Americans for Prosperity

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

Editor's note: A misrepresentation reported on this page has been corrected. Scott Jensen the Wisconsin politician is not the chief financial officer and treasurer of Orion Energy Systems. The correct Scott R. Jensen who holds that position can be found here.

Americans for Prosperity (AFP) is a group fronting special interests started by oil billionaire David Koch and Richard Fink (a member of the board of directors of Koch Industries). AFP has been accused of funding astroturf operations but also has been fueling the "Tea Party" efforts. [1] AFP's messages are in sync with those of other groups funded by the Koch Family Foundations and the Koch's other special interest groups that work against progressive or Democratic initiatives and protections for workers and the environment. Accordingly, AFP opposes labor unions, health care reform, stimulus spending, and cap-and-trade legislation, which is aimed at making industries pay for the air pollution that they create. AFP was also involved in the attacks on Obama’s "green jobs" czar, Van Jones, and has crusaded against international climate talks. According to an article in the August 30, 2010 issue of The New Yorker, the Kochs are known for "creating slippery organizations with generic-sounding names," that "make it difficult to ascertain the extent of their influence in Washington." AFP's budget surged from $7 million in 2007 to $40 million in 2010, an election year. [2][3]. As of August 13th, Americans for Prosperity spent an estimated $45 million on ads to influence the 2012 presidential election, their total budget for 2012 will top $100 million. [4] For a more detailed summary of AFP's 2012 election activities, see: Americans for Prosperity in the 2012 Election.

Description

"Americans for Prosperity" generally refers to the organization's section 501(c)(4) branch, generally referred to as a "dark money" group because it does not have to disclose its donors, despite spending millions to influence political campaigns. It can also refer to the "Americans for Prosperity Foundation (AFP Foundation)", a section 501(c)(3) organization which is also allowed to conceal its donors. Both organizations state that they are "committed to educating citizens about economic policy and a return of the federal government to its Constitutional limits." On its website it states that it supports "cutting taxes and government spending in order to halt the encroachment of government in the economic lives of citizens by fighting proposed tax increases and pointing out evidence of waste, fraud, and abuse."[5]

AFP Michigan's director, Scott Hagerstrom, advocates "taking the unions out at the knees"

AFP was one of the lead organizations behind the Tax Day Tea Party protests April 15, 2009. Its Director is Art Pope, an ex-legislator who has been dubbed "The Knight of the Right" by Raleigh News and Observer journalist Rob Christensen.[6]

In mid-2009, Americans for Prosperity launched an advertising and advocacy campaign opposing U.S. health care reform named Patients United Now.[7]

On its website it describes its "featured partners" as being the Heartland Institute's International Conference on Climate Change, the Internet Freedom Coalition and Townhall.com.[8]

Background and history

AFP was established in late 2003 as a successor to the Citizens for a Sound Economy Foundation, an industry-funded think tank,[9] following an internal rift between Citizens for a Sound Economy and its affiliated foundation.[10] AFP was formally affiliated with the Independent Women's Forum. Both organizations shared the same Washington address, and formerly shared most of the same operational staff.[11] In 2008, IWF moved to separate office space.

The October 2003 Washington Times report on the formation of AFP stated, "Nancy Pfotenhauer, an executive of Citizens for a Sound Economy [CSE] in the 1990s who helped defeat Hillary Rodham Clinton's health care reform proposal, has been tapped to head a new national advocacy organization to protect 'every American's fundamental right to pursue prosperity.'"[12]

"Before joining the Independent Women's Forum in 2001, [Nancy] Pfotenhauer headed the Washington office of Koch Industries, a conglomerate with holdings in oil and gas, chemicals, minerals, ranching, and securities; Koch Executive Vice President David Koch was a founder and a chairman of the CSE Foundation and is now on the AFP board," reported the National Journal in November 2003. "Pfotenhauer worked with Koch in the mid-'90s, when she was executive vice president of both CSE and the CSE Foundation. But she has an even longer history with AFP board member Walter Williams, for whom she was a graduate research assistant at George Mason University 20 years ago."[13]

Americans for Prosperity in Wisconsin

Americans for Prosperity-Wisconsin is the state arm of the national AFP, a non-profit group founded and funded by billionaire ideologue David Koch, who actively serves as chairman of AFP’s board. AFP is a private sector member of ALEC, as is Koch Industries, which has had a seat on ALEC’s governing private sector board for almost two decades and also chaired ALEC’s corporate board for a number of years.

