As Democrats go to the polls in Nevada Saturday, many fear a redux of the still-inconclusive Iowa caucuses. In the days since the start of that historic catastrophe, news reports have blamed the Iowa Democratic Party's inaccurate figures on a smartphone app developed by Shadow Inc., a "progressive" technology firm. Shadow, in turn, has been linked to a nonprofit, ACRONYM, out of which has spun a complex network of private and public entities infused with millions in Democratic dark money.
At the center of that network sits one woman: Tara McGowan.
In her early 30s, McGowan has been heralded as a rising star in Democratic Party politics. Her résumé is peppered with names from Barack Obama to Hillary Clinton to Tom Steyer. A fawning profile in the online magazine Ozy called her the "Democrats' most dangerous digital strategist." Her ACRONYM network was meant to be the party's high-tech solution to its crushing 2016 defeat.
In response, McGowan's fellow Democrats have sunk at least tens of millions into her ventures, which promise to build "digital infrastructure" and leverage "cutting-edge online creative media"; McGowan has made it clear that she wants millions more. Although she once told investors not to "measure our success by how many Politico articles we’re mentioned in," she has until recently revelled in press attention, posing for glossy photos in the New York Times and proudly explaining the elaborate structure of her pro-Democrat news operation, Courier Newsroom. She has also publicly paraded her superstar funders, going out of her way to tie ACRONYM to Dollar Shave Club CEO and millionaire cofounder Michael Dubin on its launch.
In the wake of the Iowa fiasco, however, McGowan has been forced to pivot from image boosting to damage control, putting distance between herself and Shadow in a way that has done more to raise alarm than assuage it. Funders who once heaped cash on her are starting to ask whether McGowan's startup is really the next big thing, or if the whole operation has been their version of Theranos, the tech firm that raised millions on a miracle technology it couldn't deliver.
"What some people rightly or wrongly believe about her is that she’s in some ways the Elizabeth Holmes of politics," one Democratic operative with extensive campaign experience told the Washington Free Beacon. "She convinced a lot of people that she knew what she was doing, and perhaps doesn’t."
The House That Tara Built
A closer look at ACRONYM reveals a hybrid structure that is more start-up than traditional political organization. Connected to it is a PAC, Pacronym, as well as a for-profit subsidiary, Lockwood Strategy, a "digital creative and media campaign consultancy" that consults for both McGowan's network and outside clients. She also set up other private firms, including Shadow and the news outlet Courier Newsroom.
Nonprofits like ACRONYM and political action committees like Pacronym are subject to a host of transparency laws. Private entities like Lockwood and Shadow, however, have no such reporting requirements. Such a structure is "not unheard of," Anna Massoglia, a researcher at the nonpartisan Center for Responsive Politics, told the Free Beacon, but it does raise red flags.
"LLCs and other opaque for-profit entities can effectively operate as a black box with little or no disclosure, only disseminating the information they choose to publicly release," she said.
McGowan has leaned on that black box. One potential benefit: PACs and tax-exempt organizations are obligated to disclose significant payments to employees, but private firms are not. Only one person appears to list Lockwood Strategy as her current employer on LinkedIn: Tara McGowan. ACRONYM's most recent financial disclosure, covering 2017, shows McGowan collecting just $16,667 in her capacity as president and CEO.
ACRONYM did not respond to questions about how much McGowan is paid, or which component of its structure—ACRONYM, Pacronym, Lockwood, or otherwise—was paying her. Although Massoglia said she could not comment on ACRONYM in particular, she explained that "it is not uncommon for politically active ‘dark money' nonprofits to pay individuals working for the group through firms, potentially hiding details of the amount paid and the individuals being paid." McGowan's salary is a mystery to the public.
Money circulates freely in the McGowan network. FEC records show that Pacronym has received $300,000 in contributions from ACRONYM which, in turn, transferred $1 million to Lockwood. Employees move freely as well—LinkedIn shows 45 current Acronym employees, at least one of whom used to work at Lockwood. Shadow Inc. CEO Gerard Niemira is a former COO of ACRONYM.
The Iowa fiasco demonstrates another reason for this structure: When a piece of the network fails, it can be lopped off. McGowan immediately worked to distance ACRONYM from Shadow, labeling it an "independent company," scrubbing references from ACRONYM's website and claiming to be just one of many investors. But an old press release explicitly states that ACRONYM "acquired" Groundbase, the firm whose technology ACRONYM then placed under the aegis of Shadow, which it also "launched." As recently as a week before the Iowa caucuses, McGowan claimed on her podcast that ACRONYM was Shadow's "sole investor."
McGowan's attempts to distance ACRONYM from Shadow have, however, only raised more questions.
"I think the reason she did that," the Democratic operative said of the distancing, is that "there must be some recognition that if donors or others try to take her complicated structure and unwind it, they would find out that it’s a lot of smoke and mirrors. That must be the concern she had, which is why she tried to lie about that."
Regardless of why ACRONYM is structured as it is, the result is the same: a black box that neither investors nor the public are fully empowered to peer into.
"Federal campaign finance law has struggled to keep pace with issues posed by new technologies," Massoglia said. "The Iowa Democratic Party using a firm affiliated with a dark money group is just one example of the lack of disclosure and clarity around this issue."
