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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Poof! The IRS Scandal Evaporates

| Tue Jun. 25, 2013 11:30 AM EDT

Republicans on Capitol Hill have sought to turn the IRS mess into a full-fledged political scandal, charging that President Obama or his White House or at least liberal IRS staffers deliberately tried to punish tea partiers and other conservative outfits. But Rep. Darrell Issa (R-Calif.) & Co. have come up empty-handed. A Treasury Department inspector general found no evidence of political influence or bias. The head of the IRS division in question in Cincinnati identified himself to investigators as a "conservative Republican" and said politics played no role in their vetting decisions. And now it turns out, as the Associated Press reported, the IRS also singled out for extra scrutiny groups applying for nonprofit status with "progressive, "occupy," and "Israel" in their name. That is, liberal outfits were targeted, too. Oops.

Democrats on the House Ways and Means Committee have obtained a list of group names IRS staffers used when applying extra scrutiny to applications for nonprofit status. This list of words to look out for also included "Medical Marijuana," "Occupied Territory Advocacy," "Healthcare legislation," "Paying National Debt," and "Green Energy Organizations." That AP reports that the IRS used those assorted terms from August 2010 through April 2013 to target applications for special review. It is unclear how many progressive or Occupy groups received additional attention from the IRS, or if those groups faced the sort of delays experienced by dozens of conservative groups did.

But this list shows that IRS employees weren't only looking for conservative buzz words as they examined political nonprofit groups; they were on the watch for groups of all political stripes.

This IRS affair began in May when a top agency official—who was later put on leave—apologized for her staffers having targeted tea party groups. The revelation sent Washington into a frenzy, leading to a spate of hearings, hand-wringing by congressional Democrats and Republicans, and the resignation of then-acting IRS commissioner Steven Miller.

Miller's replacement, current acting commissioner Danny Werfel, ordered a halt to the use of these additional watchwords, which were found on so-called Be on the Lookout, or BOLO, lists. (IRS officials had previously ordered their underlings to stop using "tea party" and "patriots.") "There was a wide-ranging set of categories and cases that spanned a broad spectrum" on the BOLO lists, Werfel recently told reporters. Werfel described some of the words on those lists as "inappropriate."

Not surprisingly, Democrats and Republicans in Congress are fighting over the significance of the latest revelations. From the AP:

Rep. Sander Levin of Michigan, top Democrat on the ways and means panel, said he was writing a letter to J. Russell George, the Treasury Department inspector general whose audit in May detailed IRS targeting of conservatives, asking why his report did not mention other groups that were targeted.

"The audit served as the basis and impetus for a wide range of congressional investigations and this new information shows that the foundation of those investigations is flawed in a fundamental way,’’ Levin said.

Republicans said there was a distinction. A statement by the GOP staff of House ways and means said, "It is one thing to flag a group, it is quite another to repeatedly target and abuse conservative groups."

George’s report criticized the IRS for using "inappropriate criteria" to identify tea party and other conservative groups. It did not mention more liberal organizations, but in response to questions from lawmakers at congressional hearings, George said he had recently found other lists that raised concerns about other "political factors" he did not specify.

An IRS spokeswoman said that George, the Treasury Department inspector general, is reviewing how much the IRS scrutinized other groups.

So is it case closed on the IRS debacle? Not yet. The agency still needs to explain why its staffers singled out groups in this way, and how it further intends to streamline the vetting process. But is this a liberal political conspiracy? Sure doesn't look like it.

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6 Mind-Blowing Stats on How 1 Percent of the 1 Percent Now Dominate Our Elections

| Mon Jun. 24, 2013 3:13 PM EDT

Here's a statistic that should jolt you awake like black coffee with three shots of espresso dropped in: In the 2012 election cycle, 28 percent of all disclosed donations—that's $1.68 billion—came from just 31,385 people. Think of them as the 1 percenters of the 1 percent, the elite of the elite, the wealthiest of the wealthy.

