American Encore

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This article is part of the Center for Media & Democracy's spotlight on front groups and corporate spin.

American Encore is a secretive nonprofit group (formerly known as the Center to Protect Patient Rights) organized under Section 501(c)(4) of the tax code that funneled more than $182 million in undisclosed donations to right-wing advocacy groups from 2009 to 2012, including Americans for Prosperity and the American Future Fund.[1] The Washington Post described it as a "major cash turnstile for groups on the right during the past two election cycles," because it received large amounts of money from Freedom Partners and TC4 Trust as part of the $400 million Koch political network.[2] In 2012, the group's role as a part of an $11 million campaign money laundering shell game was revealed after the California Fair Practices Commission filed suit against one of its donors and recipients, Americans for Responsible Leadership.[3]

Koch Connection

The Koch Brothers are the conservative billionaire co-owners of Koch Industries. As two of the richest people in the world, they are key funders of the right-wing infrastructure, including the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN). In SourceWatch, key articles on the Kochs include: Koch Brothers, Koch Industries, Americans for Prosperity, American Encore, and Freedom Partners.

Koch Ties

The $400 million Koch network.
The $400 million Koch network uses a maze of nonprofit groups and LLCs to conceal donations and campaign activity
Source: Robert Maguire with the Center for Responsive Politics. Matea Gold and Cristina Rivero/The Washington Post.

In March 2014, the Wall Street Journal reported that American Encore was founded by political operative Sean Noble and financed in part by the Koch brothers.[4]

According to the Center for Patient Partnership's 2009 and 2010 tax filings, the group is run by Sean Noble, who Politico has described as a "Koch operative." [5] Noble was part of a group of GOP operatives who met regularly with Karl Rove’s American Crossroads to target 120 House of Representatives races in 2010. [5] Noble was hired by the Kochs to coordinate with other conservative Super PACs to target Democratic representatives in 2010. [6] Other individuals associated with the group also have Koch ties. Consultant Cheryl Hillen has raised at least $2.6 million for the organization and was formerly director of fundraising for the Koch Brothers-backed Citizens for a Sound Economy (which later split into Americans for Prosperity and Freedomworks). One of CPPR's original directors, Heather Higgins, is chairwoman of the Independent Women's Forum, a climate change denialist group that has received Koch money and was previously run by a Koch lobbyist.[7]

"Campaign Money Laundering" Investigation

In 2012, CPPR came under scrutiny during an investigation of a "campaign money laundering"[3] shell game. The Arizona-based 501(c)(4) Americans for Responsible Leadership (ARL) made an $11 million donation to the Small Business Action Committee PAC in California, which spent those funds to oppose Proposition 30 (which would raise taxes) and Proposition 32 (which would prohibit labor unions from raising money for political activities through employees' voluntary payroll deductions).[8] California's elections board did not buy ARL's claim that its donors had given $11 million for reasons other than funding ads to influence these ballot issues and demanded it reveal its funders.[9] ARL spent $11 million on ballot initiatives through a donation of that sum to the Small Business Action Committee PAC (SBAC) in October 2012.[10]

After initial resistance, ARL revealed that it had received $11 million in contributions for the purpose of funding ballot initiatives from another dark money nonprofit, Americans for Job Security(AJS), a group that received its funding from none other than the CPPR. According to the California Fair Political Practices Commission, "Under California law, the failure to disclose this initially was campaign money laundering."[3]The group not only gets funding from CPPR, but is housed in the same offices as Karl Rove's American Crossroads SuperPAC.[11]

While in 2010, CPPR gave $4.8 million to AJS, a sum that was used on anti-Democrat attack ads, in 2012, AJS gave $11 million to CPPR, which gave the money to ARL. ARL then passed the $11 million to the SBAC, indicating that some of the money flow between the organizations has been reversed.[11] The money seems to have moved from one group to another in the span of a few days.[10]

2012

Dark money groups funded by American Encore spent more during the 2012 election cycle than liberal groups and unions have spent since the Citizens United decision.
Source: OpenSecrets.org

According to their 2012 IRS tax filings, the Center to Protect Patient Rights had $146 million in income and $136 million in expenses in 2012.[12] The Center spent $114 million on "coalition building" and $21.8 million on issue advocacy and legislative advocacy.

Although the Center does not pay founder Sean Noble a salary, it paid his firms Noble & Associates $270,149 for management services, Angler LLC $2,824,345, and DC London $4.96 million for management and consulting services plus $15,783,401 to reimburse costs for program expenses. According to a ProPublica report, "What costs DC London could have incurred remain a mystery: The Center’s work mostly consisted of directing grants to other nonprofits, and it doesn’t appear to have offered any programs. (The Center also spent $50,000 on what its tax return described as “occupancy,” a term usually used to mean rent, even though the Center’s lawyer told ProPublica in an email that the group had no office.)...One of the biggest beneficiaries of the Koch network’s money was Sean Noble himself...The Center paid three firms owned by Noble almost $24 million for consulting and other services in 2012—or more than $1 of every $6 it spent."[13]

Grants to Other Organizations

The Center to Protect Patient Rights gave $112 million to right-wing organizations in 2012. Grants of larger than $1 million include:

2011

According to the Center to Protect Patient Rights' tax filings for 2011, the organization gave nearly $15 million away to various conservative groups which heavily aired ads in the 2012 election cycle. The organization raised $25.3 million in 2011 and spent $23.2 million. [14] This is down from 2010, but that is likely due to the fact that 2011 was not an election year.

