American Encore

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Follow the money in the Koch wiki.

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 Wiki

The Koch brothers -- David and Charles -- are the right-wing 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.

Ties to the Koch Brothers

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 CPPP's 2009 and 2010 tax filings, the group is run by Sean Noble, who Politico has described as a "Koch operative". [5] Noble was also 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]

2014 Midterm Election

In March 2014, CNN reported that American Encore "plans to spend $10 million this midterm cycle against Democrats who have been critical of outside campaign spending"[8] According to the Wall Street Journal, Sean Noble "said the group will highlight any issue it views as "a threat to free enterprise and the free enterprise system,” including the proposed IRS rules and the 2010 health law."[9]

National Ads Attack Democrats on Healthcare

Stop Attacking Free Speech

On May 20, 2014, American Encore announced a national ad campaign, run jointly with a group called American Commitment, targeting Democrats on the topic of the 2010 Affordable Care Act. According to American Encore, the first part of the campaign, "Fix it Fail," "commit[ed] an initial $100,000 to an aggressive paid and earned media effort" related to the law.[10] The ad includes clips of eight Democratic Senators: Mark Begich (D-AK), Al Franken (D-MN), Kay Hagan (D-NC), Kirsten Gillibrand (D-NY), Mary Landrieu (D-LA), Mark Pryor (D-AR), Jeanne Shaheen (D-NH), and Mark Warner (D-VA). According to the Washington Times the ad "features the Democratic Senate incumbents insisting the Affordable Care Act can be repaired after its disastrous October roll-out, then shows other top Democrats saying there are no plans for a legislative fix."[11]

Support for IRS Bill

The CPPR was one of 60 right-wing groups that signed a February 25, 2014 letter to Congress in support of the Stop Targeting of Political Beliefs by the IRS Act of 2014. According to OpenSecrets, the act would "block the IRS for one year from implementing new rules to define and limit political activity by “social welfare” nonprofits."[12] One day later, the group, now under the name "American Encore," also filed a comment together with the Center for Individual Freedom and American Commitment.[12]

Ads Attacks Supporters of Limits on Political Spending by Nonprofits

Stop Attacking Free Speech

American Encore spent $30,000 for an ad released March 31, 2014 attacking Senator Harry Reid (D-NV) on the topic of limits on political activity by nonprofits. The ad accuses Reid of "attacking free speech." According to Politico, the following day Reid "called American Encore one of the Kochs’ 'puppet organizations,' likening it to Americans for Prosperity" and saying, "To any and all groups who wish to attack me on behalf of multibillionaires, fire away … I am very happy, I’m proud to be the target of those attacks. I will gladly endure them in order to call attention to the unscrupulous acts of these two barons."[13] Reid will not be up for re-election until 2016.[8]

American Encore appears to be targeting Minnesota Senator Al Franken (D) in his 2014 re-election race. The group spent about $250,000 on a 60-second ad against Franken that began running on March 26, 2014. The Wall Street Journal described the ad as "criticizing Mr. Franken for supporting additional restrictions on tax-exempt issue-advocacy groups" and stated that the ad "derides efforts by the IRS and Senate Democrats to impose new rules on these nonprofits, citing complaints by the American Civil Liberties Union. “Tell Sen. Franken to stop attacking free speech,” the narrator says."[9]

California's $11 Million "Campaign Money Laundering" Investigation and Fine

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 on millions) and Proposition 32 (which would prohibit labor unions from raising money for political activities through employees' voluntary payroll deductions).[14] 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.[15] ARL spent $11 million on ballot initiatives through a donation of that sum to the Small Business Action Committee PAC (SBAC) in October 2012.[16]

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]AJS not only gets funding from CPPR, but is housed in the same offices as Karl Rove's American Crossroads SuperPAC.[17]

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.[17] The money seems to have moved from one group to another in the span of a few days.[16]

In a settlement with California Attorney General Kamala D. Harris and the Fair Political Practices Commission, the CPPR and Americans for Responsible Leadership agreed to pay a $1 million fine and AJS and SBAC must turn over the $15 million in contributions they received.[18] According to the press release from the Fair Political Practices Commission, "Under California law, the failure to disclose this initially was campaign money laundering. At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history."[19]

