One Man Has Set Up a $1.6 Billion Slush Fund to Fuel the Radical Right’s Takeover of Congress; Get Ready for a Dirty Tricks Campaign

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One Man Has Set Up a $1.6 Billion Slush Fund to Fuel the Radical Right’s Takeover of Congress; Get Ready for a Dirty Tricks Campaign

By Pam Martens and Russ Martens: August 26, 2022 ~

Senator Sheldon Whitehouse (D-RI), the Resident Expert in Congress on Dark Money Groups

The New York Times dropped a political bombshell on Monday. The public interest website, ProPublica, built further on the story that afternoon. And, as luck would have it, Wall Street On Parade finds itself in the unique position of filling in missing pieces of the story thanks to an investigative report we published in 2010.

The gist of the story is this: a sketchy billionaire named Barre Seid decided last year to donate his electronics manufacturing company, Tripp Lite, to a nonprofit tied to the radical right called Marble Freedom Trust. After the transfer of ownership to the nonprofit, Tripp Lite was then sold to the Dublin, Ireland based power management company, Eaton, thus avoiding capital gains taxes on the sale. This handed the nonprofit a cool $1.65 billion in tax free money from the sale of the business. In other words, the U.S. taxpayer is subsidizing the radical right’s ability to trash democracy in the U.S.

Nothing about this maneuver appears to be illegal, a screaming call for reforming current laws if ever there was one. And, apparently, in an effort to make sure all the legal t’s had been crossed, the nonprofit hired the Big Law firm of Sullivan & Cromwell to handle the transaction and paid the law firm the hefty fee of $940,000.

Sullivan & Cromwell’s former law partner, Jay Clayton, was appointed by Donald Trump during his time as President to head the Securities and Exchange Commission. Trump apparently liked what he saw in Clayton because Attorney General William Barr then tried to oust the sitting U.S. Attorney for the Southern District of New York and replace him with Clayton. That episode backfired badly. See our reporting: U.S. Attorney Geoffrey Berman’s Ouster: The Untold Story.

So who is this Barre Seid that the public has never heard of who has the ability to drop a cool $1.65 billion into the lap of the radical right? It just so happens that our knowledge of Barre Seid dates back to November 16, 2010 when Salon published an article by Justin Elliott naming Seid as the likely source of money for a widely-distributed race-baiting film released just weeks before the presidential election of 2008, where the radical right was hoping to defeat presidential candidate Barack Obama by pushing conspiracy theories that he wasn’t born in the U.S. and was a Muslim. (Obama’s faith is Christian and he has released his birth certificate showing he was born in Hawaii.)

The Salon article captivated our attention because it built on an earlier article we had published at CounterPunch on October 26, 2010 about a dark money slush fund called Donors Capital Fund that was sluicing money to the radical right. We had broken the story that Donors Capital Fund had given $17,778,600 to the dark money Clarion Fund to produce the race-baiting film, but we were not able to name the individual who had given the money to Donors Capital Fund.

Salon named Seid as the likely mystery man and produced a tax document that had inadvertently exposed Seid as the donor of $16.775 million of the money that went to the Clarion Fund in 2008. That sum represented more than 90 percent of the Clarion Fund’s total contributions in 2008, meaning the bulk of the funding for the film could not have come from another source. Nonetheless, Seid’s representative denied to Salon that Seid had funded the film but would not comment on whether Seid had told Donors Capital Fund to donate the money he had provided to it to fund the film.

Donors Capital Fund and its sister, Donors Trust, are classified as Donor-Advised Funds, meaning they are dark money groups that don’t publish the names of their donors but do take advice from the donors on where to secretly sluice the money.

One of the first donations made by the newly-established Marble Freedom Trust from the $1.65 billion it received from the sale of Seid’s business was a $41 million donation to Donors Trust, according to its tax filing for last year.

Below are excerpts from our 2010 reporting on the Clarion Fund and its financing of the race-baiting film. (Read our full report here.)

Seven weeks before the Presidential election of 2008, approximately 100 newspapers and magazines in the U.S., including the New York Times, Wall Street Journal, Miami Herald, Philadelphia Inquirer, and St. Petersburg Times, distributed millions of DVDs of the documentary, “Obsession: Radical Islam’s War Against the West.” Altogether, including a separate direct mail campaign, 28 million DVDs flooded households in the swing voter states.

