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Profile: American Future Fund

a.k.a. AFF

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American Future Fund was a participant or observer in the following events:

American Future Fund logo.American Future Fund logo. [Source: American Future Fund / Talking Points Memo]Three citizen watchdog and pro-campaign finance groups, the Center for Media and Democracy, Protect Our Elections, and Public Citizen, allege that the tax-exempt nonprofit group American Future Fund (AFF) is violating tax law by operating primarily as a political advocacy group. AFF was founded and is operated by Nick Ryan, a former campaign advisor for former Senator Rick Santorum (R-PA) and former Representative Jim Nussle (R-IA), and the head of a political consulting firm, the Concordia Group. Ryan also founded a pro-Santorum “super PAC” called the Red, White and Blue Fund. State Senator Sandra Greiner (R-IA) and prominent Iowa Republican Allison Dorr Kleis serve as the organization’s directors. The group states that it advocates for “conservative and free market ideals.” The New York Times will later confirm that Bruce Rastetter, co-founder and CEO of Hawkeye Energy Holdings, a large ethanol company, provided the seed money for AFF in 2008. Investigations by the Center for Public Integrity will also show that the Pharmaceutical Research and Manufacturers of America (PhRMA) contributed $300,000 to the organization in 2010. The group also received $2.44 million from another 501(c)4 group, the American Justice Partnership, which advocates for “tort reform,” and over $11 million from the Center to Protect Patients’ Rights, another 501(c)(4) organization. The Times will find that AFF-supported candidates win 76 percent of the time, making the group “one of the most effective outside spending groups of the 2010 election cycle.” The law allows 501(c)4 groups (see 2000 - 2005) such as AFF to operate without taxation or legal scrutiny as long as they spend the bulk of their resources on “further[ing] the common good and general welfare of the people of the community” and not political advocacy. Moreover, federal election law provides that if a group’s major purpose is electioneering and it spends at least $1,000 to influence elections, it must register as a political action committee (PAC). A New York Times analysis recently showed that AFF spent 56 percent of its television budget on political advertising, and so far has spent $8.8 million on television ad buys. Its ads attack Democratic candidates in Indiana, Iowa, New Mexico, and West Virginia, and expressly tell voters to cast their ballots against these candidates. And the organization’s Web site says it exists to “target… liberal politicians.” The group says it plans to spend as much as $25 million on the 2010 elections. In a press release, Public Citizen says that AFF, “a conservative nonprofit group pouring money into the 2010 midterm elections, appears to be violating campaign finance law.” The three groups file a complaint with the Federal Election Commission (FEC) asking it to decide whether AFF has violated the tax code. If so, AFF would be forced to re-register as a PAC and be subjected to more disclosure requirements, particular who donates to the organization and how much they donate. Craig Holman of Public Citizen says: “American Future Fund is pulling out the stops to ensure that Republicans are elected this November. That imposes on the group the legal duty to register with the FEC and disclose exactly who is funding all those expenditures.” Protect Our Elections spokesperson Kevin Zeese says: “In this first post-Citizens United (see January 21, 2010) election, corporations and their executives are testing the limits of the law and crossing over into illegality. They cross the line when they use nonprofit groups to urge people to vote ‘for’ or ‘against’ a specific candidate. Political committees violate the law when they accept anonymous contributions for their work. These violations of federal election and tax laws need to be challenged now; otherwise we will see even more anonymous corporate donations trying to illegally manipulate voters into voting against their own interests in future elections.” And Lisa Graves of the Center for Media and Democracy says: “Groups spending millions to attack Americans running for office should not be able to use their tax-free status to hide the truth about which fat cats are behind their ads. Voters have a right to know which corporations or millionaires are laundering their profits through nonprofits like the American Future Fund, whose main business seems to be electioneering. We have joined this complaint to demand that the law be enforced and the truth be told.” [Center for Media and Democracy, Protect Our Elections, and Public Citizen, 10/12/2010 pdf file; Public Citizen, 10/20/2010; Mother Jones, 1/28/2011; iWatch News, 6/21/2012] AFF will continue to operate as a 501(c)4 group in spite of the FEC complaint, and will continue to spend heavily on anti-Democratic ads, many of which will be proven to be false by organizations such as FactCheck (.org). More complaints will be filed against the organization, including a February 2011 IRS complaint by Citizens for Responsibility and Ethics in Washington (CREW). [iWatch News, 6/21/2012]

Entity Tags: Center to Protect Patients’ Rights, Red, White and Blue Fund, Center for Public Integrity, Bruce Rastetter, American Justice Partnership, American Future Fund, Allison Dorr Kleis, Public Citizen, Protect Our Elections, Sandra Greiner, Nick Ryan, Federal Election Commission, Kevin Zeese, Craig Holman, Citizens for Responsibility and Ethics in Washington, Concordia Group, Center for Media and Democracy, Pharmaceutical Research and Manufacturers of America, New York Times, Lisa Graves

