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 Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

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Report: Grand Jury Convened in California "Campaign Money Laundering" Investigation

| Thu Jul. 18, 2013 4:42 PM EDT

In April, I reported on an investigation out in California into the source of a mysterious $11 million donation that the state elections watchdog called "the largest contribution ever disclosed as campaign money laundering in California history." That $11 million donation, made in October 2012 by a little-known nonprofit called Americans for Responsible Leadership, went toward defeating Proposition 30, which would have raised taxes on wealthy Californians, and passing Proposition 32, which would have curbed unions' campaign spending. But when the California Supreme Court intervened, we learned that money didn't originate with Americans for Responsible Leadership, but rather from a different nonprofit based in Virginia called Americans for Job Security. Conservatives worried, as I reported, that the probe into the true source of the $11 million might cast unwanted light on all the dark money sloshing around conservative politics.

Now, the plot thickens. Writing for the Daily Beast, Peter Stone reports that a grand jury has been convened in California's dark-money investigation. Stone notes that the existence of a grand jury likely means the state's probe is intensifying as it tries to unmask the true source of that $11 million donation, be it a single wealthy donor, several individual donors, a company, etc.

Stone also reports that billionaire investor Charles Schwab or an entity affiliated with Schwab has received a subpoena as part of the California probe. In November 2011, Mother Jones reported that Schwab was part of a club of donors who'd given more than $1 million to groups and causes backed by Charles and David Koch. A spokesman for Schwab did not comment for Stone's story.

The stakes of California's investigation are very high, as Stone notes:

If prosecutors do move forward, their investigation could shine light on parts of the burgeoning network of conservative "social welfare" outfits that spent hundreds of millions in the last two elections. Under IRS rules, social-welfare groups can engage in political activities so long as that work is not their primary purpose, a loosely enforced rule often interpreted to mean that 49 percent of a group’s spending can go toward political work.

One of the three groups that allegedly channeled the funds to California was the Arizona-based Center to Protect Patient Rights, founded in 2009 by Koch operative Sean Noble, who has emerged in recent cycles as a big player in conservative political and fundraising circles. Noble has spoken at least twice at the billionaire brothers’ biannual conferences aimed at tapping other wealthy conservatives for their favorite projects, and he has been a key strategist at small Washington meetings with other GOP allied groups such as the Karl Rove-founded American Crossroads.

"Sean is the wizard behind the screen" for the Kochs and their network of wealthy donors, said one GOP operative familiar with Noble's political work.

In 2010 and 2012, Noble's Center appeared to act mainly as a cash conduit, shipping millions to allied conservative groups. In the 2010 cycle, for instance, it channeled almost $55 million—a sum almost identical to its revenues—to a couple dozen conservative bastions including Americans for Tax Reform and the American Future Fund, according to the group's filings with the IRS. Most of that largess went to pay for advertising backing GOP candidates or attacking Democrats.

"We had no involvement whatsoever, financial or otherwise, neither directly nor indirectly, on anything to do with Prop. 30 or Prop. 32," a spokesman for Koch Industries, Rob Tappan, said in an email. Tappan, however, indicated he spoke only for Koch and not “independent entities,” such as Noble’s Center. Asked if the Kochs had received subpoenas from the grand jury, Tappan said it was company policy not to comment on “the existence or nonexistence of investigations.” Noble did not return phone calls seeking comment.

Officials with California's Fair Political Practices Commission and the state AG's office have refused to comment on the progress of their probes. But in a brief interview in April, Ann Ravel, the chairwoman of the FPPC, said she fully intends to find out who truly was behind that $11 million. "The most important factor of any investigation of this sort is getting the names of who's contributing to campaigns in California," she said. "Because that's the law."

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Ex-Indiana Gov. Mitch Daniels Supports Free Speech—Except When He Disagrees With It

| Wed Jul. 17, 2013 12:04 PM EDT

When Mitch Daniels took the helm of Purdue University in January, after eight years as the Republican governor of Indiana, he published an "open letter to the people of Purdue" outlining his vision for the state's second-largest public college. In his letter, Daniels offered critiques and observations about the state of higher education; on the subject of "Open Inquiry," he wrote: "A university violates its special mission if it fails to protect free and open debate," adding that "the ensuring of free expression is paramount."

