Inside the Dark-Money Group Fighting Reform in Montana and Beyond

The secretive American Tradition Partnership has ushered in a new era of "funny money with no legal constraints" in Big Sky Country. And it's just getting started.

Montana Statesman Montana StatesmanA story attacking Montana attorney general and Democratic gubernatorial candidate Steve Bullock, published by the American Tradition Partnership on its Montana Statesman "news" website. Montana Statesman

This story also appears on the website of the Center for Public Integrity.

Voters haven't had a clue who is behind American Tradition Partnership—the Colorado-based group pushing to rewrite Montana's campaign finance laws—and that's just the way the secretive nonprofit wants it.

A 2010 fundraising pitch to its donors promised that "no politician, no bureaucrat, and no radical environmentalist will ever know you helped," and "the only thing we plan on reporting is our success to contributors like you."

"Montana has very strict limits on contributions to candidates," reads the document, obtained by the Center for Public Integrity. "…but there is no limit to how much you can give to this program."

As for the state's ban on corporate money in elections? "Corporate contributions are completely legal," the pitch assures potential funders. "This is one of the rare programs you will find where that's the case."

"You can get some traction with that pitch," says Dennis Unsworth, who led the state's investigation of the group in 2010 which unearthed the document. "If you can offer to influence the elections outside the law, that's a great calling card."

For three election cycles, American Tradition Partnership has plastered the state with mailers attacking "radical environmental groups" and moderate Republicans.

While ATP's funders are still mostly a mystery, the Center for Public Integrity has identified the secretive organization's founding donor—an anti-union owner of Colorado's largest furniture chain—and discovered a long list of affiliations with national tea party groups funded by the conservative billionaire Koch brothers.

This election, ATP has vowed to keep Attorney General Steve Bullock out of the governor's mansion. In October, voters received a brazen multipage newspaper-style ad placing the Democratic candidate in a photo lineup with three registered sex offenders.

But the group hit the national spotlight thanks to three landmark court battles with Bullock and the state of Montana.

When the US Supreme Court invalidated bans on corporate spending in 24 states in the Citizens United decision, Montana held fast to its law. ATP sued to overturn it, facing off with Bullock at the state's high court. In June, the nonprofit prevailed on appeal to the nation's highest court.

ATP is pushing past its Citizens United challenge with two more suits to eliminate Montana's low contribution limits and disclosure rules, setting up a potential challenge to contribution limits nationwide.

ATP is pushing to eliminate Montana's contribution limits and disclosure rules, setting up a potential challenge to contribution limits nationwide.


Tea Party Ties

One of ATP's founders is former Montana congressman Ron Marlenee, who served from 1977 until the state dropped from two House seats to one in 1992. Marlenee used his DC Rolodex to raise money for the fledgling pro-energy group, which registered in Colorado in 2008.

Marlenee rallied a tea party crowd in Bozeman in 2010, appearing on stage with a half-burned American flag, which he says he wrestled away from a "liberal Marxist" protester.

ATP has joined tea party lobbying efforts, signing at least two letters to Congress in the last year urging an end to tax credits for wind power and natural gas-fueled vehicles.. The letters were signed by Koch-funded groups including Americans for Prosperity and tea party boosters FreedomWorks, Club for Growth, and Art Pope's John Locke Foundation.

In its 2008 application for tax-exempt status as a 501(c)(4) "social welfare" organization, ATP listed its "primary donor" as Jacob Jabs, Colorado's largest furniture retailer and a donor to Republican candidates and causes. Jabs made a $300,000 contribution to get ATP on its feet, according to IRS records obtained by the Center for Public Integrity.

Jabs, through a spokesman, on Monday said he did not make a donation and has "never heard of" ATP or the group's previous incarnation.

"He did not commit to the funds indicated by Athena Dalton in the filing so clearly he did not give them funds," wrote Charlie Shaulis, director of communications for American Furniture Warehouse, Jabs' company, in an email to I-News Network in Colorado.

Dalton wrote a letter to the IRS asking the agency to speed up the process for awarding it nonprofit status. The letter states that the approval was needed quickly, otherwise Jabs would not make a contribution. The agency gave it the thumbs up four days later.

The gift doubles Jabs' total federal contributions since 1997, which have gone exclusively to Republican candidates and party organizations, according to FEC records.  

