Screengrab via American Family Voices / YouTube

Liberal 'dark money' group rails against 'dark money'

Nonprofit organization backed by retail lobby, unions among others

Senate Minority Leader Harry Reid lambasted secret political cash when he appeared last week in a video filmed and produced by a liberal advocacy group.

“Working families can’t compete with billionaires,” Reid, a Nevada Democrat, said in the ad that also featured another liberal luminary in Sen. Elizabeth Warren, D-Mass. “Let’s stop the flood of dark money into our political system and do it now.”

One catch: The group behind the video, a nonprofit called American Family Voices, doesn’t generally reveal who funds its operations — although a Center for Public Integrity review of Internal Revenue Service and Department of Labor records indicates large unions, environmental interests and a major corporate retail lobbying group have this decade provided it with six- or seven-figure contributions.

American Family Voices has in part used this money to sponsor ads and videos trolling conservatives and tackling prickly political issues from immigration reform to credit card fees. American Family Voices also spent $10,000 last year on campaign ads attacking now-Sen. Joni Ernst, R-Iowa, without disclosing its funders as is required of candidate committees, even super PACs. To anyone watching these messages, it isn’t readily evident who their bankrollers are.

The situation is emblematic of liberals increasingly complicated, if not tortured relationship with “dark money” — shorthand for the potentially limitless cash used by certain nonprofits, which aren’t require to disclose their donors, to either promote or pummel political candidates.

It also may refer to secret funds used to push broader political influence campaigns.

While conservative nonprofits continue to dominate liberals the dark money game — most notable is the network tied to billionaire industrialists Charles and David Koch — a smattering of left-leaning organizations have also traded in the same kind of tough-to-trace political cash, particularly the kind uncorked by the Supreme Court’s Citizens United v. Federal Election Commission decision nearly six years ago.

Take Patriot Majority USA, run by longtime Reid ally Craig Varoga.

The liberal dark money juggernaut spent, according to the Center for Responsive Politics, more than $10.1 million last election on ads bashing Republican candidates for the U.S. House and Senate. During the 2012 election, Patriot Majority USA spent nearly $3.5 million against Republican Sen. Dean Heller — Reid’s Senate counterpart from Nevada’s congressional delegation who Reid actively campaigned against.

Many Democrats argue that they have no choice but to fight fire with fire, using the same political weapons federal law has allowed Republicans to arm themselves with. Prominent Republicans scoff at the notion.

“Harry Reid’s hypocrisy knows no bounds,” Kevin McLaughlin, deputy executive director for the National Republican Senatorial Committee, told the Center for Public Integrity after viewing American Family Voices’ latest video. “The best way to ‘stop the flood of dark money into our political system’ would be to stop raising dark money.”

Asked about American Family Voices’ own financial transparency, and Democrats’ dark money dealings in general, spokeswoman Kristen Orthman offered a one-line statement: “We believe in reforming the rules for everyone.”

Mike Lux, a former aide to President Bill Clinton who’s led American Family Voices since early last decade, notes that most of his organization’s messages aren’t intended to sway the outcome of a political election — as those released by many conservative nonprofits are. Rather, American Family Voices’ ads target federal policy debates.

Lux doesn’t believe his organization, which he described as a “home for special projects and coalition work for progressive causes,” is hypocritical on dark money, either.

“You can strongly support changing the law as we do but still operate in the environment that everyone is in — and that the law has made exist,” he said. “I confess to this dynamic. But I’m still going to play by the rules in front of me.”

American Family Voices’ anti-secret money video from last week specifically renews many liberals’ standing request of President Barack Obama to sign an executive order forcing government contractors to disclose their political spending.

Sen. Sherrod Brown, D-Ohio, used his featured moment to criticize the lack of transparency surrounding “so-called ‘issue ads’” — the kind American Family Voices has previously produced.

One of American Family Voices’ more prominent issue ad campaigns came in 2011, when it produced a series of ads urging viewers to call any of dozens of different congressional members and ask them to support bank interchange swipe fee reform.

The ads flashed a disclaimer at their ends: “Paid for by American Family Voices.”