AFP has been very active in Wisconsin, teaming up with the Madison-based MacIver Institute to spend millions on the "It's Working!" campaign – a series of TV ads and town hall meetings asserting that Governor Scott Walker’s severe cuts to education and his dramatic repeal of the rights of public workers are “working,” in advance of Walker’s June 2012 recall election. AFP and MacIver have reportedly spent at least $2.9 million in the past few months on TV ads supporting Walker’s agenda as well as untold sums on town hall meetings, rallies, direct mail, Internet outreach, and other work. State AFP chapters around the country are also organizing “Freedom Phone” phone banks to have individuals make calls into the state “supporting the Wisconsin reforms.” Additionally, the AFP chapter in Illinois is busing out-of-state people into Wisconsin to canvass neighborhoods just a few days before the election.

Luke Hilgemann is the director of AFP-Wisconsin, and until January 2012, he was the Chief of Staff for Rep. Suder, the ALEC co-chair for Wisconsin. In his AFP biography, Hilgemann notes that during his time in the Assembly, under the Walker administration, he “helped craft and implement one of the most conservative legislative agendas in state history which included collective bargaining reforms, Conceal and Carry, Voter ID, and Castle Doctrine” – all of which track key provisions of ALEC model legislation.

According to documents obtained by Common Cause, AFP was on ALEC’s Tax and Fiscal Policy Task Force in 2011, and its Energy, Environment and Agriculture Task Force in 2010, but currently-available task force information does not include member rosters.

When ALEC came under additional public scrutiny this spring, Wisconsin legislators received identical emails supporting ALEC from people claiming to be constituents, and the text of the emails was identical to the language in an online petition pushed by AFP across the country.

In addition to funding from Koch, AFP has received some financial support from the Lynde and Harry Bradley Foundation, which has also given money to ALEC. [14]

2011 Wisconsin Protests & 2011/2012 Recall Elections

Koch Industries and Scott Walker

In Feb. 2011, Wisconsin Gov. Scott Walker introduced a "budget repair bill" that would deny collective-bargaining rights to public-sector workers, and included language that would allow for the selling off of state-owned power plants, as well as enable officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.[15]

Among those supporting the bill were Americans for Prosperity, with state records showing that Koch Industries, whose energy and consumer products conglomerate is based in Wichita, Kansas, was one of the biggest contributors to Walker's election campaign. Koch owns a coal company subsidiary with facilities throughout Wisconsin, including in Green Bay, Manitowoc, Ashland and Sheboygan.[16]

The bill included a Governor's request for sole power to sell off Wisconsin state owned power plants: “The department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).” (Budget Repair Bill, Section 44, 16.896).[15]

According to New York Times columnist Paul Krugman: "The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be 'considered to be in the public interest.'”[15] Koch Industries has denied that it has any interest in buying the power plants.[17]

In February 2012, David Koch gave a rare interview to the Palm Beach Post and discussed his involvement with the Governor's pending recall election. "We're helping him, as we should. We've gotten pretty good at this over the years," he told the Post, adding "We've spent a lot of money in Wisconsin. We're going to spend more." [18]

The interview closely followed AFP's purchase of $700,000 worth of television ads in Wisconsin, which it produced in tandem with the MacIver Institute. The ad claimed that by eliminating collective bargaining, Walker had "put taxpayers back in control" and praised his record. [19] The ads were paid through AFP's 501(c)3 branch, which is not allowed to directly participate in elections. The ad does not mention Scott Walker by name, but clearly articulates for his policies.

"It's Working Wisconsin"

Anonymous targets Americans for Prosperity in retaliation

On February 27, 2011, the activist group Anonymous announced an attack on Koch Industries[20] as a response to the Wisconsin protests. Between 1997 and 2008, David and Charles Koch collectively gave more than $17 million to groups lobbying against unions[21]; the Kochs are one of (Republican) Governor Walker's largest corporate supporters.[22] Anonymous accused the brothers of attempting "to usurp American Democracy" and called for a boycott of all Koch Industries products.[23][24] Under "Operation Wisconsin," Anonymous members took down the website of the Koch-funded group Americans for Prosperity with a distributed denial of service attack on Feb. 27, 2011.

Anti-union advocacy

AFP adopts the anti-union positions held by its libertarian funders, David and Charles Koch. [25] A video published on YouTube on February 26, 2011 shows Scott Hagerstrom, the executive director of Americans for Prosperity Michigan, advocating "taking unions out at the knees so they don't have the resources" to fight for workplace benefits or political candidates. [26]

"David Koch-funded Americans for Prosperity conventions in Wisconsin" in the two years prior to 2011 "may have helped lay the groundwork for the state's controversial battle over labor rights and budget cuts. The conventions featured leading figures in the right-wing's attack on workers, and may also have skirted disclosure rules in the process. Governor Scott Walker and Attorney General J.B. Van Hollen appeared when they were running for office, and both conventions featured Wisconsin Supreme Court Justice David T. Prosser, Jr.....

