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More Evidence Key Dark Money Group May Have Misled IRS

Western Tradition Partnership’s alleged big donor said he had actually never heard of the group.

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(Photo courtesy of PBS Frontline)

This story is being co-published with Frontline, which is also airing a documentary on the group tonight. Check your local listings.

New signs emerged Monday that a controversial nonprofit may have misled the Internal Revenue Service not only about its political activities but also about support from a purported donor.

Western Tradition Partnership, or WTP, sent the IRS a letter in 2008 asking the agency to expedite the group's request for recognition of its tax-exempt status. The letter said that without it, the group's principle donor, Jacob Jabs, would pull a planned grant of $300,000.

But Jabs, who runs Colorado's largest furniture retailer, said on Monday he had never pledged money to the group, and never even been in contact with them until press stories appeared naming him.

"I think they just grabbed my name out of a hat to forward their agenda," Jabs told us. "I know nothing about the group, never heard of them, never have heard of them until the last few days, and I did not, absolutely did not, commit $300,000 to start this company." (Jabs also spoke with the Bozeman Daily Chronicle, again denying any connection to the group.)

Although operating at the state level, WTP has won national attention for its attempts to fight campaign-finance restrictions. It successfully sued to overturn Montana's ban on corporate spending in elections, extending the provisions of the U.S. Supreme Court's Citizens United decision to all states. It has also sued Montana investigators over the state's ruling two years ago that the group is a political committee and should have to report its donors.

Documents obtained by Frontline on WTP offer a rare look into the inner workings of dark money groups, tax-exempt organizations that can accept unlimited contributions and do not have to disclose their donors for political ads.

On Monday, we detailed how some of those documents pointed to WTP actively shaping the campaigns of candidates for state office in Montana. The documents, found in a meth house near Denver by a convicted felon in late 2010, indicate possible coordination between candidates and outside groups. Outside groups and candidates are not allowed to coordinate.

Social welfare nonprofits like WTP are allowed to engage in some political activity, but IRS regulations say they must have social welfare as their primary purpose. ProPublica has extensively reported on how some of these nonprofits, known as 501(c)(4)'s after their section of the tax code, appear to exploit gaps in enforcement between the Internal Revenue Service and election authorities so they don't have to disclose where they get their money.

As ProPublica and Frontline have previously reported, when WTP applied for recognition of its tax-exempt status, the group also told the IRS under penalty of perjury that it would not directly or indirectly attempt to influence elections. Yet even before its application, the group sponsored mailers that criticized politicians in the 2008 Republican primary.

The IRS approved WTP's tax-exempt status three days after it received the group's request for expedited review.

Jabs said he only first spoke with WTP earlier this month, after seeing reports that he was the primary donor. Jabs said he reached a WTP official, Athena Dalton, who signed the IRS letter citing him. According to Jabs, Dalton told him she was WTP's secretary and had been instructed to send the letter by two other WTP officials, Christian LeFer and Dan Reed.

"I did talk to Christian LeFer," Jabs said. "They basically admitted they used me to get their 501(c)(4) status." Jabs said he also contacted Reed, who did not call him back.

In an email responding to a ProPublica question about Jabs, LeFer wrote: "Your facts are wrong, I 'admitted' no such thing; that doesn't even sound plausible. Further, what significance this issue might hold escapes me. I don't discuss donors, and I can see that your story line does not need my help."

Reed did not respond to a phone call.

On Monday, LeFer also confirmed the documents found in a meth house were stolen from his wife's car and belonged to him and his wife, Allison. The documents included material from outside groups and candidates, and communications between LeFer and candidates. There were surveys of candidates by outside groups and drafts and final copies of mailers marked as being paid for by the campaigns.

LeFer, described as WTP's director of strategic programming in memos in 2009, said in an email that the boxes of documents were stolen in Colorado in June 2010.

"These stolen documents appear to be a mix of those from my consulting and volunteer work and from my wife's independently owned and operated mail and printing shop," wrote LeFer, whose wife runs a company called Direct Mail and Communications in Livingston, Mont. "Both my wife and I have scrupulously endeavored to avoid any possibility of illegal coordination.

"The stolen documents, which were in the process of being transferred to storage when the theft occurred, have been mingled to infer that the work of two separate people is in fact the work of one person and therefore improper. This is false." (Here is LeFer's full response.)

Candidates have confirmed that LeFer worked with Direct Mail. They have also said LeFer was an adviser on their campaigns.

There is also other evidence LeFer worked with the firm.

On Tuesday, a woman named Elizabeth Sheron said that when she briefly worked for Direct Mail in 2010, LeFer welcomed her to the company. She provided us a check from Direct Mail and an email from LeFer in which he asked her to elaborate on her abilities and experience. LeFer also wrote that he hoped to increase the membership of one of his social welfare nonprofits to 250,000 people in two years.

