There's a new left-wing dark money group in town.
Arabella Advisors quietly added a seventh nonprofit fund to its portfolio in 2021, a previously unreported offshoot called the Telescope Fund. The Telescope Fund is the first spoke in the Arabella network dedicated to hosting donor-advised fund accounts, a move that will enable Arabella to forge long-term partnerships with its largest anonymous donors. The dark money behemoth predicts Telescope will raise more than $200 million a year by 2025, according to the fund’s founding documents.
Launched in 2021 as a subsidiary of the Arabella-controlled New Venture Fund, Telescope petitioned the IRS to reclassify it a traditional charity in 2022. The IRS approved the request in May 2023, after the group claimed its "classification as a supporting organization is preventing donors from working with the Organization."
But Capital Research president Scott Walter suspects Arabella launched Telescope Fund to "further camouflage its operations" amid heightened scrutiny from law enforcement authorities.
That scrutiny is largely focused on Telescope’s original parent group, the New Venture Fund.
District of Columbia attorney general Brian Schwalb is investigating allegations that the New Venture Fund abused charity laws to help elect Democrats before and after the 2020 elections. Schwalb is also investigating whether Arabella is deriving illegal profits from New Venture Fund and the other dark money groups in its network. Arabella claims it only provides back office administrative support for their groups, but a series of Washington Free Beacon reports in 2023 exposed the firm wields centralized control over the multibillion-dollar network.
In 2022, the Telescope Fund raised over $30 million—almost all of which came from a single donation from Fidelity Investments Charitable Gift Fund—and contributed $29 million to dozens of liberal groups across the country, many of which focus on boosting voter registration at the state level.
That control extends to Telescope Fund, according to an administrative services agreement obtained by the Free Beacon. Arabella, a for-profit consulting firm founded by Bill Clinton appointee Eric Kessler, has the right to veto any prospective donor to the Telescope Fund that poses a "risk" to the consulting firm, the agreement shows. And though the Telescope Fund’s board of directors retains "final authority for all decisions," the fund promised not to exercise that authority "unreasonably" and to work together with Arabella to reach consensus on any given matter.
Former IRS tax law specialist Patrick Sternal said he has never seen a nonprofit allow a for-profit firm to control the donations it receives.
"The policy appears to be carefully drafted so that the charity retains ultimate control, but it’s circumscribed by the agreement with Arabella Advisors," Sternal told the Free Beacon.
The arrangement also raises the possibility that Telescope Fund could violate its charitable fiduciary duties by operating in Arabella Advisors’s best interest, not its own, said Paul Kamenar, an attorney for the watchdog group National Legal and Policy Center.
Arabella Advisors told the Free Beacon it works for the Telescope Fund, "not the other way around."
"We are proud to provide administrative support and accounting services related to the fund’s grantmaking and operations," an Arabella spokesperson said.
It appears unlikely that disagreements will arise between the two groups. Telescope Fund president Leslie Payne was formerly a senior director at Arabella Advisors, and Telescope Fund secretary Ben Mangan concurrently serves as a member of Arabella’s executive team. Telescope Fund’s general counsel Andrew Schultz also manages Arabella’s legal affairs.