"In both the 2009 and 2010 conferences, AFP invited activists to attend a closing 'reception' with 'invited candidates for elected office' that was 'fully sponsored and hosted' by the Wisconsin Center for Economic Prosperity (WCEP), a Political Action Committee (PAC). AFP added a disclaimer to the 2010 political candidate meet-and-greet reception, stating 'the reception and corresponding activities are not sponsored or hosted by the Americans for Prosperity Foundation, Americans for Prosperity, or the Wisconsin Prosperity Network.' This disclaimer was likely aimed at avoiding restrictions on non-profit involvement in partisan political activities, such as funding a reception for federal and state candidates. However, at the time of the conventions, WCEP shared leadership with AFP. Federal filings showed that at least one of WCEP's checking accounts was in the name of Mark Block, the president of Americans for Prosperity-Wisconsin until 2011."[27]

A TV station reported on a March 4, 2011 AFP rally in Ashwaubenon, WI that featured a custom-painted, pro-Scott Walker luxury coach

In early March, 2011, AFP conducted a "Stand with Walker" bus tour to Wisconsin, complete with a custom-painted luxury coach with a picture of embattled Wisconsin Governor Scott Walker professionally-painted on the side. The bus arrived in Ashwaubenon, WI on Friday, March 4. About 100 people attended the rally, a "high turnout" that, one Wisconsin TV station reported "forced organizers to move from Perkins restaurant to the Holiday Inn next door." Americans for Prosperity's Wisconsin state director, Matt Seaholm, who attended the rally, said, "What we're doing here is, we want to go around the state, you know, give our folks a chance to show their support for what Governor Walker is doing. So often they can't make it down to Madison and take the day off, so we thought we'd bring the show to them." [28] A custom-painted luxury coach that goes on highly publicized tours is a hallmark of a corporate-funded front group, according to PRWatch.org's article on the characteristics of front groups.[29]

The debate over the public union-quashing Wisconsin "Budget Reform Bill" overflowed into the Spring 2011 non-partisan statewide election, where candidates for Wisconsin Supreme Court justice, incumbent David T. Prosser, Jr. and challenger JoAnne Kloppenburg, campaigned as pro- and anti-Walker, respectively. Americans for Prosperity weighed in, sending out a "mailer criticizing Wisconsin Supreme Court candidate Joanne Kloppenburg for prosecutions that were trumpeted by her boss Wisconsin's Republican Attorney General J.B. Van Hollen, who is defending Governor Walker's union-busting bill in court.... [E]ach of these acts were in the context of enforcing the state's environmental laws. Considering that AFP and the Kochs have been pushing climate change denial and the repeal of environmental regulation, is it coincidence that they chose these examples?"[30]

Then, on April 16th, 2011, "Sarah Palin, former Governor of Alaska who quit her job in 2009, headlined a rally in Madison, Wisconsin, bought and paid for by the front-group Americans for Prosperity (AFP), but billed as a "grassroots" Tea Party event. The Koch-funded AFP set up the stage and programmed 13 buses into Madison, but only six were labeled "full" on their website on Saturday. AFP also likely paid the airfare and fees of the national speakers."[31] "[C]ounter-protesters outnumbered Tea Party supporters. Wisconsin Wave held an early rally on the opposite side of the capitol, giving progressives a platform for the day but ending in time for attendees to march in opposition to Palin's speech.... Hundreds of protesters brought hand puppets to the event, illustrating the theme 'Walker and Palin are corporate puppets' of the Koch Brothers and other corporate interests."[32]

Tobacco industry involvement

AFP advocates pro-tobacco industry positions on issues like cigarette taxes and clean indoor air laws. The name "Americans for Prosperity" will sound familiar to tobacco prevention policy advocates, as Americans for Prosperity worked around the U.S. in recent years to defeat both smokefree workplace laws and cigarette excise tax increases.

Americans for Prosperity opposed a proposed Texas smoking ban in 2005. According to the Fort Worth Star-Telegram, “A proposed statewide smoking ban appears all but dead, supporters acknowledged Monday as they waged a frantic battle to bring the bill up for a vote in the Senate. ‘I think the bill is dead,’ said Peggy Venable, Texas director of Americans for Prosperity, which opposed the legislation, arguing that it is an intrusion on private-property rights." The strategy of portraying smoking as a "property right" can be traced to Philip Morris which, in the mid-1990s, introduced bills in state legislatures nominally to protect property rights as a means of fighting smoking bans. Venable called the smoke-free measure a "reckless expansion of government" that "set a dangerous precedent." Although Venable did not testify against the bill directly on behalf of the tobacco industry, the Houston Chronicle reported in 2007 that Americans for Prosperity had, in fact, been underwritten by tobacco companies in other states.[33][34]

Americans for Prosperity opposes smoking bans by using slippery-slope arguments ("Where will it stop?") and erroneous arguments that smoking restrictions are economically damaging.[35][36]

Americans for Prosperity (AFP) also opposed an Illinois state tax on cigarettes in 2008, claiming it would eliminate jobs.[37]