Timeline Tags: Civil Liberties

The progressive magazine Mother Jones reports on Congressional Democrats’ plans to curb the effects of the Supreme Court’s Citizen United decision, which allows unlimited contributions to campaign organizations by corporate and union donors (see January 21, 2010). Last year, Senate Republicans refused to allow a campaign finance reform bill, the DISCLOSE Act, to come to the floor for a vote (see July 26-27, 2010). Now Democratic leaders say they are considering filing challenges to the nonprofit tax statuses of many of the groups that were so influential in the 2010 elections. Representative Chris Van Hollen (D-MD) tells a Mother Jones reporter about the plan. According to Van Hollen, two of the groups they plan to target are Karl Rove’s Crossroads GPS and the American Action Network (AAN—see Mid-October 2010), headed by former Senator Norm Coleman (R-MN). Together, the two groups spent over $43 million supporting conservative candidates and targeting Democrats, accounting for some 23 percent of all outside conservative spending between them. According to Van Hollen, “People are looking at different legal strategies through the courts because there’s emerging evidence that these groups have abused the rules.” Representative David Price (D-NC) agrees. “I think there are ample goals for challenging the way those groups have acted,” he says. Crossroads GPS spokesperson Jonathan Collegio says in return, “Van Hollen is irresponsibly making claims on zero evidence whatsoever and this is extremely irresponsible for an elected official holding high office.” No one from AAN is willing to respond to the Mother Jones reporting. Both Crossroads GPS and AAN, like many other such groups, are organized under the IRS’s 501(c)4 tax status—tax-exempt, not-for-profit groups whose purpose under the IRS code is “primarily to further the common good and general welfare of the people of the community” (see 2000 - 2005). The law allows such groups to engage in political advocacy, such as running ads for or against candidates, but such “electioneering” activities must not be those groups’ “primary activity.” As far as is known, Crossroads GPS and AAN have no other purpose except electioneering. 501(c) groups do not have to register as political action committees (PACs) and are allowed to conduct their business with very little outside scrutiny. However, if the Federal Election Commission or the IRS determine a group has violated the rules, that group would be forced to register as a PAC and disclose the sources of its funding. If the Democrats challenge the status of these groups, they would be following in the footsteps of private organizations. A coalition of public advocacy groups has filed complaints against Crossroads GPS and another 501(c)4 group, American Future Fund (AFF—see October 12, 2010), claiming that their primary functions are, according to the Crossroads GPS complaint, to “influence the 2010 federal elections and to elect Republicans to office.” The complaints are still pending. In September 2010, Senator Max Baucus (D-MT) asked the IRS to examine several 501(c) groups to “ensure that political campaign activity” wasn’t their primary activity (see September 28, 2010). [Mother Jones, 1/28/2011]

Entity Tags: David E. Price, American Crossroads GPS, American Action Network, American Future Fund, DISCLOSE Act of 2010, Max Baucus, Norm Coleman, Jonathan Collegio, Karl C. Rove, Chris Van Hollen, Mother Jones, US Congress

Timeline Tags: Civil Liberties

A new “super PAC” aligned with presidential candidate Mitt Romney (R-MA) is being formed by a group of Romney backers and former Romney campaign aides, according to a report by the Washington Post. Super PACs are political organizations that exist to influence elections, which take unlimited amounts of outside money from donors, including individuals, unions, and corporations, and pool that money to advocate for or against a candidate (see March 26, 2010). By law, super PACs are supposed to operate independently of a candidate’s official campaign organization.
Restore Our Future - The Romney super PAC, “Restore Our Future” (ROF), is one of a number of such organizations created in the aftermath of the US Supreme Court’s Citizens United ruling (see January 21, 2010). Restore Our Future is apparently the first super PAC to form specifically in support of one of the 2012 presidential contenders, with the sole exception of Priorities USA Action, a super PAC in support of President Obama. ROF treasurer Charles R. Spies, who served as Romney’s general counsel in his 2008 presidential effort, refuses to disclose how much the organization has raised, or who is donating. Spies merely says: “This is an independent effort focused on getting Romney elected president. We will do that by focusing on jobs and his ability to fix the economy.” A Romney campaign aide says that a Federal Election Commission (FEC) filing coming up in July will show the organization having raised some $20 million. A major Romney donor who refuses to allow his identity to be revealed says, “We just want to show that we’ve got more dough than anyone.” The Romney campaign’s communication director, Gail Gitcho, says the campaign welcomes any outside support, and points to the Obama campaign as the largest fundraiser in the race, saying, “We are pleased that independent groups will be active in fighting this entrenched power [the Obama campaign] so the country can get back to work.”
Leaders of ROF - Members of the ROF board of directors include Spies; Carl Forti, political director for Romney’s 2008 campaign; and Larry McCarthy, a member of the Romney media team in 2008. Forti is the co-founder of the Black Rock Group consulting firm and the political director of American Crossroads, a conservative super PAC expected to raise over $120 million for candidates in 2012. Neither Forti nor American Crossroads will discuss the role played by Forti in both organizations. ROF actually registered itself with the FEC in October 2010, but has remained unaffiliated and essentially dormant until recent weeks. Now ROF officials are briefing top donors about the organization’s plans and fundraising goals. Former Obama spokesman Bill Burton, the head of Priorities USA Action, says: “I’m not surprised that there’s even more money coming into this race to help Mitt Romney. He’s a pretty deeply flawed candidate; he’s going to need all the help he can get.” Dave Levinthal of the Center for Responsive Politics says of the super PACs: “The outside groups are akin to the biggest booster club you can imagine for a college football team. The club can’t give cars or gifts to the players, but they can do everything else possible to support them.… It’s a brand-new way to play politics.” [Washington Post, 6/23/2011] The Post fails to note many of the details about ROF’s senior officials. According to the Public Campaign Action Fund, Spies is not only a lawyer and a consultant, but a registered lobbyist for Clark Hill PLC, representing a chain of luxury casinos. ROF’s address as listed on its FEC filings is the same as Clark Hill’s Washington, DC, office. The Action Fund observes, referring to the Republican primary and the number of wealthy donors lined up behind each major candidate, “While [ROF] officially can’t coordinate with the Romney campaign, having lobbyists on your side is definitely a good way to boost one’s standing in the so-called ‘wealth primary.’” [Public Campaign Action Fund, 6/23/2011] The liberal news Web site Think Progress will soon note that McCarthy is a veteran advertising creator for Republican candidates, and was one of the strongest creative forces behind the infamous 1988 “Willie Horton” ad, which many considered to be extraordinarily racist (see September 21 - October 4, 1988). In 2010, McCarthy served as a media strategist for the American Future Fund, which launched attack ads attempting to link Democrats to the Park 51 community center in Manhattan, deemed by conservatives as the “Ground Zero Victory Mosque” and mischaracterized as a monument celebrating the 9/11 attacks. Those ads were decried by many as being bigoted against Muslims. McCarthy has brushed off criticism of his ads, and said the fact-checking organizations that found his ads to be flawed suffered from a pro-Democratic bias. Think Progress reporter Lee Fang will write that when he tried to find the American Future Fund office in Iowa, the address listed for the group turned out to be a UPS mailbox in a strip mall near an airport. Fang will write, “With a record of such secrecy and racist, anything-goes campaign tactics, one can expect Romney’s new outside group to be just as ugly in the presidential race.” [Politico, 10/29/2010; Think Progress, 6/27/2011]

