Arabella Advisors, the kingpin of a multibillion-dollar Democratic dark money machine, is in the market for a new leader amid a series of financial and political setbacks.
The firm announced CEO Rick Cruz will depart on August 1 after less than two years on the job. In a letter to its fiscal sponsor partners, Arabella Advisors said its board decided to axe Cruz with "decidedly mixed emotions" but praised the outgoing executive for playing a "pivotal role in guiding and shaping our organization, contributing significantly to its growth and success."
The announcement comes less than two weeks after the Washington Free Beacon published internal Arabella documents showing the group exerts centralized control over a network of five Democratic dark money funds that, in turn, operate hundreds of ostensibly grassroots left-wing activist groups. Arabella publicly claims that it merely provides back-office administrative support to its funds.
Though Arabella collects a robust management fee from its funds, which hauled in a combined $3.3 billion in 2020 and 2021, recent events indicate the group faced dire financial straits under Cruz’s leadership. Arabella Advisors laid off 10 percent of its workforce—roughly 30 employees—in May, which they attributed to a "souring economic climate," according to Politico. A spokesman for Arabella Advisors said the firm was "adapting our operating model to meet the needs of our sector and our clients most efficiently and effectively." Arabella Advisors did not say who will replace Cruz.
Arabella Advisors did not respond to a Free Beacon request for comment.
Cruz’s untimely departure from Arabella should come as no surprise, said Capital Research Center president Scott Walter. Walter noted that Cruz got the top slot at Arabella after his predecessor admitted in a November 2021 interview that the group takes inspiration from right-wing megadonors, who are often derided as threats to democracy by the left.
"He looked to be a placeholder," Walter told the Free Beacon. "A chief revenue officer made CEO when his predecessor abruptly announced her departure, shortly after giving a disastrous interview to the Atlantic where she admitted Arabella is ‘the Left’s equivalent of the Koch brothers.’"
Arabella’s financial situation could deteriorate further if Republican lawmakers have their way. Rep. Bryan Steil (R., Wis.), the chairman of the House Administration Committee, introduced legislation in July that would bar dark money groups—many of which are Arabella’s clients—from contributing to political committees if they accept foreign donations.
The legislation, if passed, would have a devastating impact on Arabella’s bottom line. Its funds have accepted over $265 million from nonprofit groups bankrolled by Swiss billionaire Hansjörg Wyss, according to Americans for Public Trust, a government watchdog group. The Republican legislation would have prohibited Arabella’s primary political arm, the Sixteen Thirty Fund, from doling out $61 million to Democratic Super PACs during the 2020 election cycle.
Unless that legislation passes, Americans for Public Trust executive director Caitlin Sutherland predicted foreign donors such as Wyss will continue to bankroll Arabella’s funds.
"The headlines haven’t been too kind to the dark money behemoth Arabella Advisors this past year," Sutherland told the Free Beacon. "Regardless of who has the title of CEO, we know foreign billionaire Hansjörg Wyss will continue to fund the Arabella network to push his progressive policies on Americans."