AFP opposed a clean indoor air law in Washington, D.C. in 2006.[38]

AFP opposed a clean indoor air law in Kansas City, portraying the issue as one of personal liberty and economics rather than public health.[39]

Involvement in protesting health care reform

Speaker compares HR 3200 to history's greatest atrocities at a Patients First co-sponsored event in Pueblo, CO in August, 2009

Americans for Prosperity created an offshoot front group called Patients United Now, which organized what is estimated to be in excess of three hundred rallies against health-care reform. Patients United Now also helped organize "Kill the Bill” protests outside the Capitol, in March 2010, where Democratic supporters of health-care reform alleged that they were spat on and cursed at.[40]

In 2009 Americans for Prosperity, along with The 912 Project, was one of the conservative groups involved in organizing "town hall protests" and "recess rallies" where participants oppose health care reform by rambunctiously shouting down members of Congress while they are holding public meetings to inform the public about the proposals.[citation needed]

AFP started a group called "Patients First" to oppose health care.[7] Patients First conducts bus tours around the country to create opposition to health care reform. Americans for Prosperity/Patients First visit cities and speaks to rally people and encourage them to oppose health care reform.

AFP has been accused of likening Democratically-proposed health care reform to the regimes of Mugabe, Hitler, Stalin, and Pol Pot as the SEIU-produced video here demonstrates. A speaker at an AFP co-sponsored event in Pueblo, Colorado repeated the discredited conservative idea that Democratic health care reform will mandate physician-assisted suicide or death for older members of society. "Adolf Hitler issued six million end of life orders -- he called his program the final solution. I kind of wonder what we're going to call ours," he said. The speaker further advises audience to "go to offices of members of Congress and put the fear of god in them." [41]

Anti-Astroturf signs

After being accused of astroturfing for corporate interests, Americans for Prosperity volunteers started making hand-made signs for rally participants to have more of an appearance of an actual grassroots crowd. Many of the pre-made signs had small “AFP” markers on them. Speakers at AFP rallies started mocking the "AstroTurf" and "Brooks Brothers" themes in nearly every speech at the rallies.[42]

2010 campaigning

What Will Government Run Health Care Actually Look Like?

A week before the Nov. 2, 2010 mid-term elections, AFP began running an ad featuring a Canadian resident, identified on the AFP website as Shona Holmes, who said she developed a brain tumor in Canada and would be dead if she had relied upon the country's state-run health care: “Many Americans wonder what the new health care bill will do. Well, I know. If I had waited for treatment in my government-run health care system, I’d be dead.” The ad does not mention that the U.S. health care bill does not, in fact, legislate public health care.

AFP reports that "the $607,000 ad buy will run on National cable networks starting today [Oct. 27, 2010] and continuing through November 1st." On the ad, AFP President Tim Phillips said: “Our health is too important to leave in the hands of a government bureaucrat. Shona is a sobering example of how patients in other countries look to the U.S. for more choice and availability in health care when their own government-controlled systems fail.”[43]

According to the Ottawa Citizen, Holmes' "brain tumour" was actually a Rathke's Cleft Cyst on her pituitary gland. On Holmes, the John Wayne Cancer Center stated: "Rathke's Cleft Cysts are not true tumors or neoplasms; instead they are benign cysts."[44]

Global Warming

Hot air tour

During 2008, Americans for Prosperity ran its Hot Air Tour campaign, a hot air balloon cross-country tour with the slogan, "Global Warming Alarmism: Lost Jobs, Higher Taxes, Less Freedom." According the the Hot Air Tour website, "Climate alarmists have bombarded citizens with apocalyptic scenarios and pressured them into environmental political correctness. It's time to tell the other side of the story. Americans for Prosperity is working hard to bring you the missing half of the global warming debate. What will the impacts of reactionary legislation be for you, your family and our economy?"[45]

AFP has received millions from fossil fuel interests, including $5 million from Koch Industries foundations.

Influence over House energy and commerce committee chair Fred Upton

In early January 2011, House Energy and Commerce Committee chair Fred Upton coauthored a Wall Street Journal op-ed with Tim Phillips, the president of Americans for Prosperity, about new EPA regulations to curb greenhouse gas emissions. They wrote that the EPA "presumes that carbon is a problem in need of regulation. We are not convinced." They also said the carbon regulation rules are "an unconstitutional power grab that will kill millions of jobs." Koch Industries was among Upton's top contributors in the 2010 election cycle, along with several other energy companies.[46]

In the past, Upton has advocated taking action on global warming: "I strongly believe that everything must be on the table as we seek to reduce carbon emissions," he once stated on his website, which has since been removed. Following the 2010 Tea Party-aided Republican takeover of the House and a heated fight for the chairmanship of the energy and commerce committee, Upton's position on climate change has veered closer to those of global warming skeptics, like most Republican congressional members. Upton is considering using the Congressional Review Act to block the EPA's new regulations on greenhouse gas emissions, in which Congress can overturn regulations from the executive branch within 60 days of their publication in the Federal Register, although the President retains the right to veto.[46]

