After their crushing defeat in 2012, Charles and David Koch are more determined, not less. They're kicking off the re-launch of Koch Politics, Inc with a big donor meeting this Sunday and Monday, and a brand-spanking new arm of the Kochtopus.

The new organization, called the Association for American Innovation, is expected to ultimately funnel millions of dollars to other dark money groups nationwide. It's being staffed with Koch stalwarts, including Marc Short, who currently oversees other Koch-funded projects, according to a few GOP operatives familiar with the overhaul.

In a twist, the association has been established under Internal Revenue Service rules as a 501(c)(6) business league, setting it apart from many of the dark money groups into which the Kochs and allied donors have in recent years poured hundreds of millions. Adding a business league, which will have members, to the Koch-backed conservative orbit could boost corporate funding, while still allowing some political spending and letting donors remain anonymous, tax lawyers say.

By contrast, Americans for Prosperity, which was founded by the Koch brothers and spent close to $140 million last year on electoral and advocacy drives with little to show for it, has two arms: It is a 501(c)(4) social welfare group -- which can engage in some political activity and keep its donors secret -- and a 501(c)(3) charity.

Yes, they're going full-tilt US Chamber of Commerce. Not content to funnel money to just about anyone who breathes and can pronounce the world "liberty," they're now going to adopt the Chamber model where everyone pays megamillions in "dues."

You've gotta love this:

"501(c)(4) groups are getting a lot of heat these days, but (c)(6)s are like mom-and-apple-pie organizations," said Ken Gross, a political law expert at the law firm Skadden, Arps, Slate, Meagher & Flom. The U.S. Chamber of Commerce and many other business groups in Washington have 501(c)(6) status.

As if somehow the US Chamber of Commerce is a paragon of a "mom-and-pop" shop?

One might expect the rollout of this new organization to dovetail with their donor meeting this weekend, where they will be discussing "short term policy threats in 2013 while building toward free-market gains in 2014 and beyond," effective engagement of "growing demographic groups such as Hispanic and Latino voters," as well as brainstorming ways "to encourage principled and effective advocates of free enterprise to run for office." They also will discuss ways to engage women. Here's a hint, boys: Stop discussing rape, birth control, and abortion. Just sayin'.

And a bonus! "Governors, Senators, members of the US House leadership, top political analysts and commentators!" I wonder if Glenn Beck has a spot this year. I'll have to see who is missing from the Fox lineup on Monday. Will derpy Ben Shapiro from Breitbart be there?

All that money, so little time to buy the government. I hear through the grapevine that there will be more efforts to stir up town hall meetings again this summer, and more mischief coming from organizations fueled by Koch money even though we can't prove it right now.

Let the games begin!

Wellspring, defined: An original and bountiful source of something

Something, indeed. After looking into all of the different right wing 501(c)(4) organizations and their associations, it's easy to see the metaphor of a tree with many branches. If the trunk represents the right wing as a whole, then each major limb of the tree represents a different set of affiliations under the overall right wing umbrella.

The Wellspring Committee, Inc. is a large limb on that tree, created to support the anti-gay, anti-woman, religious right Reaganites alongside pet agendas of other contributing billionaires. Despite the lofty language Wellspring used to describe its activities, the dictionary definition of their purpose is more apt: An original and bountiful source of money.

Who is Wellspring Committee?

Wellspring Committee (WCI) sprang to life in the waning days of the George W. Bush era in February, 2008. It is perhaps not a coincidence that its birth also coincided with the efforts of the National Organization for Marriage (NOM) and other groups to push California's Proposition 8 onto the November ballot, too. In fact, the president of WCI, Ann Corkery, is the spouse of Neil Corkery, who was the President of NOM in 2008 and now serves as Treasurer. Neil Corkery now serves as CFO of a group called the Wedgwood Circle, founded by Comcast mogul Phil Anschutz, Rick Perry bundler George Seay III, and many more. (See bios here).

Neil Corkery says in his bio that he "runs a financial consulting firm specializing in assisting non-profit organizations." Well, there's a convenient place to find oneself: at the crossroads of nonprofits and billionaires aching to buy their governments.

Ann Corkery served as a finance vice chair for Mitt Romney's first Presidential bid in 2008 and is employed by Security National Servicing Corporation as "Director of Philanthropy". Security National appears to specialize in lender-owned properties. I'm guessing they snag these properties at a song, keep them out of foreclosure and sell them at a profit. What philanthropy has to do with it is anyone's guess, but that's what Ms. Corkery does. She is uniquely positioned, as is her husband.

