Documents Found In Meth House Bare Inner Workings Of Dark Money GroupOctober 29th, 2012 1:52 pm ProPublica
by Kim Barker, ProPublica, and Rick Young and Emma Schwartz, Frontline
This post was co-published with PBS’ Frontline.
The boxes landed in the office of Montana investigators in March 2011.
Found in a meth house in Colorado, they were somewhat of a mystery, holding files on 23 conservative candidates in state races in Montana. They were filled with candidate surveys and mailers that said they were paid for by campaigns, and fliers and bank records from outside spending groups. One folder was labeled “Montana $ Bomb.”
The documents pointed to one outside group pulling the candidates’ strings: a social welfare nonprofit called Western Tradition Partnership, or WTP.
Altogether, the records added up to possible illegal “coordination” between the nonprofit and candidates for office in 2008 and 2010, said a Montana investigator and a former Federal Election Commission chairman who reviewed the material. Outside groups are allowed to spend money on political campaigns, but not to coordinate with candidates.
“My opinion, for what it’s worth, is that WTP was running a lot of these campaigns,” said investigator Julie Steab of the Montana Commissioner of Political Practices, who initially received the boxes from Colorado.
The boxes were examined by Frontline and ProPublica as part of an investigation into the growing influence on elections of dark money groups, tax-exempt organizations that can accept unlimited contributions and do not have to identify their donors. The documents offer a rare glimpse into the world of dark money, showing how Western Tradition Partnership appealed to donors, interacted with candidates and helped shape their election efforts.
Though WTP’s spending has been at the state level, it’s best known nationally for bringing a lawsuit that successfully challenged Montana’s ban on corporate spending in elections, extending the provisions of the U.S. Supreme Court’s landmark Citizens United decision to all states.
The tax code allows nonprofits like WTP to engage in some political activity, but they are supposed to have social welfare as their primary purpose. As reported previously by ProPublica and Frontline, when WTP applied for recognition of its tax-exempt status, it told the IRS under penalty of perjury that it would not directly or indirectly attempt to influence elections — even though it already had.
The group is now locked in an ongoing dispute with Montana authorities, who ruled in October 2010 that the nonprofit should have registered as a political committee and should have to disclose its donors. WTP sued. A hearing is set for March.
In the meantime, the group has changed its name to American Tradition Partnership, reflecting its larger ambitions. This month, it sent Montana voters a mailer in the form of a newspaper called the Montana Statesman that claimed to be the state’s “largest & most trusted news source.”
The front page accused the Democratic gubernatorial candidate of being soft on sex offenders.
Donny Ferguson, American Tradition Partnership’s spokesman and executive director, did not specifically address the documents found in Colorado or allegations of coordination made against WTP.
“American Tradition Partnership always obeys every letter of every applicable law,” he wrote in an emailed response to questions. “ATP does not, and never will, endorse candidates or urge voters to vote for or against candidates. … These false allegations are old hat.”
On its website, the group says its primary purpose is issue advocacy and combating radical environmentalists, whom it sometimes calls “gang green.” It describes itself as a grassroots group backed by a broad membership of small donors.
When asked about the documents found in Colorado, Jim Brown, a lawyer for the group, said he was unfamiliar with them.
After being shown some of the documents by Frontline, Brown, in a follow-up email, said his review indicated that they appeared to belong to a company called Direct Mail. Direct Mail and Communications is a print shop in Livingston, Mont., run by a one-time key player in WTP and his wife.
Brown urged Frontline to turn over the documents. “If the documents are purported to be what you say they are, then you may knowingly be in possession of stolen property,” Brown wrote.
The records are in the hands of the Montana Commissioner of Political Practices, which considers them public and reviewable upon request.
* * *
In the anything-goes world of modern campaign finance, outside groups face one major restriction: They are not allowed to coordinate with candidates. That’s because contributions to candidates and parties are still capped to limit donors’ direct influence, while contributions to outside groups are unlimited.
The Federal Election Commission has a three-pronged test for proving coordination: Did an outside group pay for ads, phone calls or mailers? Did these materials tell people to vote for or against a candidate, or praise or criticize a candidate in the weeks before an election? Finally, did the candidate, or a representative, agree to the expenditure?
Many concerns have been raised about coordination in this election because of close ties between outside groups and campaigns. Super PACs supporting President Barack Obama and Republican nominee Mitt Romney are run by their former staffers. Super PACs and campaigns have used the same consultants, who insist in interviews that they have firewalls.