What’s Known About the Groups Behind the $11 Million ‘Money Laundering’

(401(K) 2012: Flickr)

(401(K) 2012: Flickr)

Here’s what we can glean about the groups that funneled $11 million into California to try to defeat Gov. Jerry Brown’s tax measure — Prop. 30 —  and to pass Prop. 32 — which would limit unions’ ability to raise political funds:

The state Fair Political Practices Commission announced earlier today that Americans for Responsible Leadership, the Arizona group that last month made the $11 million contribution to a California PAC, had identified the “true source” of the donation: a Virginia-based group called Americans for Job Security. That organization in turn funneled the money back to Americans for Responsible Leadership through yet another group, the Center to Protect Patient Rights. We cannot find a website for it. The Center’s address is listed as a P.O. box in Phoenix.

Completely lost? Let’s review the steps — steps which the FPPC characterizes as “campaign money laundering” under California law:

  1. Americans for Job Security (Virginia) sent money to the Center to Protect Patient Rights (P.O. box in Phoenix)
  2. The Center to Protect Patient Rights sent it to Americans for Responsible Leadership (Arizona)
  3. Americans for Responsible Leadership in turn sent $11 million to the Small Business Action Committee PAC, here in California. One might assume the PAC lost no time in dumping the money into TV ads to defeat Prop. 30 and to pass Prop. 32. The Sacramento Bee’s Capitol Alert lays out the money trail, complete with dates.
(T)he money trail in a case like this $11 million contribution to the California initiative campaigns leads not to individuals, but to a few organizations that are impervious to public scrutiny.

Now we have the names of the committees involved. How about the people or companies who were the source of the money in the first place? We’re in the dark about that, thanks to federal law and court rulings that allow a wide spectrum of political donors to keep their identities secret.

But a few facts about Americans for Job Security and Center to Protect Patient Rights have come out:

Americans for Job Security in Alexandria, VA

  • OpenSecrets a project of Center for Responsive Politics shows that Americans for Job Security has spent about $15 million this year against Democrats running for federal office and about $650,000 against Republicans.
  • Little is known about Americans for Job Security (AJS) beyond the fact it is apparently run by Stephen DeMaura, a 20-something former head of the New Hampshire Republican Party. The New York Times pried open a window on the organization two years ago when AJS showed up as a major donor in a local initiative campaign in Alaska. Americans for Job Security spent $1.6 million to oppose expansion of a gold and copper mining operation near Bristol Bay — arguably fighting the creation of jobs. A subsequent state investigation found that a local millionaire whose fishing lodge might have been impacted by the mining operation recruited AJS’ help in promoting a local ballot measure to block the mine. As the Times reported:

The group ended up in Alaska through [the work of Michael Dubke, former head of AJS] for opponents of the proposed Pebble Mine, led by an Alaska financier, Robert Gillam, whose private fishing lodge could be affected. The opponents said the mine would endanger commercial fishing and pushed a ballot initiative aimed at imposing clean-water restrictions on it; its backers said the mine would create jobs.

Mr. Dubke’s work for Mr. Gillam was called Operation Trenchcoat, documents show, and involved finding out who was behind a pro-mine Web site called Bob Gillam Can’t Buy Alaska. Mr. Gillam testified that he spoke with Mr. Dubke about Americans for Job Security, and decided to join by giving $2 million in “membership fees,” and that he “had high hopes” the money would be used to oppose the mine. (The ballot initiative ultimately failed.)

State investigators found that the advocacy group quickly passed almost all the money to another nonprofit, Alaskans for Clean Water, set up to campaign for the referendum by a group that included Art Hackney, a local Republican consultant and board member of Americans for Job Security. Mr. DeMaura told investigators that while he may have talked to Mr. Dubke about the mine issue, he decided to spend the money “based upon his own research and judgment,” and that there was no prior agreement with Mr. Gillam or Mr. Dubke.

The Alaska Public Offices Commission’s staff report called this “completely implausible” and concluded that Americans for Job Security had violated state law by acting as an improper conduit. It also took a shot at the group’s explanation that it protects its members’ identities so they can speak out without fear of reprisals.

The Times also gave this description of Americans for Job Security’s operation: “The group’s Republican connections begin with location: While its public address is a drop box at a United Parcel Service store in Alexandria, Va., Mr. DeMaura actually works out of space that is sublet from a Republican consulting shop, Crossroads Media, whose other clients include the national Republican Party, the Republican Governors Association and American Crossroads, a Karl Rove-backed group raising millions to support Republican candidates.”

Center to Protect Patients’ Rights (CPPR)

The best quick writeup we’ve found on CPPR is also from OpenSecrets: Mystery Health Care Group Funneled Millions to Conservative Nonprofits. That piece identifies CPPR’s head as Sean Noble of Phoenix, a former congressional staffer. Politico says Noble is a key operative for billionaires Charles and David Koch, who provide deep pockets for a wide variety of conservative causes.

