Blog — Campaign Finance Reform

July 30, 2014

Political Operative Connects Missouri Dark Money Group to PAC It Funded

By Matt Corley

A Missouri political operative is the key connection between a political action committee that tried to sway three state Senate races in 2012 and the secretive nonprofit that bankrolled the effort, an analysis by CREW of state and federal documents reveals. In addition, a federal tax document obtained by CREW discloses the nonprofit was funded by a single donor whose identity remains hidden, further suggesting that the organization was established to anonymously inject money into Missouri elections.

At the beginning of July 2012, Nicole Brown, a consultant providing “independent fundraising and campaign solutions for Missouri state races,” was listed as treasurer of Missourians Against Higher Utility Rates (MAHUR), a political action committee formed in 2009 to help an aluminum company, Noranda Aluminum, beat back legislation that could affect its energy costs. By the middle of the month, however, she had cut her public ties to MAHUR and quietly helped start a new nonprofit group, Missourians for Low Energy Costs (MLEC) – which immediately donated $275,000 to MAHUR.

The same day MAHUR got the cash infusion, less than two weeks before a primary election, it poured $250,000 into “voter education” efforts aimed at influencing the outcome of three Missouri state Senate races. Before the state’s August 7 primary, MLEC sent another $70,000 to MAHUR, ultimately directed toward “voter education” in the state Senate races. The $345,000 in total from MLEC, the only money MAHUR received in over two years, was a significant sum for Missouri primary politics, considering the average amount raised by Missouri state Senate general election candidates in 2012 was $393,000.

MAHUR’s last-minute political spending drew notice: Reporters unsuccessfully sought to uncover the ultimate source of the money. The St. Louis Post-Dispatch editorial board argued MAHUR and MLEC were engaged in a form of “money laundering” by “donors too cowardly to connect their money to their political views.” Missouri lawmakers called for legislation that would require nonprofits funding electoral activity to disclose their donors.

Ms. Brown’s role in the money-moving nonprofit, however, was never made public. CREW’s review of documents now shows she was the common link between the two groups, a connection only revealed more than a year after the election ended when MLEC had to file its 2013 annual registration report with the Missouri Secretary of State. The timeline of events suggests that Ms. Brown disassociated herself from MAHUR in order to create MLEC and to use it to anonymously channel donor money to the group:

  • July 7, 2012: MAHUR files its July Quarterly report with the Missouri Ethics Commission, listing Ms. Brown as treasurer.
  • July 9, 2012: MAHUR files an amended statement of organization with the Missouri Ethics Commission, naming a new treasurer, Aaron Hobbs.  Ms. Brown’s name no longer appears on the group’s forms.
  • July 19, 2012: MLEC files its articles of incorporation with the Missouri Secretary of State’s office, asserting that the group is organized under Section 501(c)(4) of the tax code.
  • July 23, 2012: MLEC contributes $275,000 to MAHUR.  That same day, MAHUR spends $251,000 on “voter education” efforts aimed at supporting three state Senate candidates and opposing another: Jeannette Oxford (SD 5), Scott Largent (SD 31), Ward Franz (SD 33), and Ed Emery (SD 31), respectively.
  • July 30, 2012: MAHUR files its 8 Days Before Election report, covering the time period between July 1 and July 26.  The report reveals MLEC’s contribution and the electoral spending it supported.
  • August 3, 2012: MLEC contributes $70,000 more to MAHUR.
  • August 7, 2012: The three candidates supported by MAHUR’s spending lose their primary elections.

Following the failed effort to sway the primaries, MAHUR went dormant. The committee has not reported receiving any contributions since August 2012. MLEC has not had any public profile since then either. The group distributed more money, though, according to tax forms filed with the IRS in 2014. In September 2012, MLEC gave $115,000 to the Fair Energy Rate Action Fund, a Missouri nonprofit focused on utility rates. In early 2013, MLEC gave $25,000 each to two national conservative organizations, Americans for Prosperity and the American Conservative Union. As of June 30, 2013, MLEC only had $4,500 in its bank account.

A Corporation behind the Scenes?

Though Ms. Brown’s role in MLEC and MAHUR is now clear, the ultimate source of the money funneled into Missouri’s elections remains a mystery. A copy of MLEC’s tax filings with the IRS obtained by CREW, complete with a redacted contributor list, shows that MLEC’s entire $897,000 budget was provided by a single donor. In other words, the $320,000 that MLEC provided to MAHUR to use to influence elections in Missouri came from a single donor unknown to Missouri voters.

When MAHUR first started spending money in the 2012 state Senate primary elections, observers quickly noted that the group had originally been established in 2009 to help Noranda Aluminum fight legislation that would allow Missouri’s largest power company, AmerenUE, to charge customers increased rates to fund the cost of building an additional nuclear power plant. Noranda, the state’s largest consumer of electricity, was the sole contributor to MAHUR in 2009 and 2010. The committee was set up by former Missouri House Speaker Rod Jetton, whose consulting firm employed Ms. Brown from May 2007 to December 2009.

MAHUR and Ms. Brown did more than just spend campaign money to help Noranda fight AmerenUE, though. On April 6, 2009 – less than two weeks after it established itself as a political committee and three days after Noranda gave it $78,750 – MAHUR filed a petition to intervene with the Nuclear Regulatory Commission in an effort to block AmerenUE from being granted a necessary license to build a new nuclear power reactor. Ms. Brown, along with another employee at Mr. Jetton’s consulting firm, filed declarations supporting the petition. In its answer to the petition, AmerenUE pointed out Noranda’s ties to MAHUR, particularly how MAHUR and Noranda appeared to share lawyers.

Since identifying information about MLEC’s donor does not have to be disclosed, it’s impossible to say for certain whether Noranda was involved. There is evidence suggesting, though, that Noranda was interested in the races MAHUR chose to engage in using MLEC’s money. All three of the candidates supported by MAHUR received contributions from Noranda in 2012 while the one candidate MAHUR opposed did not. The Associated Press noted in 2012 that at least two of the Senate contests in which MAHUR engaged “feature a candidate who supported the 2009 legislation or a separate 2011 measure that would have allowed power companies to recoup costs for obtaining a federal early site permit for a possible nuclear power plant.” Noranda executive did not return the AP’s call for comment in 2012.

There are additional circumstantial ties between Noranda and MLEC. MLEC’s 2012 federal tax filings were prepared by an attorney at Bryan Cave LLP, a law firm that has also represented Noranda. In addition, Noranda is a member of one of the other groups that received money from MLEC, the Fair Energy Rate Action Fund. Without greater transparency, it may never be known whether Noranda directly funded MLEC.

Ironically, Ms. Brown, the operative connecting MLEC and MAHUR, has moved on to a position in local government, where she is said to be working to make the Clay County Commission “more transparent.”

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