That’s technically true. What the ads don’t reveal, however, is that the Retail Industry Leaders Association, an Arlington, Va.-based trade lobby that represents some of the nation’s largest retail corporations, funded the funder. Tax filings indicate the trade group gave American Family Voices a $1.33 million grant in 2011 — about 75 percent of American Family Voices’ income for the year.

Retail Industry Leaders Association was a leading advocate for swipe fee reform — hardly an issue imbued in most Americans’ minds. But it’s one that stood to save retailers billions of dollars by corralling fees they pay to banks when customers use credit and debit cards.

Lux said “very unusual circumstances” — specifically, shared policy interests among some consumer groups, corporate titans and liberal activists — led to American Family Voices’ relationship with the retail organization, which counts executives of Dollar General Corp., Target Corp., Coca-Cola Refreshments, Petco Holdings Inc., Best Buy Co. and JCPenney among its board members.

It wasn’t, however, a one-off circumstance: The Retail Industry Leaders Association’s latest tax return, filed this week with the IRS, showed it gave American Family Voices $140,000.The retail group also gave money in 2014 to politically active conservative nonprofits, such as the Charles and David Koch-supported 60 Plus Association, a conservative senior citizens advocacy organization that Democrats routinely vilify.

Like in 2011, the retailers supported American Family Voices in 2014 “because we had a common perspective on issues related to consumers, businesses and communities,” said Brian Dodge, the Retail Industry Leaders Association’s executive vice president for communications and strategic initiatives.

U.S. Department of Labor records also show that the AFL-CIO, one of the nation’s most prominent labor unions, gave American Family Voices $130,000 in late 2013. In the filing, the union described the contribution as “support for strengthening America’s middle class.”

Lux explained that the funding went toward producing “test videos” about immigration reform. American Family Voices did produce two immigration-related ads in late 2013 targeting then House Speaker John Boehner, R-Ohio, and House Majority Leader Kevin McCarthy, R-Calif.

“They wanted to test a message, and they wanted a neutral name of an organization instead of the AFL’s name,” Lux said.

American Family Voices did, last decade, voluntarily reveal that it received significant money from labor sources.

Other recent American Family Voices donors include The Partnership Project, a coalition of 20 environmental groups operating as a nonprofit charitable organization. It gave American Family Voices $328,660 sometime between mid-2010 and mid-2011, a federal tax filing shows.

The Essex County Community Foundation, which exists to “improve the effectiveness and capacity of nonprofit organizations” in its namesake Massachusetts county, gave American Family Voices $25,000 sometime between mid-2013 and mid-2014, according to the foundation’s latest federal tax filing.

Lauren Windsor, American Family Voices’ executive director, said the group’s 2014 tax return is not yet complete. Details about the group’s latest income, expenditure and cash-on-hand totals, therefore, remain unknown.

But American Family Voices did receive a prominent fundraising boost last year from Warren, one of the nation’s most prominent Democrats and herself an outspoken critic of both big and secret money in politics.

“American Family Voices — God bless you,” Sen. Elizabeth Warren, D-Mass., said last year at a January 2014 fundraiser in New York City for the group. “You’ve been out there fighting, you’ve been out there shoulder to shoulder. When I try to get something done, I always knew I could turn to you and you’d help make it happen.”

Warren’s U.S. Senate office did not return several phone messages and emails.

“Dark money certainly exists on the Democratic side. There is dissonance” in some Democrats’ messages about it, said Richard Skinner, a policy analyst at the nonpartisan Sunlight Foundation, which advocates for transparency in politics.

Asked if American Family Voices would reveal more about its donors going forward, Lux said that’s possible.

“I would definitely consider it, I’d definitely be open to it,” Lux said. “It’s something we’d look at on a case-by-case basis. It just depends on the context. As it is, we’re more open than most [nonprofit] groups.”

Michael Beckel contributed to this report.

This story is from the Center for Public Integrity, a nonprofit, nonpartisan investigative media organization in Washington, D.C. Read more of its investigations on the influence of money in politics or follow it on Twitter.

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