Another Way To Mask Super Rich Donors
By Zachary Mider, Bloomberg News (TNS)
WASHINGTON — In January, Ted Cruz’s quest for the presidency got help from a limited liability company called V3 231. The LLC was listed as the source of a $250,000 donation to a super PAC supporting the conservative Republican senator from Texas. For anyone wondering what V3 231 is, or who controls it, there were few clues. A lawsuit filed in federal court mentions the company once owned a hotel in Brooklyn, N.Y. A search on the Internet reveals the name of the hotel’s now defunct developer. One of the developer’s former executives, reached on his mobile phone, says another man controls the LLC. That guy’s name, the former executive says, is Ben Nash.
Nash was a 17-year-old yeshiva student from Brooklyn when he discovered a knack for selling cellphones. He dropped out of school and eventually made a fortune reselling used or surplus phones. His company, PCS Wireless, is targeting $1 billion in sales this year, according to Business Insider. Now 32, Nash has grown wealthy enough to dabble in Brooklyn real estate and philanthropy. He picks up the phone right away when reached at his headquarters in suburban New Jersey. He allows that he had dinner with Cruz a few months back, but he says he doesn’t think he gave the candidate as much as $250,000. “We give to a lot of charity over here,” he says. He ends the call promising to investigate. “I do want to check, for my own personal interest.”
The next day, Nash’s spokesman, Robert Barletta, confirms that Nash was behind the $250,000 donation. In an email, Barletta calls the donation “transparent and fully within federal campaign finance laws” and motivated by Cruz’s support for Israel.
When the Supreme Court ruled in 2010 to end a ban on corporate spending to influence elections, detractors envisioned an era when huge companies like Wal-Mart Stores or ExxonMobil would dominate politics in pursuit of profits. The reality is proving far different. Most business donations are coming from little-known LLCs whose founders and officers often don’t have to be disclosed anywhere. In a few cases, it’s so difficult to identify the source that the donations might as well be anonymous.
That alarms groups worried about the influence of money in politics. “When we’re talking about these huge contributions, it’s a way to buy corrupting influence without any public accountability at all,” says Fred Wertheimer of Democracy 21, a Washington nonprofit.
Since 2012, Democracy 21 and the Campaign Legal Center have filed four complaints with the Federal Election Commission challenging big donations through LLCs. The commission is deadlocked along party lines and has yet to take any action.
Some lawyers say closing the LLC loophole would require legislation. “I would advise a donor that you have every right to do everything you want with your money,” says Dan Backer of DB Capitol Strategies in Alexandria, Va. “If that LLC chooses to make a contribution, that is the right of that LLC.”
Donors seeking anonymity can also give to nonprofit advocacy groups — known as 501(c)4s, after the section of the tax code that defines them — which don’t have to disclose the source of their funding at all. But, unlike super PACs, these groups aren’t supposed to spend all their money influencing elections.
The biggest LLC donation of the presidential race has been a $1 million check to Right to Rise, a super PAC aligned with Jeb Bush, from Jasper Reserves. A Florida billionaire named Christopher Cline identified himself to Bloomberg as the source of the money. Cline is a coal baron whose 164-foot yacht, Mine Games, has its own two-person submarine.
Then there’s MMWP12, one of the biggest donors to an independent advocacy group supporting John Kasich’s presidential run. In early August, the Center for Public Integrity traced the LLC’s $500,000 donation to Mark Kvamme, a venture capitalist and off-road-truck enthusiast who used to work in the Ohio governor’s administration. Reached by phone, Kvamme is happy to share his opinion of Kasich. “I worked for the guy,” he says. “I saw him do what he did in Ohio. The guy is spectacular.” But Kvamme won’t talk about any connection to MMWP12. “Let them report whatever they want to report,” he says. “I’m not confirming or denying. It is what it is.”
Photo: Light Brigading via Flickr