Jabs also poured money into a failed right-to-work ballot initiative in Colorado, becoming the "spokesman" for the 2008 anti-union effort.

ATP shares resources and DC office space with an affiliated 501(c)(3) educational nonprofit called the American Tradition Institute (ATI), which works in tandem with a network of Koch-funded think tanks to oppose wind energy and climate science. It has launched lawsuits against state mandates for renewable energy usage, and targeted climate scientists in academia.

The libertarian Koch brothers, Charles and David, have become better known in recent years with the rise of the tea party. They are principal owners of Koch Industries Inc., the second-largest privately owned company in the United States with major investments in the energy industry. 

ATI has accepted donations from the Atlas Economic Research Foundation, a free-market think tank underwritten by ExxonMobil and Koch foundation money, according to a report by the Institute for Southern Studies.

Its director of litigation, Chris Horner, is also a fellow at the Competitive Enterprise Institute, a free-market think tank that has taken a half million dollars from Koch foundations since 1998, according to the report.


"We Won't Be Shut Up"

In 2008, American Tradition Partnership flooded Montana with mailers attacking 10 state legislators, but reported only $12,000 in spending for the entire election.

An investigation by the state's Commission on Political Practices concluded that the group had broken state law requiring outside spending groups to register as political action committees and disclose all donors and spending.

In 2010, Montana's Commissioner of Political Practices concluded that ATP had registered a "sham organization" to attack 10 state legislators.

Commissioner Unsworth concluded in October 2010 that ATP had registered a "sham organization" called the Coalition for Energy and Environment, and vastly underreported its activity. The PAC's reported spending, said the state, would have barely covered the cost of postage for the raft of glossy, full-color mailers ATP sent out.

ATP filed forms with the IRS the same year reporting more than $600,000 in spending.

ATP maintains that its spending on mailers, most targeting moderate Republicans running for state legislative seats, is "educational" and therefore falls outside the state's definition of "express advocacy" that would require it to disclose its funders and its spending on the mailers.

ATP did not face penalties and did not disband. Instead, it changed its name from Western Tradition Partnership and sued to strike down Montana's disclosure laws.

The case is set for trial in March 2013.

"We won't be shut up or shut down," ATP said in a press release.

Ironically, ATP's years-long court battles have pushed the group into the public spotlight, threatening the secrecy of its donors. The group has vigorously resisted discovery proceedings in court, missing several deadlines to produce evidence requested by the state.

Lawyers in Bullock's office filed a motion to compel ATP to present evidence, including bank records, or drop their lawsuit. It has not complied. ATP's lawyer Jim Brown wrote to the state's lawyers in early September, explaining, "I have a difficult client."

Nonetheless, the state has won access to bank records for the organization. If a judge makes them public, they could offer voters a first glimpse at the group's funders.

 

"Plausible Deniability"

The group rarely communicates with the press and it hires unknowing lawyers to sign campaign finance reports and its 2008 nonprofit incorporation documents in Colorado.

Scott Shires has been sued, indicted, and fined for his election activities, but the Colorado-based political consultant says his reputation really took a hit after he signed ATP's forms. When Montana released the results of its 2010 investigation, Shires' name began showing up in the press, and he says he cut ties to the organization.

"The operatives writing these stupid ads and mailings don't want to be identified," Shires said. "I was the screen that allowed them to hide—plausible deniability is something a lot of these groups are interested in."

Shires listed himself as "President" of ATP when he signed the group's request for exempt status with the IRS in 2008.

He is widely known for registering hundreds of political committees in Colorado, mostly Republican groups. The work involves some risk. He pled guilty to filing false tax returns for a client in 2008, a misdemeanor charge. He was also caught up in former Colorado candidate for US Senate Bob Schaffer's 2008 campaign finance scandal.

ATP Executive Director Donald Ferguson did not return numerous calls for comment.

The group raises money with the promise that "no politician, no bureaucrat, and no radical environmentalist will ever know you helped make this program possible."


"Not Really Sure Who Is in Charge"

The left-leaning Montana Conservation Voters claims ATP was unfazed by the 2010 investigation and is "right back to doing the same thing," according to the group's board member Ben Graybill, who filed the original complaint.

This year, ATP has registered a PAC in the state. It sent mailers prior to the June primary election, but has reported zero spending to the state.

