Craig Varoga's 'Patriot Majority' offers donors secrecy, funnels millions to Democrats via public sector unions

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"In the galaxy of nondisclosing political entities, Patriot Majority plays in the big leagues."

8/23/12, "Liberal Group With Ties to Unions Ends Donor Disclosure," OpenSecrets.org, Russ Choma

"The web of outside spending groups known as Patriot Majority has never been particularly mysterious -- at least to those who know their way around campaign finance disclosure forms.

The network’s funders are clearly laid out in disclosure filings dating back to 2006: Labor unions and a handful of prominent Democratic donors.

But in a striking example of how the most ambitious actors in the realm of political funding have begun taking advantage of a shift in the legal landscape since 2010, the trail connecting Patriot Majority to its well-known progressive funders has all but melted away. Almost all of Patriot Majority’s activities are now being carried out through a nonprofit that, under section 501(c)(4) of the tax code, doesn’t have to disclose its donors.

And in the galaxy of nondisclosing political entities, Patriot Majority plays in the big leagues. The group began running an ad this week – a $500,000 buy on national cable outlets, it says -- attacking what it calls the conservative “Greed Agenda.” In the ad, the narrator warns that "Billionaire oil tycoons Charles and David Koch and their special interest friends are spending $400 million to buy this year's elections and advance their agenda!" Patriot Majority says it has several million dollars already in hand to fund the campaign....

Since 2008, at least five different organizations have carried the Patriot Majority moniker in one form or another -- several of them regional. But public filings for all of them list a name in common: Craig Varoga.

Varoga, founder and president of Patriot Majority, is a longtime Democratic strategist who has worked on a number of presidential campaigns, including those of Bill Clinton, Al Gore and John Kerry, as well as several successful gubernatorial bids, such as those of Tom Vilsack in Iowa, Janet Napolitano in Arizona and Bill Richardson in New Mexico. He’s also a former communications director for Senate Majority Leader Harry Reid, the Nevada Democrat whose re-election in 2010 was aided by a fusillade of ads sponsored by Patriot Majority.

Preferring to work away from the spotlight, Varoga has rarely spoken about Patriot Majority’s relationship with its funders or the Democratic candidates it has helped. Until recently, though, the connections were laid bare in regular filings made by the various Patriot Majority groups with the Federal Election Commission and the Internal Revenue Service.

Now, all fundraising and spending through the different arms of Patriot Majority that publicly disclose their financial backers has screeched to a halt. Political ads bearing the Patriot Majority name are coming only from the nondisclosing (c)(4) part of the network.

Under the Internal Revenue Code, 501(c)(4) nonprofits are considered “social welfare” organizations that can spend money on political activity as long as politics isn’t their “primary purpose.”...

One thing that is clear: In the wake of the 2010 Supreme Court decision Citizens United v. Federal Election Commission, which freed corporations and unions to spend unlimited amounts of money on politics as long as they did it independently of candidates’ campaigns, the 501(c)(4) has become a popular vehicle with which to collect contributions from those who would rather not be public about their gifts.

Attempts by OpenSecrets Blog to interview Varoga were unsuccessful. In a short email statement he provided, though, he took pains to define the 501(c)(4) part of his network as something other than a political group....

The Patriot Majority 527 filed its first paperwork in 2006; its initial donation was $50,000 from the New York City office of the powerful Service Employees International Union. But the nation’s largest public employees’ union, the American Federation of State, County and Municipal Employees (AFSCME),quickly became the group's main benefactor, giving a total of more than $4.5 million in 2008, according to reports filed with the IRS shortly after the election that year.

In 2010, the Patriot Majority 527 group reported receiving about $2.75 million in revenue. AFSCME kicked in $500,000 of that, while another $350,000 came from a separate 527 called Patriot Majority West -- which in turn received nearly all its money from AFSCME. But Patriot Majority’s single largest contributor, giving $800,000, was another 527 group called America Votes – a coalition of labor unions and liberal groups such as EMILY's List, the NAACP National Voter Fund, Human Rights Campaign and others.

America Votes itself had collected money from an array of unions, including AFSCME, and notable Democratic financiers like Fred Eychaner (who is a bundler for Barack Obama and has spent more than $3.25 million backing Democratic super PACs in 2012) and Jon Stryker (who has given $1.5 million to the pro-Obama super PAC Priorities USA Action)....

In all, the Patriot Majority super PAC reported spending $1.9 million to help keep Reid in the Senate in 2010, though in reality it may have spent much more. Varoga's involvement in the race was multilayered: He and another Democratic strategist also created a website called TheTeaPartyIsOver.org, which was formally run by a 527 co-founded by Varoga that got much of its funding from Patriot Majority and Patriot Majority West....

There’s more than one reason why 501(c)(4) nonprofits are “shadow money” or “dark money” groups, the most prominent of which is that donors’ names can stay secret. But there's also the fact that these and other outside groups have to report only some of their spending to the FEC. Specifically, they only have to report money spent on ads directly calling for the election or defeat of a candidate, along with what they spend on "issue ads" -- often thinly-veiled versions of the same thing -- that run 60 days before a general election or 30 days before a primary. ...

And Patriot Majority has put more than $200,000 into ads backing Democratic Sen. Claire McCaskill in Missouri.

Further compounding the many disclosure gaps attached to the activities of Patriot Majority and other (c)(4) groups: They won’t be filing their 990 forms with the IRS – which at least show how much they raised, how much they spent, who their officers and major vendors are and what grants they gave to other groups – until well after Election Day, in some cases more than a year later. And while unions must file reports with the Labor Department that detail their finances, including groups to whom they gave money, they are submitted annually -- again, not until after the election.

Varoga did not respond to questions about where the funding for Patriot Majority this election cycle is coming from, but Chris Fleming, a spokesman for AFSCME, confirmed that his union is still supporting the organization this year.

"AFSCME supports a lot of groups, and, yes, Patriot Majority is one of them," he told OpenSecrets Blog in an email.

For now, that’s about all we have to go on." via Instapundit

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