose. But politics moves much faster than federal agencies, and by the time the Internal Revenue Service discovers that a group has crossed the line from nonprofit promotion to politicking, many operators have boarded up shop and moved on.

Take the liberal group Americans for Stable Quality Care. A rare coalition of pharmaceutical and health-care associations and unions, it spent more than $43 million in 2009 on ads promoting health care reform. After reform passed in 2010, the group changed its name to the Citizens for Strength and Security Action Fund and spent almost $3 million supporting liberal candidates for office in the midterms. After the 2010 elections, the group went dormant, and its website was taken down.

But in 2011, a new group formed: the Citizens for Strength and Security Fund, with the same Beltway consulting firm and the same clip art and message as the action fund’s website. It has spent an unknown amount on ads criticizing the Republican candidates for Senate in Montana and New Mexico this year. But finding out much more than that is difficult. The group’s address is a post-office box. Neither of the two people listed as being in charge returned calls for comment or replied to an email submitted via the group’s website.

A ProPublica examination of 72 nonprofits active in the 2010 election found that 32 that initially told the IRS they would not be involved in politics eventually filed tax returns revealing that they were. Many of these nonprofits are pop-up groups — outfits that form quickly just before an election, spend on one campaign or another and then disband, sometimes after filing just one tax return. By the time the IRS has time to investigate, some groups have ceased to exist.

The IRS, which assigns less than 1 percent of its staff to overseeing nonprofits, told Congress in September that more than 1,600 groups were seeking recognition as social-welfare nonprofits. Not all are political, of course, but it’s safe to assume that a growing number aren’t strictly charitable, either. “The corruption of democracy by these groups is going to grow far worse in the years ahead,” said Fred Wertheimer, president of Democracy 21, which works to shrink the influence of money in politics. “This is just the beginning.”

For more on Dark Money, read Dark Money Rises.

Contact the author: Kim Barker.

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Miles, Thank you for your informative post.

Leonard Welshons

Nov. 6, 2012, 3:02 a.m.

Thank goodness your reporting over the months I’ve been following ProPublica’s investigative efforts, have shown me that only Conservatives and Republicans are involved in these devious endeavers. It’s nice to know that Liberals and Progressives are so highminded and forthhright.

Rather than whine about the bias, guys, FIX IT.  Name one of these secret organizations funding the Democrats while hiding their donors.

I’m not saying they’re not there.  I’m sure they are.  But implying that they’re being ignored without saying anything actionable?  Well, I could refer to “veiled racism” or something in all your posts.  How credible would that make me without any specifics?

Further, does it matter which side the organizations are on?  The core conceit is wrong and needs to be stopped.  Whether one side or the other is fingered is irrelevant, no?

lolll…there is a little hint in the comments:  Unless you know your doctor very, very well - as in, you dine and drink with him or her - don’t discuss “Obamacare” at your doctor’s office.

At least not until you comprehend the fact that the Hippocratic Oath kind of slid to the wayside among much of the medical community as artificial supply constraints

http://www.gnyha.org/8067/Default.aspx

The Balanced Budget Act of 1997 (BBA) generally limited the number of residents for which teaching hospitals could be reimbursed to the number of residents reported in a prior year. The caps were set based on the number of allopathic and osteopathic residents training in the acute inpatient unit of the hospital and eligible non-hospital settings as of the hospital’s most recent Medicare cost-reporting period ending on or before December 31, 1996. In establishing the resident caps, Congress sought to achieve two principal goals—control the growth in physician supply and control the growth in Medicare spending.

In the mid-1990s, with the increasing prevalence of managed care as a preferred type of health insurance, there was growing concern expressed by policymakers and economists that the then-popular “gatekeeper model” being used by certain health insurance companies would drastically reduce the need for certain kinds of physician specialists. The gatekeeper model was built on the premise that requiring an enrollee of a health plan to first see his or her primary care physician before being able to access a specialist would reduce unnecessary utilization of specialty services and encourage more effective use of primary care services. In concept, the primary care physician would act as a “gatekeeper,” only referring patients to non-primary care specialists when such visits were truly needed and warranted. Certain physician workforce researchers (most notably, Jonathan P. Weiner, Dr. P.H., who estimated an oversupply of 165,000 physicians by 2000) analyzed the effect of staffing models of health insurance plans that used various forms of gatekeeper models and concluded that the nation was facing an impending oversupply of physicians. The Association of American Medical Colleges also issued statements expressing concern about an impending physician oversupply.

having had the anticipated and desired affect of causing physician shortages

usatoday30.usatoday.com/news/health/2009-08-17-doctor-gp-shortage_N.htm

The number of U.S. medical school students going into primary care has dropped 51.8% since 1997, according to the American Academy of Family Physicians (AAFP).

Considering it takes 10 to 11 years to educate a doctor, the drying up of the pipeline is a big concern to health-care experts. The AAFP is predicting a shortage of 40,000 family physicians in 2020, when the demand is expected to spike. The U.S. health care system has about 100,000 family physicians and will need 139,531 in 10 years. The current environment is attracting only half the number needed to meet the demand.

making medical services a seller’s market and resulting in much of the medical community belonging to the Republican base of the 20% who hold 89% of America’s wealth.

www2.ucsc.edu/whorulesamerica/power/wealth.html

@John… the Left routinely launders donations through the Ford Foundation, MoveOn, ACORN, and Soros (which funds ProPublica).  Unfortunately, the media (including ProPublica) police themselves and subscribers must decide which media outlets are and are not credible. 

Reports like this simply remind us that ProPublica is no different from other leftist media outlets - they’re just a bit more discreet (nuanced) about their leftist bias.