That's the blockbuster finding in an eye-popping new report by the Sunlight Foundation, a nonpartisan transparency advocate. The report's author, Lee Drutman, calls the 1 percent of the 1 percent "an elite class that increasingly serves as the gatekeepers of public office in the United States." This rarefied club of donors, Drutman found, worked in high-ranking corporate positions (often in finance or law). They're clustered in New York City and Washington, DC. Most are men. You might've heard of some of them: casino mogul Sheldon Adelson, New York City Mayor Michael Bloomberg, Texas waste tycoon Harold Simmons, Hollywood executive Jeffrey Katzenberg

Those are a few of the takeaways from Sunlight's report. Here are six more statistics (including charts) giving you what you need to know about the wealthy donors who dominate the political money game—and the lawmakers who rely on them.

(1) The median donation from the 1 percent of the 1 percent was $26,584. As the chart below shows, that's more than half the median family income in America.

Economic Policy Institute

(2) The 28.1 percent of total money from the 1 percent of the 1 percent is the most in modern history. It was 21.8 percent in 2006, and 20.5 percent in 2010.

Sunlight Foundation

(3) Megadonors are very partisan. Four out of five 1-percent-of-the-1-percent donors gave all of their money to one party or the other.

Sunlight Foundation

(4) Every single member of the House or Senate who won an election in 2012 received money from the 1 percent of the 1 percent.

Orham Cam/Shutterstock

(5) For the 2012 elections, winning House members raised on average $1.64 million, or about $2,250 per day, during the two-year cycle. The average winning senator raised even more: $10.3 million, or $14,125 per day.

Dawid Konopka/Shutterstock

(6) Of the 435 House members elected last year, 372—more than 85 percent—received more from the 1 percent of the 1 percent than they did from every single small donor combined.

Sunlight Foundation

So what are we to make of the rise of the 1 percent of the 1 percent? Drutman makes a point similar to what I reported in my recent profile of Democratic kingmaker Jeffrey Katzenberg: We're living in an era when megadonors exert control over who runs for office, who gets elected, and what politicians say and do. "And in an era of unlimited campaign contributions," Drutman writes, "the power of the 1 percent of the 1 percent only stands to grow with each passing year."

Obama Finally—Finally!—Picks 2 Nominees for the Federal Election Commission

| Mon Jun. 24, 2013 6:00 AM EDT

After years of nudging and complaining from good-government types, President Obama finally has begun the process of making some changes over at the Federal Election Commission, the nation's beleaguered campaign watchdog. Last week, Obama nominated Ann Ravel, the feisty chairwoman of California's Fair Political Practices Commission, and Lee Goodman, a DC-based attorney at the firm LeClairRyan.

On its face, this is good news. All five commissioners currently at the FEC (there are usually six; one commissioner, Cynthia Bauerly, resigned in February) are working past their term's expiration date, because Obama and the Congress have not put forward any new nominees. The entire leadership of the FEC, in other words, should've been replaced months or years ago. Ravel and Goodman must still be nominated by the Senate, but if confirmed, they would be the first new commissioners to arrive at the FEC since Obama became president.

Progressive groups that oppose super-PACs and want less big money in politics cheered Obama's nominations but urged him to do more to reshuffle the FEC's lineup. "The process of fixing the FEC needs to begin with President Obama nominating and the Senate confirming a full, new complement of six commissioners," Democracy 21, a pro-regulation group, said in a statement.

The FEC is not only dogged by commissioners serving on borrowed time. Critics of the commission—which, by design, features six commissioners, usually three left-leaning and three right-leaning—say it is Exhibit A in regulatory gridlock. Here's what I wrote in 2011 about the FEC:

…During the George W. Bush era, GOP leaders packed the commission with a trio of conservative ideologues, and today the FEC epitomizes gridlock. Between 2003 and 2008, the commission deadlocked on about 1 percent of its enforcement actions, according to an analysis by Public Citizen (PDF); the numbers spiked to 16 percent and 11 percent in 2009 and 2010. Scott Thomas, a former Democratic FEC chairman, says the GOP members increasingly clash even with the commission's own legal staff. "For almost the entire history of the FEC, the commissioners were open to receiving recommendations from the staff," Thomas says. "Now they are being stopped cold by those three commissioners." The leader of the FEC's conservative clique is Donald McGahn, a shaggy-haired attorney (known to play the guitar while prepping for case rulings) who opposes just about all campaign-finance laws. He previously was counsel to former House Majority Leader Tom DeLay (R-Texas), who was convicted by a Texas jury last fall for laundering corporate donations. (McGahn did not respond to a request for comment.)

