Koch-Connected Nonprofits Use 'Dark Money' to Fight Political Disclosure
As the Internal Revenue Service contemplates new rules to illuminate “dark money” in politics, a little-known nonprofit group is fighting back using money traceable to billionaire brothers Charles and David Koch, drug makers and the cable television industry.
The group, American Commitment, received 87 percent of its $13 million in funding between 2011 and 2013 from three Koch-connected nonprofits: the Freedom Partners Chamber of Commerce, Center to Protect Patient Rights and Free Enterprise America, according to tax filings reviewed by the Center for Public Integrity.
The Freedom Partners Chamber of Commerce—which has been called “the Koch brothers’ secret bank” by Politico—has given $6.4 million to American Commitment, including $140,000 in 2013, according to tax records.
The Center to Protect Patient Rights—headed by Koch-connected political consultant Sean Noble—contributed about $4.8 million to American Commitment in 2012.
And another Koch network group headed by Noble, Free Enterprise America, contributed $103,000 to American Commitment in 2011—nearly half of the $216,500 American Commitment reported raising that year.
Meanwhile, additional tax records show two major trade associations are also among American Commitment’s donors: the Pharmaceutical Research and Manufacturers of America and the National Cable and Telecommunications Association, both of which share policy positions with American Commitment.
In 2013, PhRMA contributed $50,000 to American Commitment. That’s up from the $25,000 the drug lobby group gave in 2012. And the National Cable and Telecommunications Association has contributed $20,000 to American Commitment—$10,000 in both 2012 and 2013.
Donors to American Commitment
As a “social welfare” nonprofit organized under Sec. 501(c)(4) of the tax code, American Commitment is not required to publicly disclose its donors, even though it overtly supports political candidates.
But separate IRS filings show the bulk of American Commitment’s money has come from these nonprofits, which are legally required to disclose grants they provide to other nonprofit organizations.
American Commitment itself disclosed, as required by law, that in 2013, it received between $100,000 and $150,000 each from four unnamed donors.
Together, those four donors—one of which appears to have been the Freedom Partners Chamber of Commerce—accounted for half of American Commitment’s $1 million in income last year, according to records filed with the IRS earlier this week.
Led by Phil Kerpen—a veteran of Americans for Prosperity, the Club for Growth and the Cato Institute—American Commitment has vigorously opposed efforts to force donor disclosure on social welfare nonprofit groups.
It has derided liberal politicians for what it calls “shameful efforts to amend the Constitution to empower politicians to regulate political speech” and “backdoor regulatory efforts to limit the First Amendment at federal agencies.”
Earlier this year, after the IRS unveiled a proposal to regulate politically active nonprofits organized under Sec. 501(c)(4) of the tax code, American Commitment co-wrote a letter to the agency’s commissioner calling for the new rules to be “withdrawn and abandoned.”
According to its website, it’s also helped thousands of people flood the inboxes of their lawmakers with the message: “Don’t let the IRS gut the First Amendment!”
Given its involvement in elections, American Commitment ranks high among social welfare nonprofits that would be affected by any new IRS rules governing so-called dark money—cash from publicly undisclosed donors used to boost or bash political candidates.
Ahead of the 2014 midterms, American Commitment promoted Republican U.S. Senate candidate Thom Tillis of North Carolina in radio ads. In 2013, it backed Republican US Senate candidate Steve Lonegan in his race against Democrat Cory Booker. And Sen. Jeff Flake (R-AZ) was among politicians American Commitment supported in 2012.
Campaign finance reform activists for years have called upon the tax agency to take a more aggressive stance regarding politically active nonprofits, which gained the ability to fund advertisements explicitly calling for the election or defeat of lawmakers in the wake of the US Supreme Court’s Citizens United v. Federal Election Commission decision in 2010.
Groups such as Crossroads GPS on the right, which was co-founded by GOP strategist Karl Rove, and Patriot Majority USA on the left, which is run by allies of Senate Majority Leader Harry Reid (D-NV) have proliferated—all while legally keeping their donors’ names secret.
