By Walker Davis
September 1, 2017

In 2015, a dark money nonprofit gave $50,200 to a local political committee making independent expenditures in Tucson, Arizona’s city council election. Yet the nonprofit’s tax return for that year claims it engaged in no political spending at all. It’s hard to believe it was a clerical error: both the political committee, Revitalize Tucson, and the dark money group funding it, Foundation for Responsible Accountable Government (FRAG), were led by the same person, Christine Bauserman. Bauserman has since joined the Trump administration, serving in the Department of the Interior as a special assistant to the secretary.

FRAG also appears to have flouted IRS rules that limit nonprofits like FRAG – purportedly a section 501(c)(6) business league – to spending no more than 50 percent of their budgets on political activities. FRAG’s contributions to Revitalize Tucson accounted for about 65 percent of its total spending in 2015, far more than the rules allow. And while FRAG claimed that the money it gave to Revitalize Tucson was a nonpolitical grant, Revitalize Tucson was explicitly a  “political committee,” organized “for the purpose of making independent expenditures.”

Leading up to the November 3, 2015 election, Revitalize Tucson spent $51,146 on independent expenditures attacking three Democratic city council members, and supporting their Republican challengers, according to the committee’s final campaign finance report. Most of this money was spent on roadside billboards that said things like, “Who let a few radicals hold downtown hostage? Ask Shirley Scott, Paul Cunningham & Regina Romero,” three city council members seeking reelection. Revitalize Tucson also paid for robocalls attacking the same three city council members–including calling Cunningham a “sexual predator”–and praising their challengers in the race.

These ads were almost fully-funded by FRAG. Between July 16 and August 28, 2015, FRAG contributed $50,200 to Revitalize Tucson. FRAG’s contributions account for more than 90 percent of the total funding Revitalize Tucson received leading up the election. In fact, Revitalize Tucson was created just three days before FRAG made its first contribution.

Revitalize Tucson reported this spending to the Office of the City Clerk of Tucson as independent expenditures supporting or opposing candidates. For example, one of the disclosure reports, shown here, asserted that the billboards were independent expenditures opposing candidates in the 2015 city council race:

FRAG’s tax return, however, claims the nonprofit did not engage in any political activity at all during 2015. The form shows the group received $95,000 in anonymous contributions during 2015, and spent $77,499 total. FRAG disclosed giving $50,200 to Revitalize Tucson, but classified the contributions as a “grant” for “community outreach.” Here’s how the money transfer appears on FRAG’s tax return:

Contrary to what FRAG disclosed on its tax return, the group’s contributions to Revitalize Tucson appear to have been political expenditures. Revitalize Tucson was registered as a political committee and spent money supporting and opposing candidates, according to its own filings. Additionally, the two groups were run by the same people: Bauserman served as president of FRAG and co-chair or Revitalize Tucson, and in fact testified that she had transferred funds from FRAG to Revitalize Tucson herself. Former Arizona state Senator Frank Antenori served on the board of FRAG and as co-chair of Revitalize Tucson, and Sean Bailey was the treasurer of both groups. As a result, it is clear FRAG knew what Revitalize Tucson did with the money.

Revitalize Tucson’s bare-knuckle tactics and anonymous source of funding raised eyebrows locally. In September 2015, Democratic activist Barbara Tellman filed an unsuccessful lawsuit against FRAG because it was not registered with the Arizona Corporation Commission. During a hearing related to the lawsuit, Bauserman claimed Revitalize Tucson was not a political committee–despite the fact that she signed a form registering the group as such–and that FRAG’s contributions to Revitalize Tucson were therefore not political contributions. Bauserman asserted the contributions were “grants” for “policy advocacy,” previewing what FRAG would later claim about this spending on its tax return.

The next month, FRAG filed a counter-suit, reportedly claiming Tellman’s lawsuit was “protesting the First Amendment right of nonprofit corporations to make independent political expenditures.” This stance would seem to contradict both Bauserman’s characterization of FRAG’s contributions as non-political during her testimony, as well as FRAG’s representation of the spending to the IRS on its tax form.

After her involvement in the 2015 city council election, Bauserman became a field director for Donald Trump’s presidential campaign. Bauserman was then hired by the Trump administration in January 2017 to serve on a “beachhead” team within the Interior Department as special assistant to the secretary. She appears on Secretary Zinke’s calendar for events as recent as June 29, suggesting she may still be serving at the agency.

Dark money is a worsening problem at the local level, where elections are cheaper and there is often less transparency. As the example of Revitalize Tucson and FRAG shows, the lower profile of local groups does not mean their potential violations of reporting requiring and political spending limits should be ignored.

In 2015, a dark money nonprofit gave $50,200 to a local political committee making independent expenditures in Tucson, Arizona’s city council election.