Millions of Dollars in Shadowy Campaign Money Fuel Presidential Campaigns

Sunday, February 07, 2016
(graphic: Steve Straehley, AllGov)

By Jack Gillum, Chad Day and Stephen Braun, Associated Press


WASHINGTON (AP) — Campaign money from shadowy sources is back this presidential election.


At least $4 million of it is flowing to outside groups helping White House hopefuls, making it difficult to trace who's behind the big bucks. Both parties benefit from money routed through obscure corporations, or from nonprofits that don't have to disclose their donors.


The contributions are a reminder of federal court decisions in recent years, like Citizens United, that loosened prior restrictions in campaign finance laws. That can hide who's really backing candidates — and what favors or influence could be owed should they get elected.


"Just wait until this year," said billionaire Frank VanderSloot of Idaho. The Associated Press determined that two of his obscure businesses gave a combined $175,000 to a "super" political committee helping Republican presidential candidate Marco Rubio. "We're going to send bucketloads. This was teaspoons."


Meanwhile, Democratic-leaning American Bridge 21st Century reported more than $1.5 million from its affiliated nonprofit, which doesn't have to name its donors. American Bridge, which said it used the money to pay for shared expenses like rent and staff, was founded by Hillary Clinton supporter David Brock.


The AP counted more than two dozen groups that each gave at least $50,000 to presidential-aligned super PACs during the last three months of 2015, piecing together property tax documents, public records and millions of digital campaign finance records. At least half of those were unrecognizable names like family trusts, real estate holdings or firms that were far from household brands.


Sheila Krumholz, the executive director of the Center for Responsive Politics, said voters need to know the sources of political money so they can evaluate how candidates will behave in office.


"These public officials may be bringing IOUs with them to Washington," Krumholz said. "Voters need to be able to consider the source and see whether there are hidden motives."


Opaque contributions aren't new: In 2011, a once-mysterious group gave $1 million to a super PAC supporting then-GOP presidential candidate Mitt Romney. The group was formed by an executive at Romney's old company, and that co-worker ultimately acknowledged he was behind the contribution.


But this time, no White House incumbent likely means more money to go around, especially during a contentious primary season. Much of the super PAC money so far has paid for pricey political ads, among other expenses.


The largest, obfuscated super PAC donation was $500,000, which came from an unknown "IGX LLC" to the Rubio-aligned Conservative Solutions. The AP discovered the contribution came from self-described investor and IGX owner Andrew Duncan of Brooklyn, New York, whose firm was listed in a prior Rubio donation.


Duncan helped host a Rubio fundraiser last October, and is on Rubio's campaign website as pledging to "buy Marco a plane ticket." At least half of his $40,000 in donations since 2012 went to Democratic candidates, including a $2,700 donation last May to Clinton's campaign.


Rubio has said it's important for people to know the source of political money. "I think that as long as people know who is giving you money, and why it is, people can make judgments on why you are doing what you are doing," he said at a September campaign stop in New Hampshire.


Duncan, who said he worked as a technology executive and has invested in several film productions, acknowledged he was the source of the super PAC donation in emails Tuesday to the AP. Duncan, who funds human-rights efforts in China, said he admired Rubio's work on the issue and had used IGX to mask the donation because he was worried about reprisals.


Even frequent contributors whose names appear elsewhere in Federal Election Commission data donated through an alphabet soup of companies.


VanderSloot, who gave under companies like "TMCV #2 LLC," also contributed $150,000 under his own name to Conservative Solutions. Those contributions have helped the group so far spend $14.8 million in ads this election, according to political ad-tracker Kantar Media.


TMCV #2 LLC owns a corporate development property in Utah, whose address is shared with the VanderSloot-owned Riverbend Ranch in Idaho Falls, Idaho. And NG Montana LLC, which also contributed $85,000 to Conservative Solutions, lists the same address in federal records.


In an interview, VanderSloot confirmed he was behind the contributions but said he was not trying to hide the source of the money. He said the super PAC called him in late December requesting more donations and "that's where we had cash at that moment."


A super PAC supporting Republican Ohio Gov. John Kasich also benefited from New York real estate developer Peter S. Kalikow, the former publisher of the New York Post. He gave $125,000 through HJK LLC, a company registered to Kalikow's firm HJ Kalikow and Co.


Spokesman Martin McLaughlin said HJK is just one way Kalikow chooses to make donations.


"It's not a mystery that Peter Kalikow supports Republican candidates," he said.


Associated Press writers Kimberlee Kruesi, Julie Bykowicz and Tom Hays contributed to this report.


To Learn More:

            This Year’s Biggest Dark Money Candidate: Marco Rubio (by Steve Straehley, AllGov)

New Non-Profit Tied to Jeb Bush Campaign Opens Floodgates to More Dark Money (by Noel Brinkerhoff and Steve Straehley, AllGov)

Will Secret Donors Dominate the Upcoming Election Season? (by Steve Straehley, AllGov)

Dark Money Political Groups Hit $100 Million Mark in Election Spending (by Steve Straehley, AllGov)


Leave a comment