Republican groups seem to be steering clear of the New Jersey Senate race, where Democrat Cory Booker is the heavy favorite to win the Oct. 16 special election.
That is, except for one newly created super PAC with particularly shady ties.
The American Commitment Action Fund has promised to spend $100,000 attacking Booker, according to previous news reports. Thus far, it has spent $44,230 on online advertising, production and its website. But behind this modest spending are lucrative connections to oil tycoons Charles and David Koch, their associates, and a case of millions of dollars gone missing.
Since the Supreme Court’s ruling in Citizens United in January 2010 opened the floodgates of unlimited, third-party spending in elections, so-called super PACs have sprung up in races across the country to elect or defeat a candidate -- a phenomenon that is increasingly common on both sides of the aisle. It’s American Commitment Action Fund’s hidden connections that make it stand out.
It’s unclear why the group is putting money into a race where Booker is a likely shoo-in, but the super PAC’s president, Phil Kerpen, and the Republican running against Booker, Steve Lonegan, do have a former employer in common: Both men spent the past several years working for the conservative advocacy group Americans for Prosperity, a Koch brothers creation. After serving as mayor of the small town of Bogota, Lonegan joined AFP as the director of the New Jersey chapter in 2006. He resigned earlier this year to run for the Senate.
“It’s not surprising [Lonegan’s] old colleagues would be supporting him,” said Sunlight Foundation editorial director Bill Allison, noting campaign donations from former business associates are common in politics.
Kerpen is a former vice president for policy at AFP. Stephen Manfredi, a Washington, D.C., communications consultant who returned the International Business Times’ calls to the super PAC, could not say whether Lonegan and Kerpen knew each other personally through AFP. Kerpen left AFP in 2012 to run American Commitment, a nonprofit 501(c)(4) organization and the sister group to the super PAC now working to defeat Booker.
The American Commitment nonprofit is where the story gets interesting. Kerpen’s group is one of several conservative organizations, all connected with the billionaire Koch brothers, that for several years have been passing money between each other -- with millions of dollars disappearing in the process. Because these groups are nonprofit “social welfare” groups under section 501(c)(4) of the tax code, they do not have to reveal their donors, which makes tracking how the money changes hands very difficult.
According to a report by the Center for Responsive Politics, American Commitment’s story begins several years ago when a group by that name began receiving millions of dollars from TC4 Trust, a group that poured millions into the Koch brothers’ projects. According to Internal Revenue Service filings, the group received more than $9 million from TC4 Trust between late 2009 and early 2010.
But after receiving the money, American Commitment disappeared without ever filing a Form 990 with the IRS. With it, the paper trail on the $9 million went dark.
In 2010, a second group called American Commitment emerged, founded by Sean Noble, a Koch confidant who runs another money-shuffling nonprofit called the Center to Protect Patient Rights. The second American Commitment reported no income and no activity in its first year. It then changed its name and received $3.8 million from CPPR.
Then came the third incarnation of American Commitment, the 501(c)(4) organization that Kerpen runs today alongside the new super PAC. According to IRS forms, Noble served as the group’s director in 2011 until Kerpen took over in 2012. None of the money associated with the previous versions of the group was reported by the current American Commitment. The new group has a different employee identification number from its forerunners, but according to IRS databases, there has only been one group by that name in recent years. CPPR’s forms show that it gave the current group $1.6 million in 2011, when Noble was running both of them, but American Commitment never reported that income. Referring to filings by American Commitment, CPPR and TC4, a tax expert and former IRS official told the Center for Responsive Politics that it’s “impossible to imagine a circumstance” in which all the groups’ filings to the IRS are accurate.
American Commitment spent nearly $2 million attacking a number of Democratic candidates in the 2012 election cycle, but did not report any of its earnings to the Federal Election Commission.
“It’s very difficult to track this dark money and how it’s raised, how it’s spent, how it influences our political system,” said Viveca Novak, editorial director at the Center for Responsive Politics. “But we haven’t seen a case that’s quite as unusual as this one, where a group seems to come and go and rise again with a different identification number and money seems to disappear.”
Unlike its nonprofit sister organization, American Commitment Action Fund is a super PAC and must disclose its donors. But because the group has a January 2014 filing deadline, it has yet to reveal how much money it has or where it came from. By the time that information is made public, the New Jersey race will have been long over.
Booker, a popular Democrat in a blue state, probably doesn’t need to worry about the videos being put out by Kerpen’s super PAC. But how much money the group has and where it comes from is a question many other candidates may begin to ask themselves, as the midterm elections get under way next year. As Kerpen told the Washington Post in July, the Booker-Lonegan race is his group’s “first project.”
“AC Action Fund is committed to making the necessary investments to defeat liberals for federal office and support free-market conservatives to return our nation to prosperity,” Kerpen said.