The American Future Fund one of the biggest recipients of grants from the Center to Protect Patient Rights, in recent years, received $1.1 million in 2011. AFF themselves spent $25 million on the 2012 elections, $11 million of which would go towards supporting Mitt Romney or opposing Barack Obama.

The right-wing groups receiving funding in 2011 include:

Additionally, two consulting firms run by Noble, DC London and Noble & Associates, were paid a total of $3.1 million by CPPR.

2010

In 2010, the Center to Protect Patient Rights made a round of massive donations to some of the most prominent right-wing profit political groups, most of which oppose the Affordable Care Act, higher taxes on the wealthy, or abortion. As a 501(c)4 nonprofit organization, the CPPR does not have to disclose its donors, the source of this money. However, it must disclose its donations. Most of the recipients of CPPR's largesse are also nonprofits that do not disclose their donors, so CPPR's contributions had not been previously reported.[15]

The group gave out more than $44 million in grants in 2010. Including $11.7 to the American Future Fund This exceeds the $10 million the organization originally reported to Federal Election Committee

The table below lists every organization given money by CPPR in 2010:[16]

2009

In 2009, the Center to Protect Patient Rights took $13.7 million in contributions although its tax return states that it did not engage in fundraising activities. [17]

Ties to the Coalition to Protect Patient Rights?

The Center to Protect Patient Rights appears to have ties to the similarly-named Coalition to Protect Patient's rights, whose records are stored at the same Glendale, Ariz., address by a woman who describes herself as an employee of DCI Group, a lobbying firm practiced in manufacturing "grassroots" campaigns for the tobacco industry and others that has handled public relations for the Coalition. But the Coalition's spokesman, physician and lawyer, Donald Palmisano, told OpenSecrets Blog in 2011 he'd never heard of CPPR, as did a publicist with DCI Group. [19]

The Coalition received nearly $1.6 million from CPPR in 2011, as well as $1.9 million in 2009 and $205,000 in 2010.

"According to its most recent Form 990, obtained by OpenSecrets Blog, the Coalition paid Mentzer Media $1.4 million in 2011 for "media strategy and ad buy." That expenditure along accounted for nearly all of the Coaltion's spending in 2011, and all of the money it received from CPPR. Though it has never reported any spending on federal candidates to the Federal Election Commission, the Coalition was listed as one of the groups mounting an attack against Ohio Democratic Senate candidate Sherrod Brown, according to the Huffington Post; Brown won his race." [20]

Contact Information

Physical Address:
Sean Noble
PO Box 72465
Phoenix, AZ 85050

Telephone:
480-252-0772

Year Founded:
2009

Articles and resources

Related SourceWatch articles

References

  1. Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014.
  2. Matea Gold, "Koch-backed political coalition, designed to shield donors, raised $400 million in 2012," Washington Post, January 5, 2014.
  3. 3.0 3.1 3.2 "Americans for Responsible Leadership Admits Campaign Money Laundering, Discloses $11 Million Donor", "California Fair Political Practices Commission", November 5, 2012.
  4. Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014.
  5. 5.0 5.1 Ken Vogel, Kochs brothers' plan for 2012: raise $88 million, Politico, Feb. 11, 2011.
  6. Lee Fang: Koch Operative Steered $55 Million To Front Groups Airing Ads Against Democrats; Ads Assailed Candidates Over Abortion, 9/11, Medicare, Republic Report, May 19th, 2012
  7. Brendan Fischer, Americans for Job Security Targets WI GOP Senate Race, From the Shadows, PRwatch, Aug. 10, 2012.
  8. Andy Kroll, "California's Biggest 'Campaign Money Laundering' Scheme, Revealed- Kinda", "Mother Jones", November 5, 2012
  9. Ian Lovett, "California: Lawsuit Seeks Name of Political Donors", October 25, 2012.
  10. 10.0 10.1 Chris Megerian and Patrick McGreevy "Disclosure by Arizona nonprofit shows ties to Koch brothers", LA Times Blog, November 5th, 2012.
  11. 11.0 11.1 Brendan Fischer, "California Elections Board Peels Back Layer of Dark Money Onion, Finds More Onion", "PR Watch", November 6, 2012.
  12. Center to Protect Patient Rights, "2012 IRS 990 Filing," National Center for Charitable Statistics, accessed April 4, 2014.
  13. Kim Barker and Theodoric Meyer, "The Dark Money Man: How Sean Noble Moved the Kochs’ Cash into Politics and Made Millions," ProPublica, February 14, 2014.
  14. Novak, Viveca. Center to Protect Patient Rights Gave Millions in 2011 to Outside Spenders in Election Accessed 12/17/2012.
  15. Cite error: Invalid <ref> tag; no text was provided for refs named Open_Secrets
  16. Vivica Novak and Robert Macguire: Mystery Health Care Group Funneled Millions to Conservative Causes, Opensecrets.org, Accessed Monday October 1st, 2012
  17. Alison Fitzgerald and Jonathan D. Salant, Secret Political Cash Moves Through Nonprofit Daisy Chain, BloombergBusinesweek, October 15, 2012.
  18. CPPR IRS 990 for 2009
  19. Novak, Viveca. Center to Protect Patient Rights Gave Millions in 2011 to Outside Spenders in Election Accessed 12/17/2012.
  20. Cite error: Invalid <ref> tag; no text was provided for refs named open_secrets