Its filings are signed by Montana attorney Chris Gallus, who was "surprised" to receive a call from the Center regarding ATP. He claims no leadership role in the organization, and said he's "not really sure who is in charge."

Gallus said he has not been contacted by ATP since being hired to sign their PAC reports, and does not anticipate filing any spending reports on their behalf. "Until that changes, my involvement is the same as the date I signed their forms."

The organization sent out a questionnaire to candidates in early October, asking about their stance on land development and environmental regulations in resource-rich Montana.

"Will you oppose legislation which would categorically limit development of any specific energy resource?" reads one. "Will you oppose legislation that would rescind, reduce or shorten the tax holiday on oil & gas wells?" reads another.

Candidates who don't respond, or don't respond with answers favorable to ATP's interests, are often targeted by a direct-mail campaign similar to those launched at Bullock.

Its adversary, the Montana conservation group, endorses candidates for the state Legislature who align with its mission to "protect clean water, public health, and our incredible outdoor heritage." Its mid-October mailers praise Bullock for leading "the fight against corporate control of our elections."

Unlike ATP, the group reports its direct and independent spending to the state and lists its donors.

"They're scofflaws," said Theresa Keaveny, executive director of the Montana conservation group.

Keaveny says ATP is not only in violation of Montana law, but also IRS rules for (c)(4) groups that dictate ATP must not spend a majority of its funds on political activity.

According to its 2008 application for exempt status, obtained by the Center, ATP promised not to "spend any money attempting to influence" elections. It also promised not to "directly or indirectly participate or intervene on behalf of or in opposition to a candidate for public office."

It would, however spend "70 percent" of its time and resources to "educate citizens" about "land and resource development issues."

It also revealed the Jabs contribution. Jabs could not be reached for comment.
 

"Funny Money With No Legal Constraints"

Bullock, a Democrat, is running against Republican Rick Hill, a Republican. It's expected to be a close race despite Montana's majority-Republican voting population.

"We want citizens deciding elections, not corporations," said Bullock in an October debate during which he touted his record as a campaign finance crusader.

Montana has won access to ATP's bank records. If a judge makes them public, they could offer voters a first glimpse at the group's funders.

While outside spending groups, including the Republican and Democratic governors associations, have swarmed the state with ads, the two candidates have had to abide by Montana's low contribution limits—for most of the campaign.

In October, ATP made national news when a federal judge agreed with the organization and its high-profile campaign finance lawyer, James Bopp, and struck down contribution limits on individuals, PACs, and parties—including the $630 cap on individual giving to Bullock and Hill.

"The political establishment can no longer tell citizens to shut up because they've reached their speech limit," said ATP Montana Director Doug Lair in a press release.

Montana joined the ranks of 12 other states with no limits on contributions to candidates, but only temporarily. A week later, a federal appeals court stayed the lower court decision pending a full appeal, putting the state's contribution limits back in force.

Bullock's opponent took advantage of the six-day free-for-all between the ruling and the stay, accepting a $500,000 contribution from the state's Republican Party. The gift dwarfed Montana's $22,600 limit on party giving to candidates.

A month before the vote, Montana residents woke up to a fake newspaper on their doorstep called the Montana Statesman.

The publication calls itself "the largest and most trusted news source" but is actually a series of ATP-funded attacks on Bullock. It leads with a giant headline that reads "Bullock Admits Failure."

The "news" story below claims that the attorney general has let "1 in 4 sex offenders go unregistered." It includes four photos: three registered sex offenders and Bullock.

The group continues to raise money on the promise that "no politician, no bureaucrat, and no radical environmentalist will ever know you helped make this program possible," as its 2010 briefing to donors reads. "You can just sit back on election night and see what a difference you've made."

Unsworth says his 2010 investigation did not stop ATP, and outside spending that has already flooded the state, is sure to intensify, particularly in light of the Citizens United decision. He calls the advertising a "mess of trash that lays at the feet of the public," paid for by "funny money with no legal constraints."

"We don't know who's saying these crazy things," he added, "so the public has to suffer and our political system suffers as a result."

Update (Oct . 22, 7:00 p.m.): This story was updated to reflect that Jabs, through a spokesman, denied making a contribution to ATP.

The Center for Public Integrity is a nonprofit, independent investigative news outlet. For more of its stories on this topic, click here.

 

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