Today, CREW filed complaints, on behalf of itself and its clients, with the Federal Election Commission (FEC) against three nonprofits and a super PAC over their efforts to funnel money from anonymous sources into the 2018 elections. Two of the nonprofits, Citizens for a Working America Inc and Jobs and Progress Fund Inc., failed to register with the FEC as political committees despite dedicating a majority of their spending to influencing elections, while the third nonprofit, the Government Integrity Fund, appears to have acted as a conduit for contributions to the super PAC, American Jobs and Growth PAC.
Together, the three nonprofits are responsible for more than $6.4 million in contributions to federal super PACs during the 2018 election. Since the nonprofits can spend money on elections without disclosing their donors, the true source of the funds remains secret.
But that is just the tip of the iceberg. All three of the nonprofits are part of a dark money network that, according to an analysis by CREW, has injected at least $36.6 million into American elections since 2011 in the form of independent expenditures and super PAC contributions. The true amount of political spending by the network is almost certainly higher, as that sum only includes contributions and expenditures reported to the FEC and does not include spending on sham “issue” ads that target candidates or contributions reported only on the state or local level.
Who is Part of the Network?
The nonprofits in the network, which are all organized under section 501(c)(4) of the tax code, are tied together by financial transactions and overlapping personnel. For example, according to their tax returns, two of the nonprofits targeted in CREW’s new complaints, Citizens for a Working America Inc. and the Government Integrity Fund, are led by the same person, Joel Riter, a political consultant with roots in Ohio politics. In addition, a trustee of the Government Integrity Fund, Vaughn Church, is also the sole director of Jobs and Progress Fund Inc. Tom Norris, the treasurer of American Jobs and Growth PAC, a super PAC that all three nonprofits contributed to in 2018, is the former president of both the Government Integrity Fund and Jobs and Progress Fund Inc..
One thread that appears to connect the nonprofits in the network is their tax preparer, Total Business Solutions of Grove City, Ohio. Total Business Solutions is listed as the preparer firm on the most recently-available tax returns for the eleven nonprofits whose super PAC contributions and independent expenditures CREW included in its tally of at least $36.6 million in political spending since 2011: A Public Voice Inc., American Exceptionalism Institute Inc., American Policy Coalition, Citizens for a Working America Inc., Freedom Frontier, Freedom Vote, Inc., the Government Integrity Fund, Independence and Freedom Network, Jobs and Progress Fund Inc., Prosperity Alliance Inc., and the Revitalization Project.
Most of the nonprofits have transferred money to other nonprofits in the network. For instance, in their most recent tax year, A Public Voice Inc. reported giving $50,000 to American Policy Coalition and $20,000 to the Government Integrity Fund, while American Policy Coalition gave $350,000 to Citizens for a Working America Inc., which in turn gave $34,688 to the Government Integrity Fund. The Government Integrity Fund, for its part, gave $225,000 to Citizens for a Working America Inc. and $625,000 to Prosperity Alliance Inc.
A Focus on Ohio
During the 2018 election, this network of social welfare nonprofits, which keep their donors secret by claiming they are not political committees, collectively channeled nearly $12 million into super PACs, financing expenditures in races across the country, including a Cincinnati City Council race, Georgia’s Lt. Governor’s race, and South Carolina’s gubernatorial election.
Though the nonprofits have pumped anonymous money into elections across the country, the Buckeye State, where several of the nonprofits are based, has been a particular focus over the years. By CREW’s estimate, based on an analysis of nonprofit contributions and their proximity to super PAC expenditures, eight of the network nonprofits combined to direct at least $5 million towards Ohio elections in the 2018 cycle on the state, local, and federal level.
For example, A Public Voice Inc. contributed $165,000 to American Jobs and Growth PAC in 2018. In close proximity to A Public Voice’s contributions, the super PAC spent $175,000 on direct mail in non-federal elections, which press reports indicate targeted Democratic candidates in several Ohio state House races. A Public Voice Inc. also contributed significant funds to two super PACs backing then-Rep. Jim Renacci (R-OH) in his effort to unseat Sen. Sherrod Brown (D-OH) as well as $85,000 to the Fund for a Working Congress two days before that group, a super PAC, spent $79,328 on digital ads opposing Kenneth Harbaugh in Ohio’s 7th congressional district.
