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Inside The Secretive Dark-Money Organization That's Fueling Conservative Groups

Inside The Secretive Dark-Money Organization That's Fueling Conservative Groups
Tue, 2/12/2013 - by Walter Hickey
This article originally appeared on Business Insider

An obscure pair of non-profits has funneled hundreds of millions of dollars of anonymous cash into the most influential advocacy groups, think tanks, academic centers and organizers in the conservative movement.

Described by Mother Jones' Andy Kroll as "the dark money ATM of the right," Donors Trust and sister group Donors Capital Fund have fueled the conservative movement by serving as middlemen between conservative donors with a desire for secrecy and groups in need of operating revenue.

"Over the past decade," Kroll writes, "it has funded the right's assault on labor unions, climate scientists, public schools, economic regulations, and the very premise of activist government."

The impact has been stunning. Between 1999 and the present day, Donors Trust and Donors Capital Fund have distributed more than $400 million to over 1,000 conservative and libertarian groups.

According to Kroll's investigation, Donors Trust is fueled by 200 anonymous funders. While the structure of the group is such that nobody besides the donors and the Trust will ever know their donor identity, Kroll managed to identify several donors — Charles Koch gave $2 million in 2010, the DeVos family charity kicked in $2.5 million from 2009 to 2010, and the Bradley family gave $650,000 from 2001 to 2010.

The Board of Directors of the trust decide where the money is spent, and is comprised of the president of the American Enterprise Institute, the vice president of the Heritage Foundation, the president of the Institute for Justice and the director of the Acton Institute, each a conservative or libertarian heavyweight.

Thanks to Kroll, we now have access to Donors Trust's Fiscal Year 2011 tax forms. That year, the group funneled $39.3 million from the anonymous donors to dozens of conservative organizations.

The level of institutional support for some of the organizations is astounding. In 2011, several groups received donations which comprise large portions of their operating revenue.

For instance, the Committee for a Constructive Tomorrow — a group that lobbies against climate science — received an approximate total of $3 million in grants in 2011, according to their tax form. Nearly $1.2 million of that — 40 percent — came from Donors Trust.

The NFIB Small Business Legal Center — a legal adversary of the Affordable Care Act and government regulation — received a total $3.1 million in grants in 2011, of which just over $2 million was provided through Donors Trust.

The conservative Public Notice Research and Education Fund took in $1,821,000 in grants in 2011, $1,244,000 of which — almost 70 percent — came from Donors Trust.

While Donors Trust is a sophisticated middle man, the related group that oversees asset management investment is the nonprofit Donors Capital Fund. This group finished 2010 with $32.4 million in assets after dispensing $41.1 million in grants.

Donors Capital Fund also made several multi-million dollar contributions to firms in their most recent reported fiscal year, 2010.

Here are some of the largest conservative beneficiaries of Donors Capital Funds in 2010:

The untraceable money also funds conservative academics that can't get funding from the traditional grant process.

The groups both send money to many colleges — Harvard University, Notre Dame, University of Virginia and many others — with the intent to fund different research projects and post doctoral studies that often coincide with the conservative aims of DonorsTrust.

In 2010, DonorsTrust sent $520,000 to the George Mason University Foundation Law and Economics Center, and the Mercatus Center at George Mason University received another $921,000. Donors Capital Fund sent an additional $500,000 to the GMU Foundations and a further $243,500 to Mercatus.

According to the New Yorker, The Mercatus Center was first founded and funded by the billionaire conservative Koch Brothers, and the small think tank advocates environmental deregulation. The Wall Street Journal called it "the most important think tank you've never heard of."

All told, anonymous donors gave $1.2 million to the conservative Mercatus Center directly and $1 million to George Mason University Foundation through DonorsTrust.

Donors Trust also provided the Seattle-based Discovery Institute, which promotes creationism, with $750,000 in grants in 2011.

To comprehend the scale of the Donors Trust operations, contrast the groups output with super PACs in the 2012 election cycle. In 2010 alone the groups funneled $63.3 million in anonymous dark money to conservative and other groups.

Even compared to SuperPAC spending in the 2012 election, that's huge. The Donors Trust funds gave more money than Club For Growth Action, FreedomWorks, Young Gun Action Fund, Endorse Liberty and Winning Our Future spent in 2012 combined.

Donors Trust is crucial for funding opponents of climate science. Kroll points to this study by Robert Brulle, a Drexel University sociologist:

In 2003, Donors Trust money was the source of 3 percent of the funding for more than 100 conservative groups whose financial records Brulle has studied. By 2010, that percentage had grown to 24 percent. Brulle surmises that financial underwriters of the climate counter-movement and the conservative agenda writ large give through Donors Trust to wipe their fingerprints off donations to Heartland [Institute] and others.

While super PACs inspired outrage during the 2012 election, Donors Trust and Donors Capital Fund have been operating in the open for a decade.

"DonorsTrust makes grants only to other publicly supported 501(c)(3) organizations," Whitney Ball, the President and CEO of DonorsTrust said via email, "and as a condition of accepting any grant the grant recipient must agree that grant funds will not be used for lobbying or other political purposes."

The trouble is a vast amount of the recipients of DonorsTrust dark money are, by their very nature, political. And unlike the donors behind super PACs, the identities of the 200 donors will not be known under the current disclosure system.

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