Now, some great muckraking by the Associated Press casts serious doubt on Daniels' commitment to protecting free speech. According to emails obtained by the AP, Daniels as governor tried to ban the works of historian Howard Zinn from the classrooms of Indiana's public colleges. When Zinn died in February 2010, Daniels wrote in an email: "The terrible anti-American academic has finally passed away." Daniel described Zinn's celebrated and widely read book A People's History of the United States as "a truly execrable, anti-factual piece of disinformation that misstates American history on every page."

Daniels goes on to write: "Can someone assure me that it is not in use anywhere in Indiana? If it is, how do we get rid of it before more young people are force-fed a totally false version of our history?"

When told the book was being taught at Indiana University in a course on American social movements, Daniel fired back: "This crap should not be accepted for any credit by the state. No student will be better taught because someone sat through this session."

More from the AP:

David Shane, a top fundraiser and state school board member, replied seven minutes later with a strategy directing Bennett and Indiana Commissioner for Higher Education Teresa Lubbers to review university courses across the state.

"Sounds like we need a cleanup of what is credit-worthy in 'professional development' and what is not. Who will take charge," Daniels replied seven minutes later.

Shane replied that a statewide review "would force to daylight a lot of excrement."

Just seven minutes later, Daniels signed off on it.

"Go for it. Disqualify propaganda and highlight (if there is any) the more useful offerings. Don't the ed schools have at least some substantive PD (professional development) courseware to upgrade knowledge of math, science, etc," Daniels wrote.

Daniels also appeared to have used his position as governor to target an academic who was critical of the state's education policies. Emails show that Daniels asked for an audit focusing on the work of Charles Little, who is on the faculty of Indiana University Purdue University–Indianapolis' School of Education and who leads the Indiana Urban Schools Association, an advocate for inner-city students, teachers, and administrators. In an April 11, 2009, email, Daniels asked for greater scrutiny of Little's program and how it spent it funds.

Reached at his office, Little said he wasn't surprised that Daniels and his colleagues targeted him. "It is worrisome that some of the people mentioned in the article are still around" in state government, Little told me.

Daniels, for his part, told the AP he had no regrets about his decision to target Howard Zinn. "We must not falsely teach American history in our schools," he responded. "We have a law requiring state textbook oversight to guard against frauds like Zinn, and it was encouraging to find that no Hoosier school district had inflicted his book on its students."

The Senate Avoids the Nuclear Option—and Saves the Filibuster

| Tue Jul. 16, 2013 12:21 PM EDT

The US Senate doesn't appear to be going "nuclear," after all.

On Tuesday morning, senators were close to a deal, brokered in part by Republican John McCain of Arizona, to prevent Majority Leader Harry Reid from changing the rules of the Senate with a simple majority vote—a tactic called the nuclear option. For years, Reid has been frustrated by Senate Republicans, who have used filibusters to block votes on 16 of President Barack Obama's nominees for executive-branch positions. (Only 20 executive-branch nominees were filibustered under all previous presidents combined.) Unless Republicans allowed votes on Tuesday on a handful of key nominees, Reid threatened to use the nuclear option to change Senate rules so that nominees could be approved with just 51 votes instead a filibuster-proof 60.

But it looks like there will be no nuclear option. Instead, Senate Republicans say they'll drop their opposition and allow votes on five nominees, including Richard Cordray to the Consumer Financial Protection Bureau (CFPB), Tom Perez to the Department of Labor, Gina McCarthy to the Environmental Protection Agency, Fred Hochberg to the Export-Import Bank, and current National Labor Relations Board chairman Mark Gaston Pearce. In exchange, Obama will toss out two other NLRB nominees, Richard Griffin and Sharon Block, and replace them with two new people. Labor unions will reportedly get a say on who Obama nominates.

On the status of deal, Reid said at noon on Tuesday: "We have a few little Is to dot and Ts to cross. Everything's doing well."