As you review Wellspring's acts of charity, you see tinges of Koch, DeVos, and mainline Republican fingerprints all over it. Clearly it's a major pipeline channel for right-wing organizations desperately in need of their billionaires' support.

Who does Wellspring Committee Support?

As it turns out, they're a pretty generous lot. Lucky recipients for 2010 included:

• American Majority: $1,020,125 Lots of grassroots to be had for the low, low price of a million.
• The Annual Fund: $2,450,000 This organization came into being on September 1, 2010 in time for the midterm elections, and closed its first year on September 30, 2011. This grant by WCI represents nearly all of its first-year income. It then turned and distributed nearly $1.5 million to Right Change in North Carolina, a group founded by Pharma King Fred Eshelman. RightChange targeted Patty Murray, Charlie Crist, Harry Reid and Michael Bennet in the 2010 midterms.

  $500,000 was also distributed by The Annual Fund to FreedomVote, Inc, an Ohio-based 501c4. FreedomVote's mailing address is a FedEx/Kinkos in Dayton now, but the originally reported address went to a Republican PR guy and Boehner crony by the name of Thomas Whatman, who also manages Boehner's PAC, Freedom Project. How that $500,000 was used, I do not know. They have a bare-bones website and little else. I found no records of independent expenditures with the FEC, and so it remains a mystery for now.

  Finally, The Annual Fund gave $475,000 to a group called Citizens for the Republic, which is yet another 501c4 organization launched by old-timer Reaganites and headed up by Craigan Shirley, of Shirley and Bannister lobbying fame.

  Other smaller grant recipients include Independent Women's Voice, where Heather Higgins is the Executive Director and was part of the bizarre James O'Keefe email loop regarding a conspiracy to frame the SEIU and undermine their get out the vote effort, and Enterprise Washington, which is a trade association group of businessmen in Washington state.

  One large grant grew many offshoots, didn't it?

• Citizens for the Republic - $360,000 This donation was in addition to the $475,000 passed through via The Annual Fund, and is one of the strongest indications that these organizations are used as conduits by groups of like-minded right-wingers.
• Faith and Freedom Coalition - $250,000 Ralph Reed's newest incarnation of the Christian Coalition.
• Franklin Center - $160,000 The Koch-funded propaganda apparatus operating out of Wisconsin
• Freedom Vote - Oh, look! Another $200,000 into a black hole of non-accountability.
• Federalist Society - $200,000
• RightChange - $900,000 - A companion contribution to the $1.5 million funneled through The Annual Fund
• Illinois Manufacturing Association - $500,000 I'm curious as to whether this group sponsored ads supporting crazy deadbeat dad Joe Walsh.
• Judicial Crisis Network - $350,000 - Don't be fooled by the name. It's a group formed to undermine democracy wherever it can. President Gary Marx is a long time associate of Ralph Reed. In their first reporting year of July 1, 2009 to June 30, 2010, they boast of spending nearly $800,000 to "[advocate] for the importance of judicial restraint in the debate over the 2010 hearing for U.S. Supreme Court nominee. It also became heavily involved in state supreme court nominations." The SCOTUS nominee mentioned had to be Elena Kagan. I suppose they're the ones who started the rumor that she's gay, too. That would explain part of their opposition to her nomination since they're a bunch of homophobes over that way.
• Better Courts For Missouri - $850,000 It seems right-wingers don't like elected judges very much, so they have been campaigning since 2008 to shift that over to the governor's office. Unfortunately, lawyers don't like it either, and this group failed to get the required signatures to place a constitutional amendment on the 2012 ballot. That hasn't stopped this group from pouring thousands into the state to unleash a huge propaganda campaign against "George Soros judges."
• Michigan Chamber of Commerce - $125,000 In 2010, the Michigan Chamber of Commerce was one of the preferred money laundering conduits for state races. Millions flowed through them and out to other states and candidates. Looks like this organization was a minor contributor.

In 2009, Wellspring was more or less dormant. A few small grants went out to Missourians for Better Courts, the Know Campaign, and around $111,000 was paid out for "citizen outreach regarding state level issues and policies." I'm guessing that was the beginning of the astroturf anti-health care reform effort, or maybe just general muckraking.