Industry lobbying groups such as PhRMA and the National Cable and Telecommunications Association (NCTA) have also found an ally in American Commitment.
One of NCTA’s top issues: opposing “Net neutrality” policies that would regulate the Internet like a utility—a move the trade group says would be “disastrous.”
American Commitment’s Kerpen, meanwhile, has argued that “regulating and taxing the Internet is obviously a terrible idea.”
Joy Sims, an NCTA spokeswoman, declined to comment about the group’s donation to American Commitment.
American Commitment further describes itself as “committed to fully repealing” President Barack Obama’s health care law and replacing it in a way that “empowers patients and doctors” and unleashes “American ingenuity and creativity to cure diseases.”
Robert Zirkelbach, a spokesman for PhRMA—which supported the passage of Obama’s Affordable Care Act but has also funneled money to groups like American Commitment that want it scrapped—aid the trade group often gives out money to “organizations that share PhRMA’s goals of improving the quality of patients’ lives” and “supporting the discovery of new treatments and cures.”
Other donors to American Commitment remain unknown—exactly how the group wants them to be.
“We agree with the Warren Court’s landmark 1958 ruling in NAACP v. Alabama that protecting the privacy of our members is critical to their core First Amendment rights of free speech and free association,” Kerpen wrote in an email to the Center for Public Integrity.
In recent years, the American Future Fund has spent tens of millions of dollars advocating against federal lawmakers, including about $81,000 in late 2013 against Rep. Collin Peterson, the ranking Democratic member of the House Agriculture Committee.
Like American Commitment, it has done so without disclosing its funders.
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Disasters stemming from hazards like floods, wildfires, and disease often garner attention because of their extreme conditions and heavy societal impacts. Although the nature of the damage may vary, major disasters are alike in that socially vulnerable populations often experience the worst repercussions. For example, we saw this following Hurricanes Katrina and Harvey, each of which generated widespread physical damage and outsized impacts to low-income and minority survivors.
Mapping Social Vulnerability<p>Figure 1a is a typical map of social vulnerability across the United States at the census tract level based on the Social Vulnerability Index (SoVI) algorithm of <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6237.8402002" target="_blank"><em>Cutter et al.</em></a> . Spatial representation of the index depicts high social vulnerability regionally in the Southwest, upper Great Plains, eastern Oklahoma, southern Texas, and southern Appalachia, among other places. With such a map, users can focus attention on select places and identify population characteristics associated with elevated vulnerabilities.</p>
Fig. 1. (a) Social vulnerability across the United States at the census tract scale is mapped here following the Social Vulnerability Index (SoVI). Red and pink hues indicate high social vulnerability. (b) This bivariate map depicts social vulnerability (blue hues) and annualized per capita hazard losses (pink hues) for U.S. counties from 2010 to 2019.<p>Many current indexes in the United States and abroad are direct or conceptual offshoots of SoVI, which has been widely replicated [e.g., <a href="https://link.springer.com/article/10.1007/s13753-016-0090-9" target="_blank"><em>de Loyola Hummell et al.</em></a>, 2016]. The U.S. Centers for Disease Control and Prevention (CDC) <a href="https://www.atsdr.cdc.gov/placeandhealth/svi/index.html" target="_blank">has also developed</a> a commonly used social vulnerability index intended to help local officials identify communities that may need support before, during, and after disasters.</p><p>The first modeling and mapping efforts, starting around the mid-2000s, largely focused on describing spatial distributions of social vulnerability at varying geographic scales. Over time, research in this area came to emphasize spatial comparisons between social vulnerability and physical hazards [<a href="https://doi.org/10.1007/s11069-009-9376-1" target="_blank"><em>Wood et al.</em></a>, 2010], modeling population dynamics following disasters [<a href="https://link.springer.com/article/10.1007%2Fs11111-008-0072-y" target="_blank" rel="noopener noreferrer"><em>Myers et al.