Sheron said she did work for Direct Mail, WTP and other related groups. “They kind of had you involved with every project…no matter who was paying you," she said. “I was paid by Direct Mail but I was doing stuff for other groups." Sheron worked there only briefly before quitting.

In an email, LeFer said he didn't think it was useful to try to recall “snippets of information from years back." He said if reporters sent “the entire file of materials you have and you want to discuss at a later time, please do so."

The documents from the meth house eventually landed in the office of Montana investigators, who couldn't do much with them because they couldn't definitively prove they were real, or how they ended up in a meth house.

On Monday, a lawyer for LeFer confirmed them by sending a letter to Montana authorities explaining that the car was stolen from a homeschooling conference in Denver. The lawyer said the documents were stolen property and “evidence regarding the criminal investigation of the car theft in Colorado." The lawyer also said the documents contained sensitive information, and demanded that the documents be turned over to LeFer.

Montana investigators have sealed access to the documents, saying that now that someone has asserted ownership, they are unable to further discuss or release them until a court rules on the matter.

Western Tradition Partnership is now known as American Tradition Partnership. So far this election season, the group has advocated for candidates in Montana's Republican primary, putting out a press release announcing that 12 of those candidates won. It also has launched a newspaper called the Montana Statesman, which claims to be the state's "largest & most trusted news source," to be the state's "only non-partisan newspaper" and to have been founded in 1889.

A second edition of the purported newspaper was mailed to voters in Montana last week. Like the first edition, the 12-page paper contains many articles attacking Steve Bullock, the Democratic candidate for governor who as attorney general fought the partnership's lawsuits against the state. One on the front page accused him of being soft on child molesters.

Other stories attacked the state auditor, a Supreme Court candidate and the secretary of state.

On its website, the group describes itself as a “no-compromise grassroots organization dedicated to fighting the radical environmentalist agenda."

In a statement responding to the story Monday by ProPublica and Frontline, American Tradition Partnership, or ATP, said it had not coordinated with candidates. "I have never met or spoken to virtually all the candidates on the ballot," wrote Donny Ferguson, the executive director of the partnership and the editor of the Montana Statesman, on the Statesman website.

Ferguson also said the law was always on the group's side, and that the nonprofit had always obeyed every applicable law. He denied that the group told people how to vote. “ATP does not, and never will, tell voters which candidates to vote for," he wrote. “ATP speaks on the issues, informing voters where candidates stand and of their public records."

The IRS defines political advertising much more broadly than election authorities, asking whether social welfare nonprofits directly — or indirectly — engaged in campaign activities.

clarence swinney

Oct. 31, 2012, 8:53 a.m.

NO EVIDENCE TAX CUTS FOR RICH STIMULATES JOBS GROWTH

TAX CUTS MUST HIT TARGETED AREAS TO CREATE JOBS

Reagan $750B Tax cut with 60% for top(70-28) got $140B increase in Income Tax Revenues
His job growth of 175,00 per month was 24% below Carters 218,000

Bush Tax Cuts and 31,00 per month to Clinton 237,000

Bush Worst 8 in history outside Great Depression
It was Robber Baron Era all over——
Since 1945 Democratic presidents created twice as many jobs as R Presidents

Since 1980 three R presidents for 20 years—-R Senate 18 and House 12 plus Total Control for 6
Took 600B budget to 2500B
Surplus to 1400B Deficit
Added 9000B to 1000B Debt
Created 99,00 jobs per month to Carter + Clinton 22,000
Initiated our involvemet in 10 foreign conflicts
Carter + Clinton=0
Great Recession
Smashed Housing Industry
Turned Wall Street into Gambling Casino instead of Investment in businesses and jobs
Flushed money to top10%
Outsourced our industries
closed 58,000 plants in ten years
Hurt Middle Class by not increasing Minumum wage and destruction of unions plus killing jobs
all for Wall Street $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$  GOD

The above statements indicate the Citizens-United case can be thrown out because it was fraudulently determined. WTP fraudulently represented its position and thus had no legal standing in the proceedings as a plaintiff.

This was inevitable.  The provision in Citizens United barring coordination is impossible to effectively enforce and unlikely not to be violated.  How much incentive is there for a donor to give or for political operatives to set up a PAC to collect money to promote a candidacy if the money is not to be used for any activities that are coordinated with the candidate.  The whole concept is just a fig leaf to cover unbridled influence of moneyed interests over the election process, a ridiculous bad joke on our democracy.

If the whole idea that candidates would not coordinate with people who are lavishly spending money on behalf of their candidacy is not a big enough joke for you, how about the idea that a political consultant does not talk to his own wife who runs a direct mail business about any of each others work relating to political campaigns.  Or how about the idea that Donny Ferguson could not possibly have been coordinating with any candidates since he rarely spoke to any of the candidates themselves.  There’s such a thin coating of chocolate on this BS, you wonder why they even bothered to coat it.