So what do we know about Obama's nominees?

In Ravel, left-leaning groups have an ally. As the head of California's election watchdog, the FPPC, she made a name for herself by aggressively investigating the source(s) of $11 million in secret donations made to influence two contentious ballot propositions in 2012. (That investigation remains underway.) As I reported, this particular FPPC probe, prompted by Ravel, is perhaps the most worrisome to conservatives because it could lift the veil on the web of nonprofit groups and donors shuffling dark money around the country. "This case has got very, very deep and significant implications," one conservative lobbyist told me.

Goodman, on the other hand, comes at the money-in-politics issue from a different angle. A supporter of the Supreme Court's 2010 Citizens United decision, Goodman recently argued—and ultimately lost—a case named United States v. Danielczyk that would've reversed the long-standing ban on corporations giving money directly to candidates.

A mighty high hurdle awaits both Ravel and Goodman: the Senate. Sen. Mitch McConnell (R-Ky.), the minority leader, is a fierce enemy of campaign finance laws, and it's no secret that the road to confirmation for any FEC nominee runs through him. If he opts not to block either Ravel or Goodman, then there is hope for fresh faces at the FEC. If he does, it could be back to square one.

Soros-Backed Super-PAC to New York Pols: Pass Reform or We're Taking You Down

| Tue Jun. 18, 2013 6:13 PM EDT
The New York State Capitol in Albany.

The deadline draws closer by the hour. In New York, the band of good-government reformers, labor unions, enviros, community organizers, religious leaders, and more have until Thursday night, when the current legislative session ends, to press state lawmakers to pass legislation combating political corruption and kickstarting a public financing program for statewide elections. Standing in their way: The odd coalition of breakaway Democrats and Republicans who control the state Senate and who are blocking the public financing bill, which passed the state Assembly earlier this year and is backed by Gov. Andrew Cuomo.

Friends of Democracy, the super-PAC run by political operatives Jonathan Soros and David Donnelly, is one of the most aggressive backers of public financing in New York State. Soros, the son of liberal financier and mega-donor George Soros, and Donnelly see New York as the front line in the post-Citizens United battle against big-money politics. In an interview on Tuesday, Donnelly had a cut-and-dry message for the independent Democrats, who broke away from the traditional Democratic caucus to form a new leadership coalition, and the Republican legislators who are denying a vote on public financing: Support reform, or we'll fight to replace you.

Donnelly says public financing should be a no-brainer for independent Democrats and Republicans given the public support for the issue. According to a recent Siena College poll (PDF), 61 percent of New Yorkers say they support statewide public financing. Indeed, in five Siena polls dating back to August 2012, a majority of New Yorkers backed a public financing program. The way it's proposed, a statewide public financing program would match each dollar of donations up to $175 with $6 in state money. The goal is to nudge political candidates into courting lots of less-wealthy donors instead of a few very wealthy ones.

"It's pretty painfully clear that if this leadership structure, the [Independent Democratic Conference] and Republicans together, doesn't produce on behalf of the citizens of the state a public financing law that addresses corruption, there needs to be a leadership structure that will do that," Donnelly says. "That means electing people who will lead the Senate in a way that moves that legislation. It's not so much of a threat as the reality of what we're going to have to do."

Donnelly declined to say which state senators Friends of Democracy would target. (Nor would he say how much Friends of Democracy has spent so far on New York's public financing fight.) "I'm not about one senator or not about [independent Democratic senators] Diane Savino or Jeff Klein or any of these other Republican senators," he says. "I'm agnostic about how we go about doing it. It's a numbers game; we need to take out those numbers."

Donnelly says he still holds out hope that the state Senate will pass a public financing bill before heading home for the summer. But if the state Senate fails, Friends of Democracy won't walk away from the issue. In addition to targeting anti-reform senators, Donnelly explains, the super-PAC will continue pushing for a bill in the legislature, possibly during a special session or when lawmakers return later this year to work on a state budget. "If the senators can do it under the current leadership, great. Do it by Thursday, do it in a special session, during the budget session, great," he says. "We're not going away."