Entity Tags: Charles R. Spies, Washington Post, Willard Mitt Romney, Carl Forti, American Future Fund, American Crossroads, 2012 Obama presidential election campaign, US Supreme Court, Bill Burton, Think Progress (.org), Public Campaign Action Fund, Larry McCarthy, Gail Gitcho, Federal Election Commission, Dave Levinthal, Lee Fang, Restore Our Future, Priorities USA Action, Mitt Romney presidential campaign (2012)

Timeline Tags: Civil Liberties, 2012 Elections

Analysis from the Annenberg Public Policy Center shows that 85 percent of the spending by the top 501(c)4 groups involved in the 2012 presidential campaign has been on ads found to be “deceptive” by fact-checking organizations. Spending from third-party groups, including “nonprofit” 501(c)4 groups, is up by 1,100 percent since the 2008 presidential campaign (see May 2, 2012). All of the ads are by Republican or conservative groups; Democratic 501(c)4 groups have not yet spent any money on the race. The ads, which aired between December 1, 2011 and June 1, 2012, have either targeted Republican presidential primary candidates or President Obama. The Washington Post’s Glenn Kessler, part of the Post’s “Fact Checker” team, recently criticized the wave of untruthful advertising, writing that “watching these ads is a depressing duty for The Fact Checker.… The erroneous assertions emerge… without any shame, labeled as ‘the truth’ or ‘fact.’” Kessler was criticizing ad campaigns by Americans for Prosperity (AFP—see Late 2004, May 29, 2009, and November 2009) and the American Future Fund (see October 12, 2010), which spent $8 million to attack Obama’s approval of the expense of “stimulus” money for “wasteful” programs that the ads falsely claimed sent American jobs to foreign countries. According to the Annenberg analysis, the four top groups spending money on deceptive ads are:
bullet The American Energy Alliance, a trade organization that advocates “free market energy policies,” with expenditures of $3,269,000;
bullet Americans for Prosperity, advocating lower taxes and less government spending, with expenditures of $5,018,000;
bullet The American Future Fund, with expenditures of $6,365,930; and
bullet Crossroads GPS, a conservative public policy advocacy group founded by former Bush administration political chief Karl Rove and former Republican National Committee director Ed Gillespie, with expenditures of $10,263,760.
Like the ads Kessler cited, many of the ads bought by the above-listed expenditures went to attack Obama over government financing of green energy companies such as the bankrupt solar company Solyndra. According to Bloomberg News, 81 percent of the attack ads against Obama in the first quarter of 2012 were about energy. [Washington Post, 4/30/2012; Annenberg Public Policy Center, 6/20/2012; Think Progress, 6/27/2012]

Entity Tags: American Crossroads GPS, Barack Obama, American Energy Alliance, Annenberg Public Policy Center, American Future Fund, Americans for Prosperity, Karl C. Rove, Bloomberg News, Ed Gillespie, Glenn Kessler, Solyndra Corporation

Timeline Tags: Civil Liberties, 2012 Elections

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