December 2, 2014
Like something out of a horror movie, two of the most notorious dark money networks in America have joined forces. Recently released tax filings for 2013 confirm that corporate front man Richard Berman now has a working relationship with the Koch Brothers’ political network. Both Berman and the Koch network are well-known for using nonprofit organizations to keep the money behind their political efforts shrouded in secrecy.
In 2013, Americans for Prosperity (AFP), known as “the Koch brothers’ flagship political enterprise,” gave $200,000 to the Enterprise Freedom Action Committee (EFAC), one of Berman’s front groups. AFP is the second group with deep Koch ties that has given money to Berman and the first to directly support one of Berman’s nonprofits. Between September 2011 and September 2013, the Institute for Humane Studies, an organization built by Charles Koch, paid Berman’s public relations firm, Berman and Company, nearly $600,000 for “marketing and online advertising.”
The exact purpose of AFP’s contribution to EFAC is unclear, since AFP’s tax filings only reveal that the grant was for “program support.” Odds are, though, that the money supported Berman’s 2013 battle against a minimum wage ballot initiative in New Jersey. According to EFAC’s 2013 tax returns, the group reported that it “received funding for a campaign to engage in opposition to the New Jersey minimum wage ballot initiative/constitutional amendment.” EFAC spent $1.095 million to oppose the ballot initiative, nearly the same amount that the organization raised in 2013.
Most of the money spent by EFAC in the minimum wage fight went out the door to a New Jersey-based organization, the Coalition to Preserve Jobs and Our Constitution (CPJOC). The $990,000 EFAC gave to CPJOC accounted for 95 percent of the New Jersey group’s funds for the campaign to oppose raising New Jersey’s minimum wage, which was ultimately a losing battle. CPJOC, in turn, paid Berman and Company $645,500 for media-related expenses. That’s on top of the $301,689 EFAC itself paid to Berman and Company in 2013 for management services.
If the $200,000 grant from AFP was meant to support EFAC’s New Jersey minimum wage work, it wasn’t the only way the Koch group and Berman worked together in the state. AFP’s New Jersey chapter vocally opposed the increase, declaring that “New Jerseyans will now have to suffer the consequences of their choice for the foreseeable future” after the initiative passed. Months later, AFP joined together with Berman’s Employment Policies Institute (EmPI) to launch a campaign taunting New Jersey AFL-CIO President Charles Wowkanech over the minimum wage hike. EmPI even sent a mobile billboard to an AFP rally calling Mr. Wowkanech a chicken for not debating EmPI on the issue.
Clue to a Mystery?
EFAC’s 2013 minimum wage campaign, which has received little public notice, may also shed light on one of the mysteries raised in Berman’s June 2014 speech to energy executives, which was subsequently leaked to the New York Times. During a question and answer session after his presentation, Berman was asked about budgeting for his campaign against environmentalists. He responded with an anecdote about what he was able to do with $2 million after his company was “retained to do a campaign in New Jersey.” He declined to say what issue the campaign was about:
Berman: OK. So, that’s like a question of how high is up? Because you can spend a lot of money. Let me give you an example. We were retained to do a campaign in New Jersey. We had two months for the campaign. We were given 2 million dollars. The issue is not important. We started out with 76 percent disapproval. In two months, we got down to 60 percent disapproval. So we moved the needle 16 points with 2 million dollars in two months. We were really proud of ourselves, expect for the fact that we lost because we started out so bad. 76 percent is a long way down to get the majority on your side. (Inaudible). So that’s what 2 million bought in two months.
Could Berman have been referring to the 2013 minimum wage effort? It’s not certain, but the evidence points in that direction.
For instance, Berman says his side “started out with 76 percent disapproval.” Multiple polls, including one released in September 2013, found that 76 percent of voters supported raising the minimum wage. The initiative passed with nearly 61 percent of New Jersey voters supporting it, which is quite close to the “60 percent disapproval” Berman says his efforts were able to garner.
What about the fact that Berman said he was given $2 million and EFAC only reported spending a little more than $1 million on the effort? EFAC wasn’t the only Berman group spending money in New Jersey. EmPI, Berman’s main vehicle for opposing minimum wage increases, also ran ads in New Jersey. According to EmPI’s 2013 tax filings, the organization spent more than $460,000 promoting its “research on the economic impact of minimum wage hikes in New Jersey,” a campaign the group launched “with grant funding.” This means that Berman’s two groups combined acknowledge spending at least $1.55 million in New Jersey, which is much closer to Berman’s $2 million claim.
This doesn’t include any money that may have been given to Berman’s for-profit firm. In the past, clients have paid Berman and Company directly for work that went out under the banner of one of his nonprofits. As always with Berman, one of the key questions is who is funding his work, which he runs “through nonprofit organizations that are insulated from having to disclose donors.” If AFP’s $200,000 is any indication, perhaps the Koch donor network is the answer, at least when it comes to trying to stop a minimum wage increase in New Jersey.