“I think the play here is to set up an independent expenditure committee for your re-election, specifically with a goal of raising two million or something. . . . the beauty of the IE, it’s a 501(c)(4) corporate donations are allowed and they’re unlimited. . . . I can put in a million or two or whatever, I can be the sole donor.”
These were the words that helped convict North Carolina billionaire Greg Lindberg of using dark money to bribe North Carolina insurance commissioner Mike Causey.
Lindberg has an insurance business in North Carolina and one of the state regulators in Causey’s employ was aggressively enforcing laws that Lindberg would rather evade. The deal was this: Causey removes the regulator and substitutes in someone approved by Lindberg, who then sets up and funds a 501(c)(4) to support Causey’s re-election. The plot also ensnared an associate of Lindberg and a former congressman and state Republican Party chair. (But not Causey, who cooperated and was wearing a wire).
What is to prevent something like this happening in Massachusetts, the land of Brian Joyce and Barry Locke? Not much.
In 2016, three of four ballot questions were run on dark money provided by 501(c)(4)s. On Question 1 favoring a slots parlor in Revere the 501(c)(4)s hid behind a ballot committee named the Horse Racing Jobs and Education Committee. It was fueled by foreign money including from figures that an investigation in Maine determined had criminal ties. Question 2 on charter schools was largely run with dark money from 501(c)(4) Families for Excellent Schools and from 501(c)(3) Families for Excellent Schools Inc. After the election FES was forced to pay a record civil forfeiture by the Office of Campaign and Political Finance and required to disclose its true donors. FES later collapsed in a mixture of corruption and #MeToo scandal. Later Strong Economy for Growth settled with OCPF, after spending nearly a million dollars on Question 2 and opposing Question 4 on marijuana legalization.
A May 26, 2016 memorandum showed efforts to set up a meeting on charters involving Governor Baker and FES’s dark money donors behind Question 2. The fund raiser for Strong Economy for Growth was John Cook of JCI consulting, who is also the governor’s chief fund raiser. I raise this not to malign any individual but to point out that in the dark money world politicians and their staff know who the real donors are; only the public is kept in the dark.
In Federalist 10 James Madison wrote: “Enlightened statesmen will not always be at the helm.” Neither will honest public officials always be at the helm.
Now let’s turn to why we should care not only about the use of 501(c)(4)s but 501(c)(3)s. A 501(c)(4) can be deployed in political campaigns and 501(c)(3)s cannot. But there are plenty of things a 501(c)(3) can do such as publish reports, organize rallies, run advertisements, send emails to legislators, hire professional lobbyists, bus in constituents for lobby days at the State House—all things the 501(c)(3) Families for Excellent Schools Inc. did from 2014 through July 2016, when the ballot campaign started.
There are similar activities being conducted today in a coordinated effort being directed from Bentonville, Arkansas, headquarters of WalMart and the family heirs to the Walton fortune—America’s richest family. The Waltons fund several interconnected privatization outfits in the state, their very own Massachusetts political team. But even today a Boston Globe story quoting Keri Rodrigues, the president of Walton front Massachusetts Parents United ($866,000 in 2017-2018) fails to identify the Walton ownership. (Rodrigues formerly was state director of FES).
As our attention is diverted by coronavirus the iconic Massachusetts supermarket Market Basket is promising to maintain service to its customers. Now let’s suppose that outside businessmen attempted a hostile takeover of Market Basket, and let’s call these outside businessmen WalMart of Arkansas. Do you think that fact might be reported by local media, or ignored?
Yet an attempted takeover of public education policy by private interests, a takeover that I might add is now in at least its eleventh year in Massachusetts, is almost never mentioned. Why?
“In the darkness of secrecy, sinister interest and evil in every shape, have full swing. . . . Publicity is the very soul of justice.”—Jeremy Bentham
[Full disclosure: as an educator in the UMass system, I am a union member. I write about dark money, not education.]