Shadowy funders build liberal war chest to unseat governor

By Tori Richards | Watchdog.org

A few wealthy, anonymous donors funded a liberal activist group working on the failed recall of Wisconsin’s governor, Watchdog.org has learned.

Nearly 75 percent of the money funneled into the Center for Media and Democracy during 2011 and 2012 came from just a few donors whose names have been redacted from tax forms obtained by Watchdog.

CMD has said, “Most of CMD’s supporters are individual donors who give $5 or more a year to help support the Center’s general operations.”

Those “operations” included contributing to the unsuccessful but expensive effort by liberals and labor unions to unseat GOP Gov. Scott Walker in 2011 following his successful reform of Wisconsin’s public-employee benefits system.

CMD remains in the thick of things, recently using its own blog to cheerlead the Democratic district attorney of Milwaukee for launching a secret investigation of Walker’s conservative supporters.

There’s irony in the recently revealed CMD tax filings. A nonprofit that pushes its anti-conservative agenda on several blogs and through multiple allied liberal groups, CMD has blasted conservative and libertarian nonprofits for taking money from only a few anonymous donors. Whether on the left, right or anywhere else, it’s all legal: Tax law allows nonprofits to maintain donor anonymity.

Yet when asked in an interview about why she does the same thing, CMD Director Lisa Graves said there’s difference.

“The question of conservative funders versus liberal funders, I think, is a matter of false equivalency,” she said.

Graves refused to respond to phone calls seeking comment for this story.

“The CMD should know enough not to throw stones at glass houses,” said J. Justin Wilson, managing director of the Center for Union Facts, a nonprofit that tracks abuses by organized labor. “To dedicate so much of their mission to calling out anonymous donors of conservative groups when at the same time they are funded largely by a handful of large dollar anonymous donors is the definition of hypocrisy.”

Federal law requires nonprofits to make available to the public tax documents listing donors on a Schedule B. But when the Center for Union Facts asked for that information, CMD balked, Wilson said. He finally received them in mid-December. The donor names were redacted — a practice CMD calls “dark money” when it occurs on the right.

“Dark money groups that do not disclose their donors not only refuse to be transparent about where they get their money, in many cases they are not transparent about how they spend it,” a CMD blog posting said. “And even when dark money groups do report their spending, they continue hiding their funders because of a loophole in campaign finance law only requiring disclosure of donations made for the purpose of funding specific issue ads.”

Wilson’s group pressed CMD to meet its own standard for transparency — or at least the legal standard.

“The law requires them to give this to us, and only after some pressing did they comply,” Wilson said.

If CMD does not provide the documents by the end of the day to a person who showed up at their office requesting them, they are breaking the law, said Alan P. Dye, a Washington, D.C., tax attorney specializing in nonprofits who is also president of the Washington NonProfit and Tax Conference.

“If you complain to the IRS, the IRS would contact them and tell them to turn it over, and if they didn’t, they would be penalized,” Dye said. “They are always accusing everyone else of violating the law. If they are doing the same thing, it would be good for the public to know that — for their hypocrisy to become known.”

In Wilson’s case, he sent a courier to retrieve the documents in person and CMD refused to turn them over, WIlson said. A few weeks later, CMD emailed the tax returns but the Schedule B’s were missing. Another two weeks passed before they agreed to mail the complete form.

What did the documents show?

CMD raised $864,740 in 2011. Of that amount, $646,000 — or 74 percent — came from just seven donors. The largest was $260,000 from the Schwab Charitable Fund, which operates as a kind of middle man, managing contributions to nonprofits precisely so that donors remain anonymous. The second largest donation was $165,000. The Tides Foundation, similar to Schwab but with a decidedly liberal agenda, claims to have given CMD $160,000 in 2011, but that amount does not appear in the tax return.

In 2012, CMD earned $737,223. Fully $540,000 — 73 percent of CMD’s income that year — came from four donors. Schwab contributed another $260,000 from anonymous sources. The next largest donor amount was $125,000.

CMD’s Graves told Watchdog in an earlier interview that Schwab’s sources of donor cash are anonymous, and that she would “swear on a stack of Bibles or any other religious text” as proof of her ignorance of the ultimate source.

Wilson said it’s unlikely that Graves is unaware of her donors.

“I’d be interested in knowing who they are,” Wilson said. “I think the most ridiculous response she could give would be to claim that they were all anonymous.”

Contact Tori Richards at tori@watchdog.org or on twitter @newswriter2

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