The Senate's compromise comes after days of brinkmanship, nasty rhetoric, and intense talks between Democrats and Republicans. On Monday night, all 100 members of the Senate met in the Old Senate Chamber to hash out some sort of deal to avoid using the nuclear option. No specific deal was reached then, but those talks appeared to have laid the groundwork for Tuesday's compromise. "I hope that everyone learned the lesson last night: that it sure helps to sit down and talk to each other," Reid said on Tuesday.

This is not the first time senators have threatened to go nuclear. In 2005, a group of 14 senators cut a deal to vote on several of President George W. Bush's judicial nominees after the GOP leadership threatened to use the nuclear option.

In an appearance at the left-leaning Center for American Progress think tank Monday, Reid chalked up the GOP obstruction to wanting to gum up the government while also undercutting agencies like the NLRB and the Consumer Financial Protection Bureau. "We have a situation where Republicans have created gridlock, gridlock, gridlock," he said. "And it has consequences. It's not only bad for President Obama; it's bad for the country. The status quo won't work."

With a compromise in the works, the Senate moved ahead to vote on the Obama administration's nominees. The Senate voted 71 to 29 to allow a full vote to confirm Richard Cordray, whom Obama nominated to run the Consumer Financial Protection Bureau during a recess period two years ago. That's a good sign that Cordray's nomination will be approved. It's also a tough vote for Senate Republicans, 43 of whom pledged to block any nomination—including Cordray's—to run the CFPB because they oppose how the CPFB functions.

So where does this leave the Senate? Reid may have backed down from using the nuclear option this time, but there's nothing stopping him from threatening to use it again. And if—really, when—Republicans retake control of the Senate, they can threaten to use it, too. As Ezra Klein at the Washington Post explains, "This will be the new normal."

Alison Lundergan Grimes: I Need $26-30 Million to Beat Mitch McConnell

| Mon Jul. 15, 2013 11:58 AM EDT
Secretary of State Alison Lundergan Grimes announces she will seek the Democratic nomination to challenge Sen. Mitch McConnell in 2014, during an afternoon news conference in Frankfort, Kentucky, July 1, 2013.

Alison Lundergan Grimes, the Kentucky Democrat who is challenging Senate Minority Leader Mitch McConnell in next year's election, is wasting no time beating the bushes for campaign cash. On Saturday, she "wowed" attendees at a Democratic Party private fundraising retreat on Martha's Vineyard. She'll need to wow a lot more donors, and fast: McConnell is a master fundraiser, and Grimes will need a whole lot of cash to defeat one of the most powerful Republicans in Congress.

But how much? Between $26 million and $30 million, according to a Democratic strategist who recently spoke with Grimes. Even with Election Day still 17 months away, Grimes has been busy courting DC politicos to raise funds, name-dropping the Clintons in her conversations. Grimes' father, Jerry, a former director of the Kentucky Democratic Party, is friends with Bill Clinton, who reportedly urged Grimes to run against McConnell. (Grimes spokesman Jonathan Hurst did not immediately respond to a request for comment.)

Even by the standards of today's big-money politics, Grimes' $26-30 million target is a staggering sum of money. It's almost three times more than the average winning Senate race in 2012. Only four Senate candidates—Scott Brown and Elizabeth Warren of Massachusetts, David Dewhurst of Texas, and Linda McMahon of Connecticut—raised more than $26 million during the 2012 election season. And Grimes' fundraising goal does not include outside groups—super-PACs, dark-money nonprofits, etc. Depending on how competitive the Kentucky race is, tens of millions more in outside money could pour in. 

Grimes' impressive showing at the Martha's Vineyard event could help donors and party loyalists forget her campaign's rocky start. Her kick-off event started half an hour late, with no banner or signs even mentioning the US Senate. Instead, an "Alison Lundergan Grimes: Secretary of State" banner hung behind her. A roll of toilet paper propped up one of the microphones she used make her announcement. At the time of her campaign launch, she had no website, no Facebook page, and nowhere for people to donate money.

McConnell, meanwhile, has been in campaign mode since literally the day after the 2012 elections, when he held his first 2014 fundraiser. In the second quarter of 2013, McConnell raised $2.2 million, more than any other Republican running for reelection. His campaign currently has $9.6 million in the bank.

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