But in 2008, Wellspring was flowing like a river after a month of rain. You're starting to see the pattern here, right? Nothing much happens in the out years, but in those even years, boy howdy, they get busy. Here are but a few of their 2008 projects:

• Americans For Job Security: $2,605,824
• Americans for Prosperity: $2,000,000
• American Energy Alliance: $509,000
• Wisconsin Manufacturers and Commerce Association: $200,000
• American Future Fund: $367,500
• National Right to Life Committee: $542,000
• Susan B Anthony List: $753,000
• Louisiana Conservative Action Network: $312,000

You get the idea. WCI received a total of $10 million and change in grants, and flowed through about $7.3 in grants to other organizations. Of course, by serving as the conduit, the other organizations can disclose their donors without actually disclosing their donors. That leaves anyone who is interested simply guessing who the donors might be.

Call me cynical, but Ralph Reed's close ties to organizations receiving these conduit funds makes me feel like we're getting dangerously close to a more sophisticated operation that looks a lot like Jack Abramoff's past handiwork. I'm not sure anyone who was that close to that many millions and escaped any punishment isn't capable of reconstituting his money train yet again, using tax-exempt organizations and a desperate right wing to move him up prosperity road.

Make a note: The Wellspring Committee is one of several major players in the right wing network. Each has their function, and all the billionaires do is choose from the menu of organizations to use for the laundering operation, which is why I will continue to write these long, detailed, link-laden posts about them. Because even if you don't care much now, you will the next time one of these groups tries to shove their right wing candidates, agendas, judges, or news themes in your face.

For those of you who have been following my series on how non-profits are abused to finance right wing agendas, campaigns and elections, this is a good sign. Mother Jones reports that former IRS director Marcus Owens has called for a bright-light focus on them.

"The government's going to have to investigate them and prosecute them," says Marcus Owens, who ran the IRS' tax-exempt division for a decade and is now a lawyer in private practice. "In order to maintain the integrity of the process, they're going to be forced to take action."

In their initial applications seeking tax-exempt status under a particular provision of the tax code, section 501(c)(4), dozens of political non-profits told the IRS their political spending would be limited or, in some cases, non-existent. (Otherwise, they wouldn't qualify for this advantageous tax status, which allows them to take foreign donationsand hide the identities of their funders.) But ProPublica reported that many of those groups have spent big on politics. In 2008, for instance, the Iowa-based American Future Fund assured the IRS on its tax-exempt application that it would spend "no" money to influence elections; the same day the group mailed its application, it released a web adhailing then-Sen. Norm Coleman (R-Minn.) and went on to spend $8 million on politicking in the 2010 elections. Americans for Responsible Leadership, an Arizona-based nonprofit, was more bold: It told the taxman it would engage in zero political work. It then spent $5.2 million backing Mitt Romney.

Regular readers know I've been banging this drum for a very long time. In recent days, I've written about Americans for Job Security, American Commitment, and the American Action Network. I have several other reports in the pipeline about even more organizations because every time one is uncovered, four more pop up.

These organizations do not simply exist to function as conduits for elections. They exist to guide large sums of money into unaccountable silos to fight against candidates and issues on a state by state basis. No issue is too small for billionaires to take up, and the real beneficiaries are the consultants, media buyers and fundraisers who are paid millions to push the message out.

Millions in, garbage out. Yes, investigate and prosecute would seem to be a no-brainer. Ironically, the only 501c4 who has had their status denied is Emerge America, a group that recruits and trains Democratic candidates. Funding for Emerge America is a drop in the bucket compared to the millions that have flowed through these nonprofits on the right-wing side. Ironically, what cost Emerge America their exemption was the truth, which they told on their application for exemption.

Conversely, right wing organizations put a lot of nonsense and lies in their applications, get approval, and the IRS never spends another moment on them. Here's an example of the crap they say:

XYZ Committee, Inc is a social welfare organization dedicated to educating and informing American citizens, in an in-depth manner, about free market principles and policies and about the importance of working together to encourage opinion leaders and public officials to support ideas, programs and policies that promote the concept of a free market.

XYZ Committee, Inc. will work to inform the general public about various public policy issues...and will promote the concept of a free market as the appropriate solution.

[...]

XYZ Committee, Inc does not plan to produce its own publications or advertisements at this time, but XYZ does intend to help other organizations plan for and create campaigns that will best communicate the policies and principles of a free market to the general public.