The newspapers did not know who was funding this massive propaganda campaign and, apparently, did not care. They inserted the DVD in their Pulitzer properties with the casualness of throwing in a sample of suds free detergent. The nonprofit organization named on the packaging of the DVD as the entity behind the film, the Clarion Fund, Inc., had no known history of operations and had a virtual office address in New York City with no physical presence and no employees on site. Documents submitted to the IRS to obtain its tax-exempt status show the Clarion Fund demanded total secrecy from its vendors:

“At all times, whether during or after the provision of services to Clarion, Service Provider shall keep in confidence and shall not disclose or use, for his or another’s benefit, any nonpublic knowledge, data, material, document or other information of any type that is related to Clarion, or its subsidiaries, directors, members, managers, agents, employees or other affiliates or that Service Provider otherwise acquires in the course of providing services (collectively, the ‘Confidential Information.’).”

The DVD packaging was slick, leveraging the imprimatur of the big league media outlets by listing 73 of their names as part of its distribution network. The cover carried a red banner blaring: “As seen on CNN and FOX News by more than 20 million viewers worldwide.” The title of the film was graphically enhanced with the “O” in “Obsession” sporting the Islamic crescent moon and star and the “N” represented by an upended fearsome automatic weapon. The movie content was slick as well. The first half is endless scenes of suicide bombers and human carnage; the second half of the film intersperses clips of Hitler, Hitler Youth, or Hitler analogies intermittently with Muslim crowds and young children with fists in the air calling for death to westerners. Once at the beginning and again at the end, the film reminds us that not all Muslims ostensibly want to kill us; in the middle of the film it quantifies the number that do (without any support to back up this hunch): a cool 100 to 150 million, i.e., 10 to 15 per cent of 1 billion Muslims…

The reaction to corporate media peddling this propaganda in the final days of a Presidential race where one candidate was already being smeared for Muslim ties was immediate and harsh. A writer at Democratic Underground using the moniker MrMickeysMom grabbed the keyboard to vent a spontaneous reaction: “Okay – Who ELSE just picked through the Sunday advertisements and viewed this DVD today?…They’re here to warn us about the declaration of war on Western Culture and to bring down Christianity and Judaism – just in time for the election. So, this is the heat, folks. This blitz DVD is one more step – the biggest, boldest step I can see to orchestrate fear, hatred and to change your vote…It told me that the White House will be changed and become the Muslim House…that America has to wake up and that America is strangling itself with ‘our political correctness.’ ”

Margaret Lewis of Durham, North Carolina fired off a letter to The News & Observer of Durham, North Carolina: “I cannot believe that I was sent the hate-inflaming, fear-mongering video disk ‘Obsession’ in my newspaper! What will you enclose next? KKK robes?”

Hal Chase of Hudson wrote to the St. Petersburg Times: “My wife and I were shocked to see the CD entitled Obsession tucked innocently among the ads in our Sunday paper. This hate-filled propaganda is just part of the right-wing extremists’ fear and smear tactics. Their hope is to make Americans afraid of anyone who is not exactly like them, and thereby affect the outcome of November’s election.”

Approximately 60 newspapers refused to accept the DVD for distribution, including the Detroit Free Press, the Plain Dealer of Cleveland, the St. Louis Post-Dispatch and The News & Record of Greensboro, North Carolina.

At the time, John Robinson, Editor of The News & Record, said the paper declined to distribute the DVD because “…it was divisive and plays on people’s fears…As I’ve said on other occasions about news decisions, just because you can publish doesn’t mean you should.”

We can now report what this race-baiting, fear-mongering campaign cost and where the money, at least nominally, came from…

The full tab, and then some, was paid by the super secretive libertarian nonprofit, Donors Capital Fund. In 2008, Clarion Fund became Donors Capital Fund’s largest grantee by a large margin, receiving $17,778,600. That sum constituted 96 per cent of all funds received by Clarion in 2008 and 9 times its revenue in 2007…

There are shades of Charles Koch all over Donors Capital and Donors Trust. Two grantees receiving repeat and sizeable grants from Donors Capital are favorites of the Koch foundations: George Mason University Foundation and Institute for Humane Studies. Another tie is Claire Kittle. A project of Donor’s Trust is Talent Market.org, a headhunter for staffing nonprofits with the “right” people. Ms. Kittle serves as Talent Market’s Executive Director and was the former Program Officer for Leadership and Talent Development at the Charles G. Koch Charitable Foundation. Then there is Whitney Ball, President of both Donors Capital Fund and Donors Trust. Ms. Ball was one of the elite guests at the invitation-only secret Aspen bash thrown by Charles Koch in June of this year, as reported by ThinkProgress.org. Also on the guest list for the Koch bash was Stephen Moore, a member of the Editorial Board at the Wall Street Journal. Mr. Moore is a Director at Donors Capital Fund. Rounding out the ties that bind is Lauren Vander Heyden, who serves as Client Services Coordinator at Donors Trust. Ms. Vander Heyden previously worked as grants coordinator and policy analyst at the Charles G. Koch Charitable Foundation.