I LOVE these titles that they use to disguise their purpose. Right To Work means anti union committee, Responsible Leadership means leadership by Our people not yours, Americans for Prosperity means that the opposition must be Americans for Poverty. And the shell games they play to keep from being identified. They dont want you to know that the rich guys are buying the government just like they buy everything else.

ProPublica: Thanks for the update! The Frontline show on this was riveting! And I now have a much more in depth understanding of the post “Citizen’s United” explosive growth of “non-profit” 501(c)(4) “organizations” - which generally, as David G points out, come with titles which perform to the polar opposite of implied intentions.

The most hopeful sign I see is that Montana, regardless of party, seems to want to make the source of money being poured into their elections transparent and open to scrutiny. In their case, of course, due to the fact that most of the well-funded “interlopers” come from out of state.

My own reaction to the inundation of well-funded mud-slinging, lying, hateful ads and mailers was to simply turn off the source. Recorded all tv programs and fast-forwarding through the commercials. Didn’t watch the “news”. Threw out all the mailers without reading them. Found my voting information online from reliable sources and cross-checked those.

And in the end, I find that I’m one of a handful of people in my area who actually cares enough to cast a ballot. All ballots in my area are mail-in so nobody has to go somewhere else to stand in line. A pen and a stamp is all it takes - but too many of us are just too fed up with the corruption and angry voices to participate. Depressing!

Clark, I think you’re confusing real organizations which have goals that overlap with what Democratic candidates espouse (though never seem to get around to supporting) and organizations that exist for the purpose of concealing large political donations.

Notice that no report suggests that the Koch Brothers (for example) shouldn’t be allowed to donate money to whatever campaigns they choose.  The anger is over “cover organizations” like Americans for Prosperity, which seems to only funnel money into propaganda and shield the donors from scrutiny.

Mind you, I think the “duality” of our political “spectrum” is the biggest sham going, so I’m not saying one side is right or another is wrong.  They both support candidates who want to export jobs, conduct wars of aggression, entrench big business (legal and illegal), and exclude non-mainstream voices, so siding with either is beyond my ethical range.  What I am saying is that ACORN isn’t a SuperPAC or “Dark Money” like the article is covering.

@ John… ACORN isn’t a superpac, but leftists donate to leftist organizations (i.e. ACORN, MoveOn, Ford Foundation, and Soros) while conservatives and independents donate to superpacs (Americans for Prosperity, etc.).  These groups, leftist or conservative, allow donors to direct private donations to groups that support their values.

I won’t speculate why Soros-funded ProPublica and Ford-funded Frontline complains about 501c4s that threaten their political values or the values of their shadowy donors, but I look forward to seeing ProPublica’s expose on the secret donations to the Open Society, Ford Foundation and the dozens of other prominent leftist fundraising machines.

Richard Tellier

Nov. 6, 2012, 4:09 p.m.

What is so hard from being a legal outfit than a non legal outfit?
Is it that they fool people into believing that they are local Non profit helping people at home and taking their donations and using them in out of state campaigns?
A way to raise more cash for campaigns?
I just don’t understand why would someone want to start something they know would be illegal.
With a Billion dollars spent on this election campaign I am sure that money would of been well spent somewhere else. Like creating jobs.
I am starting to believe in State campaign caps. How much money each campaign can spend on a election in each state. Doesn’t matter where it comes from. Once the total has been reached your done.
Stiff Fines would then be impossed on the canidates and their campaigns. It would save us from constant bombardment and stop all this sillyness. Might even help states with revenue with the illegal ones.

” the Left routinely launders donations through the Ford Foundation, MoveOn, ACORN, and Soros “

That is utter nonsense and this story is just a drop in the bucket compared to the Karl Rove group. Republicans cannot win without cheating period.

@ Bill Choice - The City of Los Angeles serves ~4.3 million and employs about 40,000 with a budget of ~$7 billion/year. 

The Los Angeles Unified School District (LAUSD) serves ~650,000 students and employs about 80,000 with an annual OPERATING budget of ~$12 billion (which doesn’t include their $22 billion construction budget).

Even if class sizes were capped at 20 students (they aren’t), the LAUSD would only require 32,500 teachers.  This means that, at best, 47,500 LAUSD employees don’t teach.  Each one of those employees does, however, pay ~$110/month is union dues, which generates ~$8.8 million EVERY MONTH for the union leadership and DNC.

That’s one union, one month.  Multiply that by all of the other unions that extort dues from employees and taxpayers for Democrats across the US each year, and Karl Rove doesn’t look quite as threatening - especially to our children.

@Clark Baker:  Kind of “winging it” there, aren’t you?  It is relatively easy - as in Wikipedia - to find that the LAUSD had 45,000+ school teachers in the 2007-08 school year, blowing your initial premise plumb out of the water.

en.wikipedia.org/wiki/Los_Angeles_Unified_School_District

And you’re further assuming - no, you’re further intentionally implying for motives unknown - that there are no “management” types in the LAUSD.  That is, you’re implying that everybody employed by the LAUSD is a union employee.

lolll….that would pretty much obviate the need for a union, wouldn’t it?

And the student count you give does not tell the whole story.  For example, the fact sheet at

notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/LAUSDNET/OFFICES/COMMUNICATIONS/COMMUNICATIONS_FACTS/11-12FINGERTIPFACTSREVISED.PDF

provides information that is both interesting and pertinent:  Kindergarten through 12th grade enrollment this year sums to 664,233.

But throw in the adults who are also being educated by the LAUSD, and that number blasts up to <b>919,930</i> - to the immense benefit of area employers.

No, I’m not from L.A….or even California.  But I am fond of - to borrow from the late, great Paul Harvey - “the rest of the story”.

This article is part of an ongoing investigation:
Buying Your Vote

Buying Your Vote: Dark Money and Big Data

ProPublica is following the money and exploring campaign issues in the 2012 election you won't read about elsewhere.

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