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Silicon Valley’s Big-Name, Big-Money Political Ad Gambit

A deep-pocketed progressive startup with backing from some big names in Silicon Valley is behind a network of companies running thousands of targeted political ads that have veered into the bizarre and occasionally deceptive, PAY DIRT has learned.

The firm, digital-media startup MotiveAI, has created a handful of limited liability companies in Colorado through which it’s purchased ads on at least 44 different Facebook pages. Some target people based on demographics, including women, Latinos, African Americans, students, seniors, military veterans, Christians, and, for lack of a better term, bros. Others present themselves as local news outlets. Some are explicitly left-leaning, while others feign support for President Donald Trump in an effort to undercut some of his priorities.

PAY DIRT revealed that network of advertisers in last week’s issue, which examined some of its more outlandish Facebook ads. A source familiar with MotiveAI’s work has since confirmed that the firm is responsible for them.

That source described the firm’s kitchen-sink approach as a way to present its political perspective in ways that would appeal to specific subgroups that the company hopes will “make better political decisions.” MotiveAI has done no work for campaigns or political action committees, the source said, but it is unmistakably progressive and anti-Trump.

Its deep foray into political messaging on Facebook is a microcosm of a shift toward digital advertising during the 2018 election cycle, and the increasingly creative means by which political and policy groups are using digital media to craft unorthodox and often untraceable ad campaigns. That shift is also testing the limits of laws governing disclosure of the money and interests behind that advertising.

MotiveAI was formed last year by Chief Executive Dan Fletcher, a media industry veteran who previously worked at Facebook, Bloomberg, and Vice News. Since then, the firm has raised at least $11.5 million in financing, according to Securities and Exchange Commission filings, including a $10 million equity round this year.

Among MotiveAI’s financial backers is Reid Hoffman, the billionaire co-founder and executive chairman of LinkedIn, according to a source familiar with Hoffman’s involvement. (Fletcher declined to comment on the company’s finances beyond saying that his investors are “all Americans.”) Hoffman has poured money into Democratic politicking since Trump’s election, which came in spite of his more unorthodox advocacy efforts during the 2016 campaign, such as an anti-Trump card game in the mold of the popular Cards Against Humanity.

MotiveAI’s board also includes some notable tech talent. In addition to Fletcher, its directors include Gina Bianchini, the co-founder and former CEO of social-media startup Ning, and Adrian Sanders, a technology executive who, with Fletcher, co-founded the journalism crowdfunding platform Beacon Reader.

The combination of big money and tech savvy makes MotiveAI a sudden player in digital political advertising, coming as other high-dollar political groups, particularly on the Democratic side, explore what political persuasion looks like in the internet era—and how it can be more creative and effective than simply uploading traditional television ads to YouTube, or pasting the text of a direct-mail piece into a fundraising email.

But it is also testing the limits of federal campaign-finance laws that are still very much stuck in the 20th century. Facebook’s recent decision to require additional information from its political advertisers revealed the names of four LLCs that MotiveAI has used to mount its advertising campaign. But the involvement of MotiveAI itself is not disclosed, on Facebook or anywhere else, in part because current election laws have weaker disclosure requirements for digital ads than those run on TV and radio, or through direct mail and phone-banking.

“This is a good example of the digital loopholes in our campaign-finance laws,” said Brendan Fischer, the director of federal and Federal Election Commission reform programs at the Campaign Legal Center, an ethics watchdog group. He pointed to MotiveAI ads attacking Republican Senate candidates in competitive states such as North Dakota and Tennessee.

“These ads could be subject to [Federal Election Commission] reporting as ‘electioneering communications’ if they were run on TV or radio, but not when run online,” Fischer explained. “An electioneering communication is defined only as a broadcast ad naming a candidate and run shortly before an election. This means that a political ad subject to legal transparency requirements when aired on TV can remain shrouded in secrecy when that same ad is run online.”

The definition of “electioneering communication” was codified by the McCain-Feingold law of 2002. That’s 16 years of rapid innovation for which lawmakers have yet to account. Until they do, the public generally won’t know if the news sites popping up on their feeds are the work of partisans seeking to sway their vote.

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How Both Parties’ Top Super PACs Secretly Bankroll Attack Ads

A few weeks before Arizona Republicans went to the polls in the state’s U.S. Senate primary, a new super PAC began running a series of digital ads attacking conservative candidate Kelli Ward.

