Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Silicon Valley's Awful Race and Gender Problem in 3 Mind-Blowing Charts

| Thu Jun. 6, 2013 11:11 AM PDT

Catherine Bracy moved to San Francisco from Chicago during the 2012 campaign to run Team Obama's technology field office, a first-of-its-kind project that enlisted Silicon Valley's whiz-kid engineers to build software for the campaign. (That tech savvy, of course, played a pivotal role in Obama's victory.) What struck Bracy about the tech-crazed Bay Area, she recounted Thursday in a talk at the Personal Democracy Forum tech conference, was the jarring inequality visible everywhere in Silicon Valley—between rich and poor, between men and women, between white people and, well, everyone else.

Bracy's talk featured some eye-popping charts on Silicon Valley's race and gender divide. Here are three of them.

In 2010, the latest year for which Bracy could find data, 89 percent of California companies that got crucial seed funding were founded by men. What percentage were all-female founding teams? Just three percent.

CB Insights, Venture Capital Human Capital Report, January-June 2010

Bracy looked at that funding breakdown by race—and there's even less diversity. In 2010, less than 1 percent of the founders of Silicon Valley companies were black, a figure so small Bracy didn't put it on her white-guy-dominated pie chart.

CB Insights, Venture Capital Human Capital Report, January-June 2010

And when looking at the economic winners and losers in Silicon Valley, that racial disparity really pops out. From 2009 to 2011, income for blacks living in Silicon Valley dropped by 18 percent, compared to a decrease of 4 percent nationally. Hispanics fared badly, too. The big winners were whites and Asian Americans.

Silicon Valley Foundation/Joint Venture Silicon Valley, 2013 Silicon Valley Index

Oh, one more thing: According to Bracy, women make 49 cents for every dollar men make in Silicon Valley. You don't need a chart to feel the force of that statistic.

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Montana Republicans Launch Campaign to Ban Dark Money

| Wed Jun. 5, 2013 8:07 AM PDT
Sen. Jon Tester (D-Mont.), right, was helped in his 2012 reelection bid by dark money spending.

Unlike their counterparts in Congress, state lawmakers around the country are speeding ahead with efforts to reform how campaigns are funded and to address the flow of dark money into elections. Democrats in New York's legislature want new legislation creating a public financing system for statewide elections. In California, the Democratic-controlled Senate recently passed its own DISCLOSE Act, which would force groups running political ads to name the top three funders of those ads and compel full disclosure of donations masked by pass-throughs or shell companies.

Now comes Montana. On Tuesday, a group of state Republican lawmakers unveiled a new initiative to ban dark money in state political campaigns. The lawmakers and their allies hope to put a dark-money ban initiative on the ballot for the November 2014 elections. A similar piece of legislation, Senate Bill 375, won the backing of Democrats and Republicans in Montana's Senate last legislative session but later died in the state House.

The Republican backers of the ballot measure effort say they expect plenty of Democratic support. "It may be a Republican group that's kicking it off, but it is a joint initiative and it will be a bipartisan cause," state Rep. Roger Hagan (R) told the Great Falls Tribune.

Here's more from the Tribune:

Buffalo Republican Sen. Jim Peterson, SB 375's sponsor, said the initiative would require "full transparency" in Montana state elections.

Peterson said anonymous spending by third-party 501(c)(4) nonprofit political groups has corrupted the political process by allowing undisclosed, outside spending in local races.

"Dark money has brought great divisiveness to the election process," Peterson said. "Locals have no idea who is influencing their politicians and their government officials, so today we're going to put the power back into the democratic process and let the people answer this question for us."

The measure is still in the works, and draft ballot language of the proposed measure should be available within 30 days, Peterson said.

For a proposed initiative to qualify for the ballot, it needs to be submitted to the Legislative Services Division. Then, it must pass a legal review by the Montana Attorney General’s Office. If the ballot language is approved, the sponsor must collect signatures from 5 percent of the total number of qualified voters in Montana, including 5 percent of the voters in each of 34 legislative House districts.

Montanans saw a flood of anonymous political spending in 2012, due to the combination of cheap ad rates and a fiercely fought US Senate race pitting incumbent Jon Tester against Republican Denny Rehberg. As ProPublica reported, total spending in the Tester-Rehberg race reached $51 million, twice as much as was spent in Tester's 2006 race. Of that, roughly $12 million was dark money.

Money from undisclosed sources played an pivotal role in Tester's victory. It helped libertarian candidate Dan Cox grab more votes than any libertarian candidate statewide in a competitive race—votes Rehberg needed to unseat Tester. In the end, Tester won by nearly 4 percentage points.

Rep. Darrell Issa: Tea Party-Targeting IRS Staffers Took Their Orders From Washington

| Mon Jun. 3, 2013 9:14 AM PDT
Rep. Darrell Issa (R-Calif.).

Despite the claims of Obama administration officials, the IRS scandal is not the fault of "rogue" staffers in Cincinnati, according to Rep. Darrell Issa (R-Calif.). No, the chairman of the House oversight committee charges—despite the paucity of evidence backing him up—that it leads all the way back to the agency's headquarters in Washington.

