Rob Stein: The Brain

How one man convinced George Soros and Peter Lewis to fund a secretive liberal infrastructure

October 1, 2012

The "spiritual adviser" of the Democratic Party is the mastermind behind a secretive organization that plans on spending $100 million on the 2012 election.

Rob Stein, the founder of the lucrative Democracy Alliance, spent years trying to raise money outside of the Democratic Party after serving as chief of staff of Bill Clinton’s transition team. It was not until former President George W. Bush’s victory in 2004, however, that he found the backing to make it work. Watching election returns from liberal billionaire George Soros’ Manhattan apartment, Stein found a willing audience for his concept: an organization that would funnel big dollar donations into liberal nonprofits outside the official party system.

"After 2004, you had these very wealthy liberals who put millions of dollars into the election with no visible benefit," said Jacob Laksin, author of The New Leviathan. "The Democracy Alliance was designed to focus on electoral politics, not policy. It gives them a way to measure their effectiveness to please their wealthy patrons."

The Alliance operates on a venture capital model, recruiting members—business titans, large foundations, and unions—to deliver $200,000 annual donations to select liberal groups. Stein crafted the blueprint for the organization in a presentation he dubbed "The Conservative Message Machine’s Money Matrix" to mirror what he perceived as the operations of right-wing think tanks, such as the Heritage Foundation.

Rather than direct the member donations to more policy-oriented liberal organizations, such as the Brookings Foundation, the Alliance focuses on politics. It concentrates most of its efforts on funding groups with close ties to the White House, including the Center for American Progress, Media Matters, and the pro-Obama Super PAC, Priorities USA.

"The left’s think tanks are much more political," said campaign finance expert Bradley Smith. "They’re more focused on partisan hit jobs than think tanks that generate actual policies."

The Alliance launched in 2005 with about 80 members, including co-founding billionaires Soros and insurance magnate Peter Lewis. Following the 2010 Republican sweep and a personal appeal by Vice President Joe Biden in November 2011, the Alliance decided to begin funding Super PACs—a "critically important" move, Stein told The New York Times earlier this year.

The Alliance guarantees secrecy for its members and recipients by exploiting campaign finance loopholes.

"The major funding that comes from Democracy Alliance partners comes directly from the partners themselves," Stein said in a 2006 speech.

The Alliance directs donors to certain liberal organizations, rather than give directly, allowing it to dodge disclosure laws. Not only does it refuse to disclose its partners, it forbids them from speaking publicly about the group.

"There’s an incentive [for members] to cover their tracks," said conservative elections expert Jay Cost. "The public is very frustrated on campaign finance … no disclosure helps preserve the liberal image of not being the party of the wealthy."

Stein and his wealthy second wife, banker Ellen Perry, have amassed a personal fortune. The couple own homes in Washington, D.C., and in Massachusetts, worth approximately $1.65 million.

Stein’s job has earned him more than just money: He has emerged as a leading voice in the Democratic Party, and has personally given more than $12,000 to Democratic candidates since 2007, including $6,500 for the Obama campaign.

His extensive philanthropy efforts have led to three White House visits since Obama took office.

Neither Stein nor the Democracy Alliance returned requests for comment.