Anti-economic stimulus stance

Beginning in 2009, Americans for Prosperity launched the website nostimulus.com, a grassroots website intended to address concerns regarding government spending and growth. [47] The site also contained a petition against the American Recovery and Reinvestment Act that became so popular that it crashed the website in early February 2009.[48]

Anti-Military and Economic Lobbying

In North Carolina, AFP lobbied for a bill (H810) that would raise the interest rate of some small loans by almost 40 percent. The News-Record reports: "Interest rates for some small consumer loans would more than double under a bill that cleared the House banking committee Thursday — despite opposition from consumer groups and top commanders of the state’s military bases. Opponents of the bill say the vote came after pressure from Republican leaders on behalf of an industry that helped bankroll the GOP takeover of the chamber. Backers of the bill say small lenders haven’t been able to raise their rates or fees since 1983, meaning they’re working on slim profit margins. Such lenders are typically store-front operations who will loan to people who don’t have access to credit cards and want loans smaller than banks are willing to make."

Some of the biggest opponents of the bill are military commanders, who spoke out against the bill. The News-Record reports that: "“Soldiers get themselves in financial trouble with high-interest installment loans, and then we have to pick up the pieces,” said Col. Stephen Sicinski, the garrison commander for Fort Bragg. Speaking after a committee meeting a week ago, Sicinski said soldiers can lose their security clearances and ability to work if they get into financial problems. That’s because they are deemed a security risk for getting bribed. The bill has faced a tumultuous path through the General Assembly this year and has had numerous stops and starts. Banking Committee chairman Johnathan Rhyne, a Lincolnton Republican, pulled the measure last week after remarks from Sicinski curdled support."[49]

Apparently, $140,370 was given in campaign donations from "lenders that make small installment loans and their PACS that went to Republican candidates or campaign funds during the 2010 election cycle. At the same time, the lenders shifted support away from Democratic leaders."[50]


The AFP website for the North Carolina branch lobbied for support of the bill with an announcement titled, "Why We support the Consumer Finance Act." It states that the bill would "update a 28-year-old law governing consumer loans in North Carolina by providing more flexibility for borrowers and lenders. Consumer finance lenders serve an important gap in the financial sector by providing lending options to North Carolina’s underserved middle class. The average consumer finance loan borrower in North Carolina has an annual income of $55,000-$75,000."


State budget lobbying

"According to the Americans for Prosperity Web site, some 28 Republicans in the Wisconsin Legislature signed a 'no tax increase' pledge with the organization," along with two Democrats, wrote Dave Zweifel in October 2007. He blamed pressure from no-tax groups on delays with Wisconsin's state budget, more than three months overdue. When these legislators "already had announced they had closed their minds -- even to an increase in cigarette taxes to expand health care to kids -- how really could there be compromise?" he asked. [51]

Americans for Prosperity, which held an anti-tax rally in Madison on October 17, 2007, [52] has also been active in other states. In March, Americans for Prosperity put pressure on Kansas legislators as they debated their state budget. The group patched in calls from residents to legislators' offices, but "they weren't quite clear why they were calling in," said one office assistant, referring to the callers. "Something about state spending," but the Kansans "couldn't tell her who had made the call or any specifics on what they were told," reported the Capital-Journal in Topeka. [53]

Election 2010 activities

Automated phone calls promoting seven rallies. Stated objective is to send a message to Senator Boxer. The phone call implies that they oppose Senator Boxer's re-election. This may be a violation of their non-political 501(c)(3) tax status.

Claims that Senator Boxer's support for cap-and-trade climate legislation will result in much higher prices for gasoline and electricity and less jobs. Rallies in Carson City, Reno, Las Vegas, Henderson, Nevada and Sacramento, Fresno, Bakersfield, California from June 15th to June 17th, 2010[54].

Americans for Prosperity and the Tea Party

According to a 2010 article on Koch Industries and the billionaire Koch brothers in The New Yorker, the advocacy wing of Americans for Prosperity organized a July 4th 2010 weekend summit called Defending the American Dream in Austin, TX. Five hundred people attended the summit, which The New Yorker said served, in part, as a training session for Tea Party activists in Texas. An advertisement cast the event as a populist uprising against vested corporate power: “Today, the voices of average Americans are being drowned out by lobbyists and special interests. But you can do something about it” without making any mention of its corporate funders. The White House has expressed frustration that such sponsors have largely eluded public notice - David Axelrod, President Obama’s senior adviser, said, “What they don’t say is that, in part, this is a grassroots citizens’ movement brought to you by a bunch of oil billionaires.”[55]

Reports indicate that the Tea Party Movement benefits from millions of dollars from conservative foundations that are derived from wealthy U.S. families and their business interests. Is appears that money to organize and implement the Movement is flowing primarily through two conservative groups: Americans for Prosperity and FreedomWorks.