</em></a>, 2008], and quantifying the robustness of social vulnerability measures [<a href="https://doi.org/10.1007/s11069-012-0152-2" target="_blank" rel="noopener noreferrer"><em>Tate</em></a>, 2012].</p><p>More recent work is beginning to dissolve barriers between social vulnerability and environmental justice scholarship [<a href="https://doi.org/10.2105/AJPH.2018.304846" target="_blank" rel="noopener noreferrer"><em>Chakraborty et al.</em></a>, 2019], which has traditionally focused on root causes of exposure to pollution hazards. Another prominent new research direction involves deeper interrogation of social vulnerability drivers in specific hazard contexts and disaster phases (e.g., before, during, after). Such work has revealed that interactions among drivers are important, but existing case studies are ill suited to guiding development of new indicators [<a href="https://doi.org/10.1016/j.ijdrr.2015.09.013" target="_blank" rel="noopener noreferrer"><em>Rufat et al.</em></a>, 2015].</p><p>Advances in geostatistical analyses have enabled researchers to characterize interactions more accurately among social vulnerability and hazard outcomes. Figure 1b depicts social vulnerability and annualized per capita hazard losses for U.S. counties from 2010 to 2019, facilitating visualization of the spatial coincidence of pre‑event susceptibilities and hazard impacts. Places ranked high in both dimensions may be priority locations for management interventions. Further, such analysis provides invaluable comparisons between places as well as information summarizing state and regional conditions.</p><p>In Figure 2, we take the analysis of interactions a step further, dividing counties into two categories: those experiencing annual per capita losses above or below the national average from 2010 to 2019. The differences among individual race, ethnicity, and poverty variables between the two county groups are small. But expressing race together with poverty (poverty attenuated by race) produces quite different results: Counties with high hazard losses have higher percentages of both impoverished Black populations and impoverished white populations than counties with low hazard losses. These county differences are most pronounced for impoverished Black populations.</p>
Fig. 2. Differences in population percentages between counties experiencing annual per capita losses above or below the national average from 2010 to 2019 for individual and compound social vulnerability indicators (race and poverty).<p>Our current work focuses on social vulnerability to floods using geostatistical modeling and mapping. The research directions are twofold. The first is to develop hazard-specific indicators of social vulnerability to aid in mitigation planning [<a href="https://doi.org/10.1007/s11069-020-04470-2" target="_blank" rel="noopener noreferrer"><em>Tate et al.</em></a>, 2021]. Because natural hazards differ in their innate characteristics (e.g., rate of onset, spatial extent), causal processes (e.g., urbanization, meteorology), and programmatic responses by government, manifestations of social vulnerability vary across hazards.</p><p>The second is to assess the degree to which socially vulnerable populations benefit from the leading disaster recovery programs [<a href="https://doi.org/10.1080/17477891.2019.1675578" target="_blank" rel="noopener noreferrer"><em>Emrich et al.</em></a>, 2020], such as the Federal Emergency Management Agency's (FEMA) <a href="https://www.fema.gov/individual-disaster-assistance" target="_blank" rel="noopener noreferrer">Individual Assistance</a> program and the U.S. Department of Housing and Urban Development's Community Development Block Grant (CDBG) <a href="https://www.hudexchange.info/programs/cdbg-dr/" target="_blank" rel="noopener noreferrer">Disaster Recovery</a> program. Both research directions posit social vulnerability indicators as potential measures of social equity.</p>