This Is What a Multimillionaire Calling In His Chits Looks Like

| Fri Jun. 14, 2013 11:19 AM EDT

Art Pope is the conservative mega-donor in North Carolina whose millions helped usher in Republican majorities in both chambers of the state legislature in 2010, and who dropped millions more in 2012 to elect Republican Gov. Pat McGrory. Perhaps to say thanks, McGrory promptly named Pope, a former board member of the Koch-funded Americans for Prosperity group, the state's new budget director.

One of Pope's pet causes has been killing North Carolina's public funding program for judicial elections, an aim of his when he served in the state legislature. The NC Public Campaign Fund, as it's known, provides judicial candidates with taxpayer money to fund their campaigns so long as they collect 350 or more small donations from registered voters and also abide by campaign spending limits. The program is popular: Since its launch in 2004, 80 percent of judicial candidates in contested race for state Supreme Court and North Carolina Court of Appeals have used it. In May, 14 of the 15 judges on Court of Appeals, judges who represent both parties, urged state lawmakers to preserve the program. "Our current system of nonpartisan judicial elections supplemented by public financing is an effective and valuable tool for protecting public confidence in the impartiality and independence of the judiciary," the judges said.

North Carolina's judicial public financing program gets its money from a $3 check box on state tax forms and a $50 annual fee paid by attorneys. The budget proposed by North Carolina Republicans would suck all the money out of the elections fund and eliminate its funding sources, a death blow to the program. But as Chris Kromm of Facing South writes, state Rep. Jonathan Jordan, a Republican, had a fix. He offered a budget amendment that would preserve the $50 attorney fee while still sucking out all the fund's money and eliminating the taxpayer check-box. Although Jordan's amendment would hurt the fund in the short term, the attorneys fees would replenish it over time. Other Republicans liked this idea.

That's when Art Pope called in his chits:

Soon after Jordan's amendment was filed the next day, the multimillionaire GOP donor and budget director for Republican Gov. Pat McCrory made a rare visit to the General Assembly and took Jordan aside. When the impromptu meeting with Pope ended, Jordan made an abrupt U-turn and dropped the amendment.

The amendment died—and with it chances of saving North Carolina's pioneering judicial program.

Art Pope took a direct role in killing the landmark election reform measure even though his presence as budget director wasn't needed, since Jordan's amendment was revenue-neutral. His involvement highlights the unique power Pope holds as both a top campaign donor to state lawmakers and the highest ranking member of McCrory's cabinet.

It also marks the culmination of a more than decade-long crusade by Pope to dismantle judicial public financing and other reforms that aim to curb the clout of big donors like himself in North Carolina politics.

Why, you might ask, would Jordan so easily abandon his amendment? Well, the money trail is a good place to start:

When Jordan first ran for office in 2010, he was one of two dozen Republicans that benefited from a flood of money Pope poured into elections, helping the GOP capture the state legislature.

That year, Jordan received $16,000 in campaign contributions from Pope and his close family, the maximum allowed by law. On top of that, three groups backed by Pope—Americans for Prosperity, Civitas Action, and Real Jobs NC—shoveled more than $91,500 into election spending on Jordan's behalf, bringing Pope's total investment in launching Jordan's legislative career to more than $107,000.

But Pope's connection to Rep. Jordan goes back even further. In the late 1990s, Jordan spent two years as research director at the John Locke Foundation, one of a network of conservative groups in North Carolina largely funded by Art Pope's family foundation.

In an email to the News and Observer newspaper, Pope declined to comment on his talk with Rep. Jordan. "Of course the governor's recommended budget proposed to stop giving taxpayer dollars to political campaigns," Pope said. "That position has not changed, and I have stated this to the legislators, members of the public, and organizations such as Common Cause when they have asked about the issue."

Episodes like these are what make North Carolina such a fascinating case study. On the one hand, you have Pope, an ideologue who gave handsomely to conservative causes for decades and now controls North Carolina's budget. On the other, there is a progressive groundswell pushing back against Pope, McGrory, and the Republican majorities in the legislature. But in this case, the imminent death of North Carolina's judicial funding program shows just how much clout a single donor can have.

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