Exclusive: GOP Candidate Reveals Possibly Illegal Coordination With NRA
Before the National Rifle Association dropped hundreds of thousands of dollars to try to flip a competitive, Democratic-held Senate seat, the gun-rights group’s chief lobbyist apparently gave the race’s Republican challenger a heads-up.
Chris Cox, the top political strategist for the NRA’s Institute for Legislative Action (NRA-ILA), assured Montana Republican Matt Rosendale that the group would spend heavily to support his bid to unseat Sen. Jon Tester, Rosendale told attendees at a July event in Washington.
PAY DIRT exclusively obtained audio of Rosendale’s remarks, which good-government groups say raise serious questions of potentially illicit coordination between Rosendale and an independent political group supporting his campaign.
“I fully expect the NRA is going to come in… in August sometime,” Rosendale said in response to a question about independent political spenders in the race. “The Supreme Court confirmations are big. That’s what sent the NRA over the line. Because in ’12, with [Republican Senate nominee Denny Rehberg] they stayed out, they stayed out of Montana. But Chris Cox told me, he’s like, ‘We’re going to be in this race.’”
Rosendale was slightly off in terms of timing, but the NRA did come through as Cox apparently promised. Early this month, the group spent more than $400,000 on ads hitting Tester over the precise issue that Rosendale mentioned—the senator’s votes on Supreme Court nominations.
Rosendale’s remarks are potentially problematic, as the NRA-ILA, a 501(c)(4) “dark-money” group, is legally barred from coordinating its ad buys with a federal campaign. As explained by nonprofit tax law attorney Holly Schadler, illegal coordination may occur “if the organization has substantial discussions with the campaign about an expenditure, or if the organization informs the campaign about a planned communication related to the campaign and the campaign signals its agreement with the suggestion to make that communication.”
Brendan Fischer, the director of federal and Federal Election Commission reform programs for the Campaign Legal Center, said Rosendale’s remarks, together with the eventual ad campaign he alluded to, might satisfy the “three-pronged” legal test for impermissible coordination. The three prongs are payment, content, and conduct.
“The payment prong is satisfied because the ads were paid for by somebody other than Rosendale; the content prong is satisfied because the ads expressly advocate against the election of Rosendale’s opponent; and the conduct prong can be satisfied by Rosendale assenting to the request or suggestion of the entity paying for the ad: the NRA,” Fischer said.
An investigation into potential wrongdoing would likely hinge on the question of whether Rosendale encouraged or otherwise signed off on Cox’s pledge to get involved in the race. Rosendale did not recount his reply to Cox in response to the questioner, meaning he could claim that no such assent was offered.
Neither the Rosendale campaign nor the NRA-ILA responded to requests for comment.
Fischer’s group has also filed an FEC complaint alleging the NRA is illegally coordinating with a number of federal campaigns through the use of a common vendor. NRA-ILA’s independent expenditures have been routed through a company called Starboard Strategic. That company appears to be a clone of another vendor, OnMessage, which works with the same campaigns that the NRA is—ostensibly, independently—supporting with huge ad buys.
CLC alleged that OnMessage, which shares staff and office space with Starboard Strategic, was using insight gleaned from media-buying work for the candidates’ campaigns to inform the NRA’s separate advertising strategies in each race.
Like other senators in competitive races this year, Rosendale’s campaign has paid OnMessage for media services, with payments totaling about $445,000. The NRA’s expenditures for its anti-Tester ads, notably, were paid to Starboard Strategic.
GOP Super PAC Discloses Source of (Some) Shell-Company Money
A few weeks ago, PAY DIRT noted a pair of suspicious contributions by a pair of LLCs to DefendArizona, a super PAC supporting Rep. Martha McSally’s (R-AZ) Senate bid. Both Highway 76 LLC and Blue Magnolia Investments LLC donated $100,000 to the group. Both were also incorporated in Delaware, and both use the same registered-agent service to mask the people or entities behind them.
The Campaign Legal Center filed an FEC complaint last month requesting a probe into whether the two companies were illegal “conduits” used to mask the real identities of two of DefendArizona’s largest donors. The group cited the timing of their contributions—so close to their incorporation dates that it seemed questionable that either LLC had done sufficient business to be making six-figure political contributions.
We now know the identity of one of the individual donors behind at least one of those contributions. DefendArizona amended an FEC filing this week—after McSally prevailed in the state’s Republican senate primary—to note that Blue Magnolia’s donation had actually come from Larry Van Tuyl, an Arizona native and the chairman of investment giant Berkshire Hathaway’s automotive division.
But DefendArizona did not amend the source of its Highway 76 LLC donation. That company has also donated $250,000 to the Republican Governors Association. According to that group’s filing with the IRS, the contribution came on the same day as its donation to DefendArizona.
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New Breadcrumbs on Dark-Money-Funded Group Spending Big in Statehouse Races
A few weeks ago, PAYDIRT attempted to divine what we could about the Conservative Alliance PAC (CAPAC) and its sole funder, the dark-money Prosperity Alliance. The PAC has been highly active in state legislative races in Ohio and Oklahoma, using money provided by the dark-money group in a pattern that suggested a close relationship between the two, and potentially an effort to mask the identities of CAPAC’s contributors.
We’ve learned a bit more about the two groups since then, and they further suggest a concerted effort to structure their political spending in order to funnel undisclosed, tax-exempt funds into political races.
The key bit of new information is the identity of at least one of the operatives involved in managing CAPAC. Joel Riter, a former aide to Ohio State Treasurer Josh Mandel, was the CAPAC point of contact for a source who’s worked with the super PAC. Riter did not respond to questions about the group. But he has been involved with other dark-money organizations, or dark-money-funded super PACs, in the Buckeye State.
Meanwhile, in Oklahoma, CAPAC has routed much of its money through a pair of vendors linked to a major political money scandal in the state. Those vendors are associated with Republican operatives Fount Holland and Trebor Worthen, who previously worked together at a now-defunct firm, AH Strategies, at the center of a felony campaign-finance case brought by the state against Joy Hofmeister, the state’s schools superintendent.
Prosecutors in that case presented reams of evidence, gleaned from another state political operative’s seized cellphone, suggesting that AH Strategies was helping to facilitate illegal independent expenditures in support of Hofmeister’s campaign. Prosecutors dropped all the charges in that case last year pending further investigation. The Oklahoma County District Attorney’s Office, which handled the case, did not respond to questions about the status of its investigation.
There’s no indication that Holland or Worthen are engaged in similar conduct in CAPAC’s case. But both are also doing business for candidates that the PAC is simultaneously spending money to support. For instance, Worthen’s Advocacy Insights and Holland’s Campaign Advocacy Management Professionals both counted statehouse candidate Roxanne Pollard as a client. CAPAC also worked to elect Pollard, even at one point using the PAC’s website solely to promote her candidacy.
As long as vendors keep firewalls in place between their work for candidates and independent groups, they can do both simultaneously, even on behalf of the same client. There’s no evidence that Worthen and Holland didn’t do so in this case. But we’ll keep tracking these groups as more information emerges.
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