That particular organization received approval three months after they filed their application.

Despite repeated calls by watchdog organizations to look into the activities of Crossroads GPS and allied entities, nothing happens. Via the Mother Jones article:

Tax experts like Owens, Hill, and Tobin aren't the only ones prodding the IRS to take action. Campaign finance watchdogs have hounded the agency for years for not investigating and punishing politically active nonprofits. In a letter dated January 2, lawyers with the Campaign Legal Center and Democracy 21, two groups that favor more regulation of political money, urged the IRS to officially deny tax-exempt status to Rove's Crossroads GPS. (The group's application is technically still pending.)

"Crossroads GPS served as little more than a campaign operation in 2012," the lawyers wrote.

Collegio, the Crossroads spokesman, has dismissed the letter as "the 25th identical letter that the partisans and ideologues at the Campaign Legal Center have sent to the IRS, and it doesn't merit anyone’s attention."

Well, yes. It absolutely merits attention. But it never seems to get any.

I will volunteer my time to the IRS to assist in the audit process of these organizations, if it would help get this done. If they allow these organizations to serve as money laundering operations for campaigns and elections, do you suppose there might be money laundering occurring in other contexts?

Get on it, IRS.

American Action Network is born

On June 30, 2009, Norm Coleman conceded the fierce race for his Minnesota Senate seat to Al Franken. On July 8, 2009, Franken was sworn in. On July 23, 2009, Coleman took the helm of a new non-profit entity seeded with over two million dollars in grants, courtesy of his billionaires.

Coleman's entity is the American Action Network, self-branded as an "action tank" to create, encourage and promote center right policies".

On the required filings for tax-exempt status with the IRS, AAN stated it would put a minor emphasis on political campaign intervention, seeking to focus instead on policies and creation of "educational materials." It also claimed its priority was to educate "the public on values and policies that will promote prosperity, freedom and security, and advocating legislation that will do the same." They went on to state that "express political advocacy by the Network will be ancillary and will not become the Network's primary activity."

Those statements were signed under penalty of perjury by Norm Coleman on February 20, 2010.

American Action Network in action

In its first reporting year (July 23, 2009 to June 30, 2010) AAN received over $2.75 million in grants. Two of the grants were for a million dollars each. None of them were less than $25,000.00. In the second reporting year, (July 1, 2010 to June 30, 2011) AAN received $27.5 million in grants.

In between its beginning and the end of the second reporting period, midterm elections took place in November, 2010. American Action Network spent $26 million on ads similar to the 2012 version at the top of this post.

In 2012, American Action Network reported federal independent expenditures of $10,747,500 and gave another $178,000 or so to the Congressional Leadership Fund to cover payroll and office expenses. The two organizations targeted Democratic Congressional candidates across the nation.

Donors to AAN for the 2012 election cycle, discovered via investigation by CREW, Open Secrets and ProPublica include PhRMA, American Natural Gas Alliance, and Crossroads GPS. Here's the list with amounts donated:

Currently, the only way to discover the amounts received from other organizations is to wait for them to file their disclosures and then use those to identify "grants" made from one organization to another. And as we've seen with some organizations, they do everything they can to avoid transparency requirements, including using weird acronyms, "forgetting" to add taxpayer ID numbers, shortening the address so it cannot be matched up, and other similar tactics. Add to that the delay in getting reports filed and it's a hit-or-miss proposition, but so far this is what has been revealed.

The other large donor listed there, the Republican Jewish Coalition, is Sheldon Adelson's 501c4 organization. Surprise!

AAN's place in the puzzle

AAN seems to function as the Congressional race arm of the Karl Rove/Haley Barbour funding network. This would explain the higher expenditures in 2010 during the midterms, when a higher concentration of money can be put toward buying the House of Representatives. It's clearly a favorite of Sheldon Adelson and other Rove cohorts. Despite the claim that it exists to "educate" the public, it's clear that its sole purpose for existence is to be the conduit for high-rolling donors who don't want to be identified.

It's worth noting that Fred Malek, Mitt Romney's finance chair serves on the AAN board along with C Boyden Gray, late of FreedomWorks. I'm sure there was no coordination going on there, of course. Other board members include Vin Weber, billionaire B. Wayne Hughes, Jr., George Allen, Mel Martinez, and Home Depot co-founder and financier Ken Langone.