Sean Noble the head of CPPR argued that the fine was "over-reach", that he followed all laws and that prosecutors violated what he claimed were "First Amendment" right of the donors whose identities he had refused to disclose. Gary Winuk, the FPPC's chief of enforcement, responded: "Sean Noble agreed to and paid a record fine on behalf of the Koch network for a reason. It was the largest amount of undisclosed dark money in the history of California. His vain attempts to try to minimize the case should not serve to give comfort to anyone who tries to hide money in California, because we are prepared to confront them at every turn." [20]

2012 Activities

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 CPPR had $146 million in income and $136 million in expenses in 2012.[21] 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."[22]

Grants to Other Organizations

The Center to Protect Patient Rights gave $112 million to right-wing organizations in 2012.[23]

2011 Activities

According to the CPPR's 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. [24] This was 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 from CPPR 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 Activities

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.

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

The table below lists every known organization given money by CPPR in 2010:[25]

2009 Activities

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. [26]

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. [28]

However, 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." [28]

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. 8.0 8.1 Peter Hamby, "Harry Reid push called 'un-American' in new ad​," CNN, March 31, 2014. Accessed June 3, 2014.
  9. 9.0 9.1 Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014. Accessed June 3, 2014.
  10. American Encore, "[“Fix It Fail” Campaign Slams Democrats for Cynical “New Obamacare Lie”," organizational press release, May 20, 2014. Accessed June 9, 2014.
  11. Valerie Richardson, "Ad calls Democrat vows to fix Obamacare a new lie," The Washington Times, May 20, 2014. Accessed June 9, 2014.
  12. 12.0 12.1 Robert Macguire, "An Encore for the Center to Protect Patient Rights," OpenSecrets, March 5, 2014. Accessed June 3, 2014.
  13. Burgess Everett, "Harry Reid: Paul Ryan budget creates 'Koch-topia'," Politico, April 1, 2014. Accessed June 3, 2014.
  14. Andy Kroll, "California's Biggest 'Campaign Money Laundering' Scheme, Revealed- Kinda", "Mother Jones", November 5, 2012.
  15. Ian Lovett, "California: Lawsuit Seeks Name of Political Donors", October 25, 2012.
  16. 16.0 16.1 Chris Megerian and Patrick McGreevy "Disclosure by Arizona nonprofit shows ties to Koch brothers", LA Times Blog, November 5th, 2012.
  17. 17.0 17.1 Brendan Fischer, "California Elections Board Peels Back Layer of Dark Money Onion, Finds More Onion", "PR Watch", November 6, 2012.
  18. Nicholas Confessore, "Group Linked to Kochs Admits to Campaign Finance Violations," New York Times, October 24, 2013.
  19. California Fair Political Practices Commission, "Americans for Responsible Leadership Admits Campaign Money Laundering, Discloses $11 Million Donor," organization website, accessed April 29, 2014.
  20. Sacramento Bee, "Sean Noble Speaks Out About 1 Million FPPC Fine," April 7, 2014.
  21. Center to Protect Patient Rights, "2012 IRS 990 Filing," National Center for Charitable Statistics, accessed April 4, 2014.
  22. 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.
  23. Center to Protect Patient Rights, 2012 IRS form 990, organizational tax filing, accessed July 9, 2014.
  24. Novak, Viveca. Center to Protect Patient Rights Gave Millions in 2011 to Outside Spenders in Election Accessed 12/17/2012.
  25. Vivica Novak and Robert Macguire: Mystery Health Care Group Funneled Millions to Conservative Causes, Opensecrets.org, Accessed Monday October 1st, 2012.
  26. Alison Fitzgerald and Jonathan D. Salant, Secret Political Cash Moves Through Nonprofit Daisy Chain, BloombergBusinesweek, October 15, 2012.
  27. CPPR IRS 990 for 2009
  28. 28.0 28.1 Novak, Viveca. Center to Protect Patient Rights Gave Millions in 2011 to Outside Spenders in Election Accessed 12/17/2012.