Here’s what OpenSecrets says about where CPPR’s money comes from:

The donors to the Center to Protect Patient Rights are almost entirely unknown. Such tax-exempt organizations must detail the groups to whom they gave grants, but not the sources of their own funds. A small grant of $200,000 came to CPPR from American Action Network, yet another 501(c)(4), according to the Form 990 tax return that American Action filed with the Internal Revenue Service this week.

And if its donors are unknown, so is much else about CPPR. According to its own 2010 tax return, which was filed last November, it is run by Sean Noble, who is listed as its director, president and executive director. Noble describes himself on his Twitter account as a “PR/Political consultant, conservative strategist/operative, former GOP Hill chief of staff, blogger, proud father, fighting for liberty.” Noble was chief-of-staff to former Republican Rep. John Shadegg of Arizona, for whom he worked for 13 years, and since then has worked as a political consultant and in public relations.

The Los Angeles Times also reported on the Center to Protect Patients Rights last May. Here’s how that story described the CPPR’s link to the Koch brothers — and how the brothers responded to questions about it:

Exactly how the Kochs and their allies are directing their sizable resources is unknown. But an examination of the Center to Protect Patient Rights provides some important clues.

The Kochs have several ties to the center. It is run by Sean Noble, a Phoenix-based GOP consultant who is a key operative in the Kochs’ political activities, as first noted by the investigative blog Republic Report. One of the center’s original directors, Heather Higgins, is chairwoman of the Independent Women’s Forum, which has received funding from a Koch-controlled foundation. And Cheryl Hillen, a Connecticut-based consultant who raised $2.6 million for the center, was director of fundraising for the Koch-backed Citizens for a Sound Economy.

Koch spokeswoman Melissa Cohlmia directed questions to the center, declining to say whether the Kochs were involved.

“Koch respects the lawful right of this organization, and others like it, to protect their privacy,” she said in an emailed statement.

The center was largely used as a vehicle to pass millions to other organizations, which also zealously guard the anonymity of their donors. Some campaign finance experts suggested the center could have been set up to pool money from various sources.

Another CPPR Link to Yes on 32 Campaign
In September, the Sacramento Bee traced a link between the Center to Protect Patients’ Rights and the Yes on 32 campaign: A stealth attack seeks to drain labor money. Columnist Dan Morain followed the connections from a group funding a pro-32 TV ad:

An entity called California Future Fund for Free Markets is the shell that is airing the commercial supporting Proposition 32. That’s known because the entity filed papers with the California Secretary of State, with a phone number. That number is to a law firm in Virginia headed by attorney Jill Holtzman Vogel.

Vogel didn’t call back, but she knows something about deals cut in shadows. She was part of the legal team that represented the GOP during the 2000 presidential recount in Florida, and in 2004 became chief counsel to the Republican National Committee.

Vogel also is a state senator in Virginia, and takes plenty of big contributions, including $95,000 from a New York hedge fund manager, $320,000 from a Virginia software entrepreneur and $386,000 from her father, who is in the oil and gas retail business in the South.

In its filing, California Future Fund reported that it received the $4.08 million from American Future Fund. This so-called social welfare corporation is based in Des Moines, Iowa, and its president is a grandmother named Sandy Greiner.

Greiner, who didn’t call me back, happens to be one of the most conservative members of the Iowa state Senate. She also takes her share of fat donations, especially from farm lobby groups, farm corporations and ethanol interests. …

American Future Fund became a player in campaigns nationally in 2010 after receiving almost $13 million from another social welfare group called Center to Protect Patient Rights, which is based in Phoenix.


Morain contacted CPPR’s Sean Noble, who declined to talk about “current activities” and described the group’s goals thus: “Our goal is to promote freedom, and we support groups that do the same. It’s very straightforward. There is nothing to expand upon.”

The Company You Keep

Some provisions of federal law — notably, charity provisions such as 501(c)(3) and 501(c)(4) — shield large donors from disclosing they’ve given money to a cause or organization. That’s why the money trail in a case like this $11 million contribution to the California initiative campaigns leads not to individuals, but to a few organizations that are impervious to public scrutiny. But one can look to see the company these organizations keep to get an idea of what their agenda is, if not the specific donors to a cause.

Here’s a telling passage from a Los Angeles Times story this morning on the sources of the Americans for Responsible Leadership money:

There are … signs that Americans for Responsible Leadership is part of a broad constellation of secretive Republican groups. It is being represented by a prominent Virginia-based law firm, Holtzman Vogel Josefiak, that has worked for other conservative advocacy organizations that conceal their donors.

That includes the American Future Fund, which gave $4 million earlier this year to push Proposition 32. The Iowa-based group is among two dozen Republican-allied groups that received millions of dollars from the Center to Protect Patient Rights during the 2010 midterm elections.

To wrap up: Right now, we can’t get at exactly who’s giving all this money. Instead, what we have is the raw material for a schematic of how all these groups are connected to each other and to others in this “broad constellation” of secretive political donors.

  • http://www.facebook.com/tim.ellis.77964 Tim Ellis

    Write your representitives and ask for campain finance reform. Congress spends between 30 and 80% of their time fundraising. Lobists write bills for them. It’s said.