Sgt. Barefoot

Oct. 31, 2012, 6:40 p.m.

The ultra low barometric system was indicative of the path that nature followed and the IRS did not.

Unfortunate that “Montana investigators have sealed access to the documents, saying that now that someone has asserted ownership, they are unable to further discuss or release them until a court rules on the matter.” Documents that provide evidence of organized crime should not be returned to criminals by the courts.

I used to enjoy this website, believing that it was truly a non-partisan investigative journalistic site.  Ha!  This website obviously leans LEFT consistently.

Where’s the “investigative reporting” into the Bengazi, Libya COVERUP where the US Ambassador to Libya, Chris Stevens, two ex-Navy Seals, and Sean Smith were MURDERED while the Obama administration watched this go down in REAL TIME?!?  Where’s the investigative reporting on this, right before a presidential election. 

Unsubscribing…I can get journalistic propaganda on MSLSD on CNBC, etc. 

Journalism died in 2007.

MJ: Exactly!! The Jan 17th Jon Stewart “Super PAC” show illustrates how easy it is to get around that ludicrous” non-coordination” provision - as only Jon Stewart (in “non-coordinated” collusion with Steven Colbert) can do it. The horrifying truth through humor/satire.

Oh, Lauren, you must be a young pup.  Journalism died long before 2007.  It died a little when reporters started getting Master Degrees and insisting on being called “journalists”.  It died a little more when Managing Editors became political wannabes and mouthpieces of big advertisters.  It died a little more when the accounting and advertising departments started deciding what would be printed and broadcast.  It died a little more when the investors who own most big media outlets decided that a 15% annual return on investment was not enough and decreed that the people who reported the news were expedible, while the people who counted the money weren’t.  It died a little more when they began tailoring their coverage to satisfy a handful of shrill self-appointed “media watchdogs” who barely even bothered to hide it that their real purpose was to intimidate media into spinning the news toward their ideology and their politicians.  But mostly it died when the media forgot its duty to comfort the afflicted and afflict the comfortable and to tell the truth and raise hell.  Good night and good luck.

The classification of ATP, WTP and similar organizations as “social welfare” nonprofits makes a mockery of the term and truth.  It shows how far money will go to buy our democracy.  Just ask people in Montana, where they know their history of political corruption far better than 5 supreme court justices.

Lauren obviously did not watch the Frontline report nor read the timeline of events in Bengazi.  I realize that the Bengazi tragedy has become a cause celebre for the far right because it’s election season.  Just remember that no similar witch hunt was undertaken when the marine barracks were blown up in Beirut during Reagan’s first term.  Why?  Because both political parties exercised more common sense 30 years ago.

First, thank you ProPublica and Frontline folks for reporting what no news organization in Montana would touch. (It took an out-of-state newspaper to break the long-ignored and actively surpressed story that scores of people in Libby were dying horrible deaths from the asbestos mined there by WR Grace.)
I dropped my ballot off at the Silver Bow County courthouse in Butte the other day. About half a block away is the Historical Society’s archives, housed in the old fire station. In those archives are photos of that same courthouse early in the last century, with sandbagged .30-cal. water-cooled machine guns mounted on the steps, manned by the equivalent of today’s National Guard. When Anaconda ran the state, that’s how it dealt with unruly miners who were being worked to death miles underground.
Montana citizens revolted and passed our anti-corruption amendment to the state Constitution in 1912. And now the Supreme Court says corporations are people too.

Peter K. Pleitner

Nov. 4, 2012, 12:02 p.m.

Ok, I can’t resist. “MJ” your second comments on journalism are hard to ignore.
One of the foundation stones layed during the Age of Enlightenment for the US of A is an informed public. Voters decisions were to be informed via the new printing industry and public speaking. But since then we’ve acquired psychoanalysis, PR, radio, TV, polling, the Internet, and an election industry. Today, almost 90% of campaign financing goes to electronic media. The decision called “Citizens United” precisely illustrates how reason can easily be corrupted, when in fact it’s purpose is to unite the force of money against citizens. Although I fear climate change, I wish Al Gore’s “Assault on Reason” and particularly the second half of his chapter 3, The Politics of Wealth, would become common knowledge in this country. US citizens should be made to suspect if not fear “the media”. The Germans have. And the Allies made sure in 1949 that their election law prohibits the use of electronic media until five weeks before the vote. Why? Göbbels. Radio was regulated in the US of A. Not in Germany, Italy and Russia, There radio was immediately used to manufacture public support for extremism and the concentration of power. There are no circuits or time for critical thinking between the eyes and ears before emotion dominates the formation of opinion and belief. Can you imagine being impressed by a magic show if you had to read what you’re going to see. Perhaps a more productive means towards placing limits on campaign finance is to re-regulate the spending of that 90%.

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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