Social Vulnerability as a Measure of Equity<p>Given their focus on social marginalization and economic barriers, social vulnerability indicators are attracting growing scientific interest as measures of inequity resulting from disasters. Indeed, social vulnerability and inequity are related concepts. Social vulnerability research explores the differential susceptibilities and capacities of disaster-affected populations, whereas social equity analyses tend to focus on population disparities in the allocation of resources for hazard mitigation and disaster recovery. Interventions with an equity focus emphasize full and equal resource access for all people with unmet disaster needs.</p><p>Yet newer studies of inequity in disaster programs have documented troubling disparities in income, race, and home ownership among those who <a href="https://eos.org/articles/equity-concerns-raised-in-federal-flood-property-buyouts" target="_blank">participate in flood buyout programs</a>, are <a href="https://www.eenews.net/stories/1063477407" target="_blank" rel="noopener noreferrer">eligible for postdisaster loans</a>, receive short-term recovery assistance [<a href="https://doi.org/10.1016/j.ijdrr.2020.102010" target="_blank" rel="noopener noreferrer"><em>Drakes et al.</em></a>, 2021], and have <a href="https://www.texastribune.org/2020/08/25/texas-natural-disasters--mental-health/" target="_blank" rel="noopener noreferrer">access to mental health services</a>. For example, a recent analysis of federal flood buyouts found racial privilege to be infused at multiple program stages and geographic scales, resulting in resources that disproportionately benefit whiter and more urban counties and neighborhoods [<a href="https://doi.org/10.1177/2378023120905439" target="_blank" rel="noopener noreferrer"><em>Elliott et al.</em></a>, 2020].</p><p>Investments in disaster risk reduction are largely prioritized on the basis of hazard modeling, historical impacts, and economic risk. Social equity, meanwhile, has been far less integrated into the considerations of public agencies for hazard and disaster management. But this situation may be beginning to shift. Following the adage of "what gets measured gets managed," social equity metrics are increasingly being inserted into disaster management.</p><p>At the national level, FEMA has <a href="https://www.fema.gov/news-release/20200220/fema-releases-affordability-framework-national-flood-insurance-program" target="_blank">developed options</a> to increase the affordability of flood insurance [Federal Emergency Management Agency, 2018]. At the subnational scale, Puerto Rico has integrated social vulnerability into its CDBG Mitigation Action Plan, expanding its considerations of risk beyond only economic factors. At the local level, Harris County, Texas, has begun using social vulnerability indicators alongside traditional measures of flood risk to introduce equity into the prioritization of flood mitigation projects [<a href="https://www.hcfcd.org/Portals/62/Resilience/Bond-Program/Prioritization-Framework/final_prioritization-framework-report_20190827.pdf?ver=2019-09-19-092535-743" target="_blank" rel="noopener noreferrer"><em>Harris County Flood Control District</em></a>, 2019].</p><p>Unfortunately, many existing measures of disaster equity fall short. They may be unidimensional, using single indicators such as income in places where underlying vulnerability processes suggest that a multidimensional measure like racialized poverty (Figure 2) would be more valid. And criteria presumed to be objective and neutral for determining resource allocation, such as economic loss and cost-benefit ratios, prioritize asset value over social equity. For example, following the <a href="http://www.cedar-rapids.org/discover_cedar_rapids/flood_of_2008/2008_flood_facts.php" target="_blank" rel="noopener noreferrer">2008 flooding</a> in Cedar Rapids, Iowa, cost-benefit criteria supported new flood protections for the city's central business district on the east side of the Cedar River but not for vulnerable populations and workforce housing on the west side.</p><p>Furthermore, many equity measures are aspatial or ahistorical, even though the roots of marginalization may lie in systemic and spatially explicit processes that originated long ago like redlining and urban renewal. More research is thus needed to understand which measures are most suitable for which social equity analyses.</p>
Challenges for Disaster Equity Analysis<p>Across studies that quantify, map, and analyze social vulnerability to natural hazards, modelers have faced recurrent measurement challenges, many of which also apply in measuring disaster equity (Table 1). The first is clearly establishing the purpose of an equity analysis by defining characteristics such as the end user and intended use, the type of hazard, and the disaster stage (i.e., mitigation, response, or recovery). Analyses using generalized indicators like the CDC Social Vulnerability Index may be appropriate for identifying broad areas of concern, whereas more detailed analyses are ideal for high-stakes decisions about budget allocations and project prioritization.</p>
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