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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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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Former IRS Chief: "I Certainly Am Not Personally Responsible" for Tea Party Scandal

| Tue May. 21, 2013 2:00 PM PDT
Former IRS Commissioner Doug Shulman.

Former IRS Commissioner Douglas Shulman, a George W. Bush appointee who ran the tax agency when low-level employees wrongly singled out conservative groups for special scrutiny, testified on Tuesday before Congress for the first time since the scandal erupted on May 10. Senators hoping for new revelations or a mea culpa from Shulman, however, were left wanting. He said little about why IRS staffers targeted tea party groups and others for some 18 months, and he repeatedly downplayed his own role.

But one thing was clear from the hearing: The fallout from the IRS' tea party debacle isn't over, and its implications may spill over into campaign finance rules. J. Russell George, the Treasury Department inspector general who investigated the IRS' actions, said his office will be auditing how the IRS oversees politically active nonprofit groups and presumably how the agency determines which nonprofits are too political. That's potentially big news for the money-in-politics world: Nonprofits spent hundreds of millions of dollars during the 2012 campaign, and as the IRS scandal has further revealed, the agency's process for determining how much politicking by a group runs afoul of regulations is vague and confusing.

White House Learned of IRS Tea Party Probe Early—But Didn't Tell Obama

| Tue May. 21, 2013 7:23 AM PDT

President Obama's chief of staff and the White House's top lawyer got wind of an inspector general's investigation into the IRS' singling out of tea partiers and conservative groups several weeks before the report went public. But those officials, according to press secretary Jay Carney, did not tell Obama. The president says he learned about the IRS' screw-up only after an agency director apologized on Friday, May 10, for employees having targeted conservative groups—an apology that went viral.

Carney told reporters Monday it was "appropriate" that Obama wasn't told of the damning IG report beforehand. And the president, he said, wasn't angry to not have been given early notice. "He believes it's entirely appropriate that, you know, some matters are not appropriate to convey to him and this is one of them," Carney said.

As we've reported, a Treasury Department inspector general, at the behest of angry members of Congress, spent nine months probing whether IRS staffers targeted tea party groups and other right-leaning conservative outfits who had applied for tax-exempt status under the 501(c)(4) section of the tax code. Although staffers did in fact zero in on conservative groups, the IG's report concluded that political bias did not play a role. Instead, staffers used "inappropriate criteria"—catchwords such as "tea party," "patriot," or "9/12 Project" (the latter a creation of conservative talk show host Glenn Beck)—to look for groups that might've been too involved in politics. (Groups that file their taxes under 501(c)(4) can dabble in politics, but it can't be their "primary activity.") IRS employees got away with this due to "insufficient oversight" by the higher-ups in Washington, the report found.

Testifying before Congress last week, Steven Miller, the acting IRS commissioner who will soon resign as a result of the agency's tea party debacle, echoed the IG's findings. He said IRS employees made "foolish mistakes" and that the agency's behavior was "obnoxious." But those employees did not have a grudge against conservative groups. Their errors, Miller said, "were made by people trying to be more efficient in their workload selection."

"What did they know" and "when did they know it" are two big questions looming over the IRS scandal. Here's what we know right now: Almost a month before IG's report came out last Tuesday, a staffer in the office of White House counsel Kathryn Ruemmler learned of the report. Ruemmler herself was briefed on April 24. Soon after, she informed Denis McDonough, Obama's chief of staff. Carney said the president was not told of the investigation because there was nothing to be done about it. Also the White House did not want to appear to be interfering with an inspector general's report on such a sensitive issue. There is no evidence yet that Obama or his top aides knew about the investigation before this year.

Here is the IG's report:

 
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