In an April 9, 2009 article on ThinkProgress.org, Lee Fang reports that the principal organizers of Tea Party events are Americans for Prosperity and Freedom Works, which it described as two "lobbyist-run think tanks" that are "well funded" and that provide the logistics and organizing for the Tea Party movement from coast to coast. Media Matters reported that David Koch of Koch Industries was a co-founder of Citizens for a Sound Economy (CSE). David Koch was chairman of the board of directors of CSE.[56] CSE received substantial funding from David Koch of Koch Industries, which is the largest privately-held energy company in the country, and the conservative Koch Family Foundations, which make substantial annual donations to conservative think tanks, advocacy groups, etc. Media Matters reported that the Koch family has given more than $12 million to CSE (predecessor of FreedomWorks) between 1985 and 2002.[57][58]

RightOnline

In July 2008, Americans for Prosperity hosted RightOnline, a conference of conservative bloggers in Austin, Texas. The conference brought together conservative activists to develop strategies to counter left-wing bloggers and develop conservative "New Media" techniques. The meeting was held in conjunction with the Texas AFP chapter's conference.[59][60]

2011 Campaign against Detroit's New International Trade Crossing bridge project

On June 6, 2011, members of Americans for Prosperity posted fake eviction notices to homes in Southwest Detroit as part of their campaign against a publicly built bridge across the Detroit River.[61] The shock campaigning generated outrage among local legislators and journalists, with State Representative Rashida Tlaib complaining that the fear mongering tactic has created chaos in an already socioeconomically stressed neighborhood, and Detroit Free Press Editor Stephen Henderson labeling the pamphleting "substantively shameful," "contextually inexcusable," and "emotionally [manipulative]."[62][63] The Michigan director of Americans for Prosperity, Scott Hagerstrom, said the group's actions were "meant to startle people" and call their attention to the bridge development project, which will remunerate displaced homeowners despite AFP claims that all local residents stand to be evicted. According to Stephen Henderson, "In an area like Delray where values are so depressed, property owners bargain for more in a public development project than they'd ever get selling their places on the market."[64] Henderson compared the distribution of the fake eviction notices, which he described as "emotional terrorism," to the blockbusting of the mid-20th century, when bigoted realtors and building developers hired black families to pretend they were moving into a neighborhood, creating panic among white families who then sold their properties at bloated prices.[65]

Funding

On its website, Americans For Prosperity states that "AFP gets its support from individuals and corporations which share its vision." However, it does not disclose which corporations fund its operations.[66]

Koch Funding

Kevin Grandia, of DeSmogBlog, who has researched funding the AFP states on his blog that:

The AFP is the third largest recipient of funding from the Koch Family Foundations, behind the Cato Institute and the George Mason University Foundation.

Before 2003, when the AFP was still named the Citizens for a Sound Economy Foundation, it received $18,460,912 in funding. 84% of that funding came from the Koch Family Foundations ($12,906,712) and the Scaife Family Foundations ($2,510,000).

Koch Family Foundations is funded by the billionaires who lead Koch Industries. According to Forbes, Koch Industries is the second largest privately-held company, and the largest privately owned energy company, in the United States. Koch industries has made its money in the oil business, primarily oil refining. Presently, it holds stakes in pipelines, refineries, fertilizer, forest products, and chemical technology.

Americans for Prosperity is also connected to oil giant ExxonMobil. According to ExxonSecrets, between the years 1998-2001, Citizens for A Sound Economy and Citizens for a Sound Economy Foundation received $380,250 from ExxonMobil.[67]

More information about disclosed contributions to AFP from Koch-controlled foundations can be found on the Koch Family Foundations page. Contributions directly from Koch Industries or David and Charles Koch are not disclosed.

In 2010, AFP received $1,924,000 from the Center to Protect Patients' Rights, a Koch-connected 501(c)4 that acted as a conduit for around $55 million in secret funding distributed to other nonprofit groups that attacked Democrats in the 2010 elections.[68] [69]

Other Funding

Media Transparency notes that Americans for Prosperity Foundation has received seven grants totaling $1,181,000 between 2004 to 2006. Grants to the foundation have included:[70]

In its 2007 annual IRS return, the AFP Foundation's reported that its revenue was $5,695,000 with expenditure of $6,768,000. While the AFP Foundation ran at a loss of $1,072,000, it had a further $507,000 in reserves. Of its expenditure, $2,129,000 was spent on national office operations with just over $2.9 million allocated to the state-based chapters.[71]

Income for the Foundation since its formation in 2003 has been[71]:

  • 2003: $3,451,636
  • 2004: $1,190,470
  • 2005: $3,600,966
  • 2006: $4,223,218

Anonymous contributors gave the AFP $22 million in 2010, according to IRS records - triple the amount it raised in 2008.[72]

Tax filings

AFP told the IRS in a 2011 tax form that it does not spend revenues on political activities, an assertion that would free it from filing any information with the tax agency about election-related expenditures. The IRS allows AFP and other advocacy groups holding the tax-exempt status of 501(c)(4) to run political advertisements naming candidates, criticizing their positions and urging voters to elect or oust them. But those groups can't direct more than half of their annual spending toward politics, or they would be bumped into another tax section -- the 527 category, where groups have to pay federal taxes on their income and, more critically, disclose the donors who are bankrolling their political campaigns.

The filing came after the group disclosed spending $1.3 million on dozens of radio spots and several television ads with the Federal Election Commission. The group helped fund air radio ads in 42 congressional districts and television commercials in Arkansas, North Carolina and Virginia before the 2010 elections, according to the Center for Responsive Politics. All but two of the ads targeted Democrats. Tax experts say the IRS could look for other AFP activities that might amount to political engagement, like rallies, mass mailings and phone banks.[73]

State and Local Involvement

An off-shoot of Americans for Prosperity is The Prosperity Network. The state chapters and their leaders and activities are hard to track, as is where the chapters get their money. Looking at the Wisconsin Prosperity Network chapter is a good illustration of how the Network works on a state and local level.

Information is surprisingly scant for an organization with so many high-profile members and funders. As of March 2011, there is no Web site (it looks as if it was taken down)[74] and the only contact information found is the email address: info@wisconsinprosperity network.com[75]

Mark Pitsch, a reporter at the Wisconsin State Journal, wrote an in-depth article in May 2009 about the then newly-formed Wisconsin Prosperity Network. In the article, Pitsch describes the group as, "dubbed the Wisconsin Prosperity Network, the effort calls for an annual budget of $6.4 million and the creation of 14 new organizations, according to a draft outline of the network obtained by the State Journal."[76] The draft shows that these groups, existing outside of the Republican National or State Parties, recruits local and state candidates, mobilizes voters, uses lawsuits to advance conservative issues in court, researches public policy issues and fights perceived media bias towards the left.

Not all of the 14 groups are known, but one of the first ones to be established was the MacIver Institute, a right-wing think tank named after Republican operative John MacIver. Also, Fight Back Wisconsin and Refocus Wisconsin (a part of The Wisconsin Policy Research Institute, Inc., of which James R. Klauser is Chairman, as well as a major supporter of WPN) are both listed on the Americans for Prosperity - Wisconsin Web site.[77][78]

First Freedoms Foundation[79] is another group on the AFP-Wisconsin Web site that has a similar Board Member as reported by the Wisconsin State Journal article, "New Wisconsin Prosperity Network group would push GOP causes."

Local and State Leaders

The leaders of Wisconsin Prosperity Network are difficult to find, but Pitsch obtained a list that is in his article. The following are known members of WPN:[80]

  • James Klauster - Klauster is a GOP power broker and top aide to former Gov. Tommy Thompson. He is also a Chairman on the The Wisconsin Policy Research Institute Inc. board and Senior Vice President at Wisconsin Energy Corp. He was a consultant from 1992 to 1996 for the Republican National Committee and Republican Governors Association, a General Chairman of the Thompson for Governor Committee, Co-Chairman of the Bush for President-Wisconsin committee in 2000 and as Chairman in 2004.[81]
  • Michael Grebe - Grebe is the Bradley Foundation President and Chairman of the Republican Party of Washington.He also served on the Commission on Judicial Elections and Ethics board in 1997.[82] Grebe is also the former boss of Barack Obama at Foley & Lardner LLP.[83]
  • Fred Luber – Luber is a businessman and the founder and chairman of Super Steel Corp. He also is a MacIver Institute Chair, was a Scott Walker Campaign Finance Co-Chair and founder of the Anne And Fred Luber Foundation. He also served on the Commission on Judicial Elections and Ethics board in 1997.[84]
  • Mark Block – President of Americans for Prosperity Wisconsin chapter, Main organizer of Wisconsin Prosperity Network, on the Board of Directors of the MacIver Institute and the First Freedoms Foundation. In 2008, Block was appointed a member of the Wisconsin Advisory Committee to the U.S. Commission on Civil Rights. He was also a consultant and fundrasier in the past with Mark Block and Associates, and did fundraising and consulting for Presidential candidates like George W. Bush and Governors like Tommy Thompson and Wisconsin Supreme Court Justices Janine Geske and Jon Wilcox. The Wilcox campaign that Block managed holds the record for the highest paid election law penalties in Wisconsin history. Block settled the case brought against him in 2001 by the State Elections Board for illegal campaign activity - illegally raising $200,000 with a front group pretending to operate independently from a political party. Block paid $15,000 in fines and had to stay away from Wisconsin political campaigns for three years; The leader of the front group paid $35,000 and was banned from Wisconsin politics for five years; And Jon Wilcox paid $10,000 in fines.[85] Block was also involved in a "voter caging" controversy in Wisconsin during the 2010 elections.[86]
  • Scott Jensen – Jensen is the former Chief of Staff for Tommy Tompson between 1990 to 1992. He was voted into the Wisconsin State Assembly from 1991 - 2006. Jensen was the former Assembly Speaker from 1995 - 2002. He is also an advisor on the American Federation for Children Government Team.[87][88] Jensen was convicted of three felonies and a misdemeanor in 2002, facing prison time for "misconduct in public office on accusations of using state resources and state workers to campaign for Assembly Republicans in 1998 and 2000 elections."[89] In 2010, Jensen reached a plea deal after his original sentence was overturned for a technicality.[90] The Milwaukee Journal Sentinel reported that "Jensen resolved the criminal case against him involving misconduct in office charges by agreeing Monday to pay a $5,000 civil forfeiture and reimbursing the state $67,174 in legal fees initially borne by taxpayers, according to a plea deal."[91]