As we roll toward the 2014 midterms, watch the ads. I'm willing to bet AAN will play big for any district where Democrats are running. It's not just the gerrymandering that costs us the House; it's the huge money poured into those districts.

Americans for Job Security Anti-Obama ad

After Citizens United, attention has been paid to the sheer amount of money the right wing poured into elections and how that money has influenced public opinion, debate, and outcomes. But for the most part, attention has been placed on the so-called SuperPACs and their participation. While American Crossroads and others were certainly big players on the national landscape, little attention has been paid to how they operate on a state by state basis, and how they are used to launder money across state lines in order to subvert even the mildest disclosure requirements. In this post and ones to follow, I'll be putting the spotlight on these organizations and how they operate together to subvert democracy.

In California, Governor Jerry Brown put a measure on the November 2012 ballot to raise income and sales taxes in order to continue funding California schools and universities (Prop 30). Unlike most tax measures, Californians were in support of raising taxes in order to save our struggling school system. Another ballot measure would have stripped unions in California of their ability to participate in political speech while giving large corporations unlimited ability to spend on elections (Prop 32). Public opinion was mixed on that proposition.

In October, 2012, $11 million came into the state to oppose Prop 30 and support Prop 32. The organization which received and spent the money was called Americans for Responsible Leadership, a group organized in Arizona in 2011. California authorities filed a lawsuit to force Americans for Responsible Leadership (ARL) to reveal their donors. Ultimately, they won the right to discover who gave ARL the funds, but they didn't discover the people behind the money.

When ARL was forced to disclose, they revealed that the money had come from an organization in Phoenix called the Center to Protect Patients Rights. When the Center to Protect Patients Rights was asked for the source of the funds, they pointed to Americans for Job Security (AJS). (application/pdf - 111.5 KB)

In summary, the money trail looked like this:

Mystery donors give $11 million --> Americans for Job Security --> Center for Patients Rights --> Americans for Responsible Leadership --> Ad buys in California opposing Prop 30, supporting Prop 32

Americans for Job Security: Conduit for dark money

Americans for Job Security has been on the landscape since 1997. According to their IRS filings, they are a trade association, exempt from taxes under 501(c)(6) of the Internal Revenue Code, established by business owners to convey a "pro-paycheck message." Established by Bush political director David Carney, its chief officer through 2008 was Michael Dubke. Michael Dubke is a founding partner in two critical Republican operations: Crossroads Media and the BlackRock Group. Crossroads Media is the primary media buyer for the Karl Rove organizations, Crossroads GPS and American Crossroads. The BlackRock group is the architect of the SwiftBoat Network structure, where supposedly a third party coordinates messaging between unrelated nonprofit groups. AJS is currently run by a 27-year old student at Johns Hopkins University by the name of Stephen DeMaura, whose primary claim to fame prior to this was creating an anti-Hillary Clinton Facebook page in 2008 and serving as director of the New Hampshire Republican Party.

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Now that the final FEC reports are in for Election 2012 and we can survey the damage, it's clear that the Kochtopus has grown, spread, and infected everything from state redistricting initiatives to the national races.

In the process, they've promoted some of their rising stars to lead positions, and so we've got some new names to watch for in the upcoming midterms.

Getting the information for this post was a little difficult, because it seems that the right wing Kochtopus entities have decided to make it difficult for anyone to access their federal form 990 after the 2010 filing year. I've sent out requests to 29 different organizations for their most recent forms. As they come in, I'll share them all with you. For now, here's what we are able to figure out about these new organizations and people.

American Commitment

American Commitment was born in April, 2012. According to their website, the purpose of American Commitment is to "fill the capabilities gap between think tanks engaged in pure public policy work and grassroots organizations engaged in mobilizing citizen activists."

American Commitment's Executive Director and general man-in-charge is Phil Kerpen, who seems to have received a promotion from his former position as policy director at Americans for Prosperity. Kerpen has moved up the Koch ladder to a place of honor as the new director of their newest project. The video at the top is a segment he did with Sean Hannity bashing Van Jones while tying him to Barack Obama, all of which was done without much mention of which organization Kerpen represented at the time.

Here are some of their projects, in no particular order, just to give you a flavor of the tone and tenor of their "grassroots" efforts:

• HouseStandStrong.com
• NoMandateTax.com
• WarOnCoal.com
• ALECPetition.com
• KeystoneXLNow.com
• StandWithWalker.com
• ObamaDoublespeak.com

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