On CNN's State of the Union on Sunday, Issa made some of his strongest claims yet that top IRS brass knew of, if not directed, the targeting of right-leaning groups applying for tax-exempt status for special scrutiny. Issa also ripped Obama administration officials for denying that the IRS scandal reaches back to Washington.

"The administration is still trying to say there's a few rogue agents in Cincinnati, when in fact the indication is they were directly being ordered from Washington," Issa said.

He called White House Press Secretary Jay Carney the administration's "paid liar" while accusing him of dissembling about the extent of the IRS scandal. Carney, Issa said, is "still making up things about what happens and calling this a local rogue. The reason that [IRS director] Lois Lerner tried to take the Fifth [Amendment when asked to testify before Congress] is not because there's a rogue in Cincinnati. It's because this is a problem that was coordinated in all likelihood right out of Washington headquarters. And we're getting to proving it."

Issa also suggested—again, without evidence—that tea partiers' complaints about the agency's heavy-handed treatment were overlooked because it was an election year. "My gut tells me that too many people knew that this wrongdoing was going on before the election, and at least by some sort of convenient benign neglect allowed it to go on through the election, allowed these groups, these conservative groups, these, if you will, not friends of the president to be disenfranchised through an election," he said. "Now, I'm not making any allegations as to motive, that they set out to do it. But certainly, people knew it was happening."

There's been quite a bit of fallout since the IRS scandal erupted two weeks ago, when Lerner, who runs the IRS division that oversees politically active nonprofits, apologized for the singling out of conservative groups. Lerner is now on paid leave. Steven Miller, the acting commissioner of the IRS when the scandal broke, resigned his position; he was replaced by Danny Werfel, an Obama administration official. Members of the House and Senate have held numerous hearings on the issue, blasting Lerner, Miller, and the Treasury inspector general whose report found numerous examples of wrongdoing but no evidence of political bias. The release of an internal video showing IRS staffers learning a dance called the "Cupid Shuffle" at a 2010 conference has only added to the agency's woes.

Werfel, the current acting commissioner, will address the video and the IRS' targeting scandal at Congressional hearings this week.

Cigarette Maker Funded Dark-Money Conservative Groups

| Fri May. 31, 2013 11:49 AM PDT

When we use the term "dark money," we're usually referring to politically active nonprofit groups—like the kind at the center of the recent IRS scandal—that spend millions on political campaigns yet don't disclose their funders. Think Karl Rove's Crossroads GPS, Koch-backed Americans for Prosperity, and pro-Democrat Patriot Majority. Rarely, if ever, does the public learn who bankrolls these organizations.

This week, though, we got one such glimpse. As the Center for Public Integrity reported, Reynolds American Inc., the corporation behind Camel and Winston cigarettes, funded several high-profile dark money groups in 2012. Reynolds doled out $175,000 to Americans for Tax Reform, conservative activist Grover Norquist's anti-tax group. The company also gave $50,000 to Americans for Prosperity, $45,000 to the US Chamber of Commerce, and $100,000 to the Partnership for Ohio's Future, an Ohio Chamber-backed group that supported restricting the worker bargaining rights.

Here's more from CPI's Dave Levinthal:

The tobacco company’s donations are just a fraction of the nearly $50 million that those two groups reported spending on political advocacy ads during the 2012 election cycle, almost exclusively on negative advertising. Federal records show that Americans for Prosperity alone sponsored more than $33 million in attack ads that directly targeted President Barack Obama.

But the money, which Reynolds American says it disclosed in a corporate governance document at the behest of an unnamed shareholder, provides rare insight into how some of the most powerful politically active 501(c)(4) “social welfare” nonprofits are bankrolled.

Reynolds American is the parent company of R.J. Reynolds Tobacco, which makes Camel and Winston brand cigarettes.

“The shareholder specifically requested that we disclose information about 501(c)(4)s, and in the interests of greater transparency, we agreed,” Reynolds American spokeswoman Jane Seccombe said.

Large corporations—tobacco companies or otherwise—almost never release information about their giving to such groups, and it’s most unusual for the groups themselves to voluntarily disclose who donates to them.

After the Supreme Court's 2010 Citizens United decision, which freed corporations to pump vastly more money into American campaigns, businesses faced two options. They could donate to super-PACs, which can raise and spend unlimited sums of money but must disclose their donors. Or they could fund politically active nonprofits, which can dabble in politics but don't name their donors. In the wake of Citizens United, we heard countless warnings about a "flood" of corporate cash into politics through big-spending super-PACs. But that flood never quite materialized: For-profit corporations accounted for just over $1 of every $10 raised by super-PACs in the 2012 election cycle. Instead, it was a small band of millionaires and billionaires that gave super-PACs most of their dough.

What the relatively small Reynolds American Inc. donations suggest is that corporations chose the nonprofit route and so avoided scrutiny of their political giving in today's big-money era. In this case, Reynolds' donations were disclosed only because a pesky shareholder asked for them to be. That's not the case for most corporations, whose giving remains a secret.

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