The American Exceptionalism Institute, Inc., a dark money nonprofit that contributed $200,000 to a pro-Kelly Loeffler super PAC in 2020, raised $13 million from just two donors during its 2019 tax year, according to a new tax return obtained by CREW. The two donors, who remain secret, gave the group $10 million and $3 million, respectively.

The American Exceptionalism Institute distributed $11 million in grants to four other nonprofits between May 2019 and April 2020. Three of the grants, totaling $8 million, went to nonprofits that announced major initiatives in the first few months of 2020 that benefited then-Sen. Loeffler (R-GA) just as she faced an electoral challenge from the right. 

As a tax-exempt organization under section 501(c)(4) of the tax code, the American Exceptionalism Institute is not required to disclose its contributors, which is why groups like it are often described as “dark money” groups when they engage in political activity. The group’s only publicly known donor is the mining company Nevada Gold Mines, which, according to a voluntary disclosure by one of the company’s co-owners, gave $750,000 to the nonprofit in 2020. Nevada Gold Mines’ donation does not appear on American Exceptionalism Institute’s new tax return, meaning the donation occurred some time after April 2020.

“Restricted” grants

“There’s the swamp, home of the gators,” the ad’s narrator declared. “Then there’s the D.C. swamp, home of Congressman Doug Collins.” In late January 2020, after then-Rep. Collins (R-GA) formally announced his challenge to recently appointed Sen. Loeffler, the Club for Growth greeted him into the race with a $3 million ad campaign that the group’s president said would “educate Georgia voters about Doug Collins’ record on economic issues.” 

When the Club for Growth debuted its second ad aimed at Collins, the Atlanta Journal-Constitution noted that it was “among several outside groups” that were “forcefully supporting Loeffler,” citing an article that highlighted a mailer from the anti-choice Georgia Life Alliance Committee that praised Loeffler and her then-fellow Sen. David Perdue (R-GA). The Georgia Life Alliance Committee mailing was part of a newly announced $3 million campaign in the state that kicked off with a radio ad touting Loeffler and Perdue. 

The groups appear to be connected by more than just their interest in the 2020 contenders for Georgia’s U.S. Senate seats. Both the Club for Growth and Georgia Life Alliance Committee were recipients of “restricted” grants of $3 million — the exact amount they each announced they planned to spend on their Loeffler-benefitting campaigns — from the American Exceptionalism Institute.

The American Exceptionalism Institute gave out one other “restricted” grant during its 2019 tax year, giving $2 million to One Nation, a nonprofit closely aligned with Senate Republican Leader Mitch McConnell (R-KY).

Similarly to the Club for Growth, One Nation also targeted Collins with aggressive attack ads in early 2020. At the end of February 2020, One Nation announced “a new advocacy effort in Georgia to protect local communities from criminals who pose a dangerous threat” and targeted Collins with $1.2 million in television, cable, radio and digital ads. One of the group’s television ads accused Collins of proposing legislation that “would have allowed early release for certain sex traffickers, even some people caught with child pornography.”

Unlike the Club for Growth and Georgia Life Alliance Committee, it appears that One Nation’s Georgia-focused expenditures don’t match up neatly with the American Exceptionalism Institute’s funding. There are potential indications, however, that the $2 million provided to One Nation may have still ended up directed towards the state. CNN reported in late March 2020 that One Nation and its affiliated super PAC, the Senate Leadership Fund, “spent nearly $2 million on television, radio and digital ads from late February until mid-March” as part of “a three-pronged attack” on Collins. 

Just as One Nation was launching its anti-Collins campaign, the Senate Leadership Fund paid roughly $775,000 for independent expenditures that also targeted Collins. An ad posted on the super PAC’s website hit the same themes as the One Nation ad while calling on viewers to “reject Doug Collins.” 

One Nation, which is not required to disclose its donors, is a major contributor to the Senate Leadership Fund, giving more than $125 million between 2016 and 2020. While there is no money transfer from One Nation to the Senate Leadership Fund reported in FEC records that closely matches how much the super PAC spent against Collins, One Nation did make a $7.6 million contribution to the Senate Leadership Fund during the time period covered by the American Exceptionalism Institute’s 2019 tax return

The American Exceptionalism Institute also provided a $3 million grant to 45Committee, Inc., a politically active nonprofit that spent more than $21 million backing Donald Trump during the 2016 election, but there are no public indications that the group weighed in on the Georgia Senate race. Notably, the American Exceptionalism Institute reported its contribution to 45Committee as “general support” rather than being “restricted.” 

Nothing reported as political

Despite the millions spent on advertisements targeting political candidates in Georgia timed to Collins’ entrance into the Senate race, all of the groups involved treated the funds as though they had nothing to do with influencing elections. None of them, for instance, reported the ad spending to the Federal Election Commission as independent expenditures, which are communications that expressly advocate for the election or defeat of a candidate that are not made in coordination with a candidate or political party. 

The Club for Growth, Georgia Life Alliance Committee and One Nation are all able to claim they are not required to disclose their ads to the FEC because they were framed as exhortations related to policy issues rather than explicit calls to oppose Collins or support Loeffler. The Club for Growth’s initial ad bashing Collins, for instance, closed by encouraging viewers to “tell Collins, drain the swamp. Stop the spending” while One Nation’s ad told audiences to tell Collins “he needs to stop supporting early release of dangerous criminals.” Even though the Georgia Life Alliance Committee promoted its ad campaign as being about the 2020 elections, the group’s radio ad only asked listeners to “thank” Loeffler and Perdue and to tell them to “keep fighting to deliver pro-life reforms.” 

Political activity by nonprofits must also be reported to the IRS on annual tax returns, and as CREW has previously noted, the IRS uses different criteria than the FEC to assess whether communications qualify as political activity that can capture expenditures that nonprofit groups may not be required to report to campaign finance authorities. Of the groups that received funding from the American Exceptionalism Institute and paid for ads targeting candidates in the Georgia Senate race in early 2020, only the Club for Growth filed a tax return covering that time period that is currently publicly available. The group only reported spending roughly $390,000 on political activity, which it said was for “a program to research and identify future potential candidates.” The more than $3 million the group spent on advertising, which presumably includes the anti-Collins ads, does not appear to have been classified as political.

For its part, the American Exceptionalism Institute told the IRS it did not engage in any direct or indirect political campaign activities during its 2019 tax year. It is not unheard of for nonprofits to report grants they give to other nonprofits engaged in candidate-focused advertising campaigns as political activity on their tax returns. It is not surprising, however, that American Exceptionalism Institute did not do this, considering the groups it funded are treating their ad campaigns as expenditures that do not trigger the technical reporting requirements.

Debates over political disclosure requirements should not distract us from what is actually revealed in the American Exceptionalism Institute’s 2019 tax return: A handful of donors, under the cloak of anonymity, provided multiple millions to a little known group, most of which was then funnelled into other groups who spent significant sums on ad campaigns either boosting the image of one candidate in Georgia’s Senate race or aggressively trashing the image of another. Through several layers of obfuscation, the public has been kept completely in the dark about who was trying to influence their political decisions while benefiting the political fortunes of a then-sitting senator.

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