Political Donations from Leaders

The leaders of Wisconsin Prosperity Network are very involved with funding candidates and Republican/Tea Party front groups. The following list is not extensive, as campaign contributions are always hard to track.

  • Mark Block has given $5,643.19 to Wisconsin politicians since 1992.[92]
  • Scott Jensen has given $3,090 to Wisconsin politicians since 1992.[93]
  • Fred Luber and his wife Anne has given $114,973 to Wisconsin politicians since 1992.[94]
  • Michael Grebe and his wife Margaret have given $120,850 to Wisconsin politicians since 1992.[95]
  • James Klauser and his wife Shirley have given $96,683.45 to Wisconsin politicians since 1992.[96]

Complaints About AFP's Activities

On February 23, 2012, Wisconsin democrats filed a complaint with the Government Accountability Board and the Internal Revenue Service about AFP's activities in the state. The complaint was issued in response to comments made by David Koch in an interview with the the Palm Beach Post. Koch acknowledged his efforts to aid Scott Walker's campaign to win the likely recall election he will be facing this spring, stating that "We've spent a lot of money in Wisconsin. We're going to spend a lot more." As a 501(c)(3), AFP is not allowed to engage in "activities which constitute participation or intervention in a political campaign on behalf of or in opposition to a candidate," so Koch's comments suggest that AFP's activities may be unlawful.[97] Democratic Party Chairman Mike Tate also called on television stations airing AFP ads to immediately remove the ads from their broadcasts. [98]

Personnel

Staff

The first president of Americans for Prosperity was Nancy Pfotenhauer who, prior to the groups foundation in 2003, had been an executive with the Citizens for a Sound Economy Foundation.[99] Pfotenhauer later left AFP and in 2007 joined the John McCain campaign. Pfotenhauer was simultaneously the president of the Independent Women’s Forum. From 1996 to 2001, Pfotenhauer was the director of the Washington office of Koch Industries.[100][101]

A full staff list can be found at Americans for Prosperity - National and State staff The following are the key AFP staff members.[102]

National staff

State staff

Board of Directors

The following are listed as members of the Americans for Prosperity board, in the group's 2007 IRS report [71] and/or on its website, as of February 2009: [103]

Former Board members:

Americans for Prosperity Foundation

The Americans For Prosperity Foundation (AFPF) is "a nationwide organization of citizen leaders committed to advancing every individual's right to economic freedom and opportunity. AFPF believes reducing the size and scope of government is the best safeguard to ensuring individual productivity and prosperity for all Americans. AFPF educates and engages citizens in support of restraining state and federal government growth, and returning government to its constitutional limits."[105]

Board members

The members of the Americans for Prosperity Foundation board, as of November 2008, are:[106]

According to Americans for Prosperity's 2007 IRS report, the following employees are common to AFP and AFPF, with AFPF paying the following amounts for their share of salaries and benefits: [71]

  • Michelle Korsmo - AFPF paid $96,883 in salary and $12,651 in benefits in 2007
  • Tim Phillips - AFPF paid $185,843 in salary and $17,236 in benefits in 2007
  • Ed Frank - AFPF paid $62,059 in salary and $5,401 in benefits in 2007

Former Board members:

Contact information

Americans For Prosperity Foundation
1726 M Street NW, 10th Floor
Washington, DC 20036
Phone: 202 349-5880
Toll Free 866 730-0150
Email: info AT AFPhq.org (sub @ for AT)
Web: http://www.americansforprosperity.org

Other websites include:

Articles and resources

Related SourceWatch articles

References

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External resources