“Kelli Ward called for an ‘incremental’ approach to abortion,” Arizonans for Life warned in the ad, which popped up in Facebook feeds in the state from Aug. 7 through Aug. 25, three days before the primary. Ward, the ad continued, “said abortion has its ‘benefits’ and government should back off. ‘Morally incoherent’ Kelli Ward took Planned Parenthood’s side. We can’t take hers.”

According to Facebook ad data, between 325,000 and 870,000 Arizonans saw the ad. But at the time, the people behind it were a complete mystery. Only until after primary votes were cast, and Ward lost handsomely to Rep. Martha McSally, did we find out that Arizonans for Life was entirely bankrolled by a single group: the Senate Leadership Fund, a high-dollar super PAC allied with Senate Majority Leader Mitch McConnell.

The rationale for the surreptitious ad campaign is clear: Ward was seen as a less electable general-election candidate than Ward, with her penchant for conspiracy theories and the pot shots she took at the late Sen. John McCain just hours after his death. But SLF made sure to time its contributions to the group so that they wouldn’t be disclosed before the primary.

SLF employed the same strategy in West Virginia in a successful attempt to knock off disgraced coal baron Don Blankenship, who, for the effort, dubbed McConnell “Cocaine Mitch.” Only after that state’s Republican Senate primary was it revealed that Mountain Families PAC, a super PAC that spent $1.4 million attacking Blankenship, was wholly funded by SLF.

On the same day that Mountain Families PAC filed its first financial report disclosing those contributions, it closed shop, simultaneously filing termination paperwork with the FEC. Arizonans for Life also shuttered on the same day that it was finally forced to out SLF’s underwriting.

Republicans weren’t the only ones employing this tactic in Arizona. A Democratic group called Red and Gold dropped more than $1.6 million attacking McSally in the runup to the state’s Aug. 28 primary. Nearly a month later, when the quarterly FEC deadline hit, the group revealed that it was entirely funded by Senate Majority PAC, SLF’s Democratic counterpart.

These maneuvers are possible due to the FEC’s filing schedule, which can allow high dollar super PACs to jump into a race late in the contest and spend significant sums before disclosing any contributors. Call it a loophole or a quirk or simple a political fact of life—the biggest spenders in politics right now are exploiting it to full effect.

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From Staffer to Congresswoman, by Way of Qatar?

Elizabeth Heng is trying to go from congressional staffer to congresswoman. But in the few months between her prior stint on the Hill and the launch of her campaign for California’s 16th Congressional District, Heng took a quick spin through Washington’s infamous revolving door.

In September 2017, Heng resigned from her position as the chief of outreach and protocol for the House Foreign Affairs Committee. Shortly thereafter, she started working on behalf of the Qatari embassy in Washington.

Heng did so by way of Stonington Strategies, the lobbying firm run by Nick Muzin, a former aide to Sens. Ted Cruz and Tim Scott who went on to work for the Trump presidential campaign before landing on K Street last year. In May, Stonington filed a periodic “supplemental” statement with the Department of Justice disclosing its work for the Qatari embassy. In that filing, the firm reported paying Heng $10,000 in December, itemized as "fees for assisting with travel logistics and administrative work.”

Neither Stonington nor the Heng campaign responded to requests for additional information on what, precisely, that work entailed.

Heng’s campaign has garnered significant attention on the right. Wall Street Journal columnist William McGurn suggested this month that she could be “an Ocasio-Cortez for the GOP.” Heng, whose parents emigrated from Cambodia, became a rallying cry for conservatives who accuse social-media companies of ideologically stilted censorship when Twitter and Facebook blocked a campaign ad that featured graphic images of the Cambodian genocide.

Heng also has impressive foreign-policy credentials for a young Hill aide. In her perch at the Foreign Affairs Committee, she served as a gatekeeper between Rep. Ed Royce (R-CA), the committee’s chairman, and the numerous heads of state and foreign diplomats with whom Royce frequently met.

That sort of experience—and the connections that come with it—are naturally valuable to representatives of foreign governments seeking to sway U.S. policy, as Qatar did through Stonington until the firm terminated its contract in June. For Heng, those connections appear to have paid off already.

Indeed, in March, about a month after Heng declared her candidacy, Muzin donated the legal maximum to her campaign.

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