Similarly, American Policy Coalition contributed to the Fund for a Working Congress in close proximity to the super PAC’s spending in an Ohio congressional race. American Policy Coalition also gave $130,000 to a super PAC called Americans United for Values (whose treasurer is also the president of A Public Voice Inc.) on days that coincided with the super PAC’s payments for digital ads in non-federal elections. Facebook’s ad archive shows that Americans United for Values ran ads during that time attacking the Democratic candidates in Ohio’s secretary of state and state auditor races.
Like A Public Voice Inc., the Government Integrity Fund also contributed hundreds of thousands to a super PAC supporting then-Rep. Renacci in the Ohio Senate race. Curiously, the Government Integrity Fund reported to the IRS that it also gave $20,000 to a second Renacci-backing super PAC, but the super PAC, MeToo Ohio, didn’t report receiving anything from the Government Integrity Fund. The super PAC did, however, report a $20,000 contribution from A Public Voice Inc., which also made a $200,000 contribution and a $95,000 contribution to MeToo Ohio. For its part, A Public Voice reported to the IRS that it gave $295,000 to MeToo Ohio, which is $20,000 short of what the super PAC reported to the FEC. Demonstrating their close connection, the two nonprofits appear to have confused themselves for each other when they filed their taxes.
Two nonprofits in the dark money network also contributed to super PACs that spent in Ohio’s gubernatorial race. Freedom Frontier, which previously worked with Mr. Norris to back now-former Missouri Gov. Eric Greitens in the 2016 Missouri gubernatorial primary, contributed more than $1 million to Ohio Conservatives for a Change, a federal super PAC that supported then-Ohio Secretary of State Jon Husted in the 2018 GOP gubernatorial primary and later backed the DeWine-Husted ticket. But another group tied to the network, Independence and Freedom Network, contributed $850,000 to Onward Ohio, a federal super PAC supporting then-Lt. Gov. Mary Taylor in the same primary election.
Down ballot, Citizens for a Working America Inc. contributed $535,000 to Hardworking Americans Committee, a federal super PAC, in April 2018. Soon after, the super PAC spent $521,492 on advertising, palm cards and surveys supporting now-former Ohio House Speaker Larry Householder and opposing his competition. Around the same time, Prosperity Alliance Inc. was funding a federal super PAC called Conservative Alliance PAC, which was described in the press as an “anti-Householder group.” A subsidiary of Independence and Freedom Network called LZP, LLC also completely funded a super PAC that ran ads attacking Householder, giving the PAC $270,000.
The Network Looks to the Future
The relationship between Independence and Freedom Network and LZP, LLC demonstrates how the network is evolving. In 2018, several of the network nonprofits formed subsidiary LLCs known as “disregarded entities” that were used for super PAC contributions, “issue” communications targeting candidates, or other activities, all while further obfuscating the sources of the network’s political spending. For example, Independence and Freedom Network gave $1.1 million to Security is Strength LLC, which is actually a disregarded entity controlled by the Government Integrity Fund that has promoted Sen. Lindsey Graham (R-SC).
A Public Voice Inc. reported three separate disregarded entities in 2018: A Healthy Future, Energy Network LLC, and Next Policies LLC. All three have been active since then. Energy Network LLC hosted a website opposing HB 6, the 2019 Ohio energy legislation at the center of the bribery scandal that led to the arrest of now-former Ohio House Speaker Householder in July, while Next Policies LLC paid for mailers in South Carolina last year in a local sheriff’s race. A Healthy Future spent more than $400,000 on digital ads criticizing President Trump in the run up to Election Day over an executive order he signed related to prescription drugs.
The network has been active in the 2020 election cycle with 16 political committees reporting receipts to the FEC of more than $5.8 million from nine of the network’s nonprofits. The public can expect that these nonprofits and their subsidiaries pumped even more money into the political arena during the final days of the election that has not been reported to the FEC yet. Unfortunately, unless the FEC and other campaign finance regulators start cracking down on their efforts to evade disclosure, the public cannot expect to ever learn the true source of the money.