Legal counsel for the Kochs has declined to respond to two emails with a week’s lead time seeking clarification of the relationship the Kochs have to Donors Capital and Donors Trust.

What remains unclear is the underlying donor within Donors Capital who made the large sum possible. Was it a joint effort by wealthy donors to boost Senator McCain’s presidential aspirations? Was it a single Islamophobe? While the DVDs were hitting the front lawns bundled in newspapers, the Clarion Fund posted an endorsement for McCain as President on its web site, a legal breach for a 501 (c) (3) nonprofit. When it was outed by the media, it quickly removed the endorsement. What is certain is that the donor(s) had every reason to believe they would never be discovered. The organization advises contributors on its web site: “Unlike with private foundations, gifts from your account will remain as anonymous as you request.”

Seid’s relationship to the Charles Koch’s radical right network of nonprofits and climate change denial groups has been well documented. This latest creation of the Marble Freedom Trust follows the well-worn path of secrecy finetuned by the Koch network.

The tax filing for Marble Freedom Trust shows that at the time of the massive gift of $1.65 billion, the nonprofit had no employees, thus making it appear to be little more than a slush fund to spread money around to other dark money groups. That impression is further supported by the fact that Marble Freedom Trust quickly sluiced $210 million of its loot to three other nonprofits with a history of funding the radical right. Unfortunately, Marble Freedom Trust’s tax filing for the pivotal period of May 1, 2022 through April 30, 2023 – showing where the rest of the $1.65 billion went, may not be available for years.

The tax filing for Marble Freedom Trust has two other unusual qualities. It provides a residential home address in Utah as its business location. That address belongs to Tyler Green, a lawyer with the Washington D.C. litigation boutique firm of Consovoy McCarthy. Green works out of Utah. The law firm is widely known for its legal work in attempting to stop Congress and New York prosecutors from obtaining Donald Trump’s financial records. The other unusual quality is that the phone number listed for Marble Freedom Trust is not a Utah phone number but a Palm Beach County, Florida phone number belonging to Neil Corkery.

Corkery has been heavily tied in the past to dark money groups and a byzantine series of money machinations. On its tax filing, Marble Freedom Trust lists the Supreme Court packer, Leonard Leo, as its Chairman and Trustee. Green is listed as Administrative Trustee. It lists the following as related organizations: America Engaged, BH Fund, Rule of Law Trust. The Rule of Law Trust was sluiced a whopping $153 million from the newly-formed Marble Freedom Trust last year.

On March 10 of last year, Senator Sheldon Whitehouse, who has become an expert on the dangerous threat that dark money poses to U.S. democracy, called a hearing on the subject. Whitehouse chairs the Judiciary’s Subcommittee on Federal Courts, Oversight, Agency Action and Federal Rights. Lisa Graves, President of the Center for Media and Democracy, provided extensive testimony on dark money groups, including those tied to Leo, Corkery and Charles Koch. Graves provided written testimony as follows about America Engaged, the BH Fund, and the Rule of Law Trust:

“America Engaged. Leo is this group’s president, and [Jonathan] Bunch is a director. Other board members are C. Boyden Gray and Todd Graves, a former state attorney general. It has given nearly $4 million to Charles Koch’s Freedom Partners. In 2017, it gave nearly $1 million to the NRA as it backed [Supreme Court Justice Neil] Gorsuch…

“BH Fund. Leo is the president; Bunch is a director. It was launched with a secret $24 million donor and gave $20 million to George Mason University’s law school, securing Scalia’s name and Leo’s special influence…

“Rule of Law Trust. As Wellspring was being closed down, Neil Corkery created this group in 2018. Leo is listed as its only trustee, and almost all its known expenses are related to BH Group reimbursements, another Leo group. Rule of Law Trust brought in three contributions (possibly from one, two, or three individuals) totaling $80 million in 2018. It distributed two grants in 2019: $500,000 to People United for Privacy and $895,000 to America Engaged.”

You can read the full written testimony of Lisa Graves here as she documents the vast right-wing dark money groups that are killing U.S. democracy, one billionaire donation at a time.

If there is a message of hope in all of this, it is the fact that a recent NBC poll found that the top issue on the minds of registered voters is “threats to democracy.” It would appear that dark money withers when exposed to disinfecting sunshine.

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