ACRONYM, then, could be as newfangled as McGowan promised. That newness comes not in the form of initiatives to "build progressive power"—those appear to be faltering. Rather, it comes in complex legal structures, by which millions of dollars can be made to disappear.
The Birth of a Start-Up
Barack Obama was, as a Vox retrospective put it, our "first digital president." A data-driven campaign led to a technocratic administration with deep ties to Silicon Valley. Obama's world ran on the allure and mystery of tech.
That's where Tara McGowan got her start. After college and stints in journalism and on Capitol Hill, McGowan found her calling as a "digital producer" for Obama's 2012 reelection campaign, building content focused on LGBT and women's issues. The experience appears to have left a mark: McGowan has "Yes, we can" tattooed on her arm, and she joined other Obama campaign veterans in a pro-Hillary Clinton video asking America to "do it for Obama."
McGowan has repeated the Silicon Valley tropes that were a hallmark of her time in the Obama world, selling well-heeled Democratic donors on "invest[ing] in digital-first tools" and "disruptors who are committed to leveraging digital to reach voters." Such language recalls a president who promised to "harness technology to confront the biggest challenges that America faces," hosted Google at the White House over 400 times, and who post-presidency dropped in on a sports analytics conference.
Obama's 2012 victory launched McGowan, who went to work building digital ads for Steyer. In 2016, she became the first digital director for Priorities USA, a super PAC that spent hundreds of millions on Clinton's failed 2016 campaign.
McGowan's experience perfectly positioned her to sell Democrats on a Silicon Valley rebrand. In 2017, with the backing of millionaire Dollar Shave Club CEO Michael Dubin, McGowan launched ACRONYM. The idea was simple: use "cutting-edge online creative media and marketing campaigns" (read: well-targeted Facebook ads) to win elections.
That sort of verbiage, typical in the venture capital world, was a part of ACRONYM's DNA. A 2018 investor pitch letter says McGowan and co. are building "digital infrastructure" and that they "understand the power of coordination," "encourage and facilitate [coordination] where we can to maximize limited resources and impact," and it of course reminds readers that "‘digital' is an adjective, not a noun." This packaging reinforces McGowan's high-tech image.
Her sleek pitch worked, and McGowan attracted investment from Hollywood moguls like Steven Spielberg and J.J. Abrams, major unions like AFSCME, and hedgefund billionaires like Donald Sussman and George Soros. Fundraising success has let McGowan expand aggressively. Her latest goal is an "unprecedented" $75 million to target President Donald Trump with digital ads in 2020. Before Iowa came crashing down around her, she looked set to do it. Now, however, donors may be taking a closer look, asking whether McGowan's high-tech operation is really able to deliver what she claims.
Metrics for Success
Ninety percent of start-ups fail. Democratic donors have bought into Tara McGowan's network as though it's the next Facebook; how do they know it's not the next Theranos?
ACRONYM did not respond to questions about how it measures success, but McGowan's past statements offer clues. In her 2018 investor pitch, her major win was the election of Virginia governor Ralph Northam (D.), for which ACRONYM orchestrated nearly $3 million in ad spending. Responding to the Iowa fiasco, McGowan highlighted progressive victories in "more than 60 state and federal elections." Successes are usually framed in terms of effort—the number of ads placed or voters registered—rather than effect.
It's hard to judge how much of an impact McGowan's network actually had on any given election—just because it was involved does not mean it had an effect. Federal election data show Lockwood Strategy making ad buys, with Pacronym transferring $1 million to its private sibling in the 2018 cycle. Lockwood, in turn, reported a total of $719,000 in independent expenditures paid for by Pacronym and others (not all money went toward such expenditures, which accounts for the discrepancy). Federally, those expenditures were funneled toward eight races, of which ACRONYM's candidates won six. The organization's $147,000 in spending could not defeat Rep. Vernon Buchanan (R., Fla.), nor could $90,000 help reelect former Florida Democratic senator Bill Nelson.
If these numbers are confusing, imagine how an investor must feel.
McGowan's network has struggled to branch out from digital advertising.
After Iowa, Shadow's reputation appears permanently tarnished. The Nevada Democratic Party has announced that it will not be using Shadow's software in its caucus—its version had problems too. Both Pete Buttigieg's and Joe Biden's campaigns also purchased Shadow software; they did not respond to questions about their experience with it.
The failure of Shadow's software is linked to an apparently slapdash operation. As one tech writer noted, the development team consisted of one senior engineer without mobile app experience and a coterie of "very recent coding school graduates," two of whom recently worked "as a prep cook for Starbucks and receptionist at Regus." The software was built in less than two months and was largely untested before the caucus.
McGowan's news operation, Courier, appears to have a small footprint. The outfit is intended to fund "local" newsrooms in swing states, pushing pro-Democrat messaging under the guise of local news. According to Bloomberg News, McGowan sought $25 million for sites in six states, although as of now, there are only three.
Neither ACRONYM nor Courier responded to a request for comment, but independent metrics indicate that while the project is audacious, its impact is minimal. All three sites have epically low traffic. The Dogwood, based in Virginia, has the highest rank on web service Alexa's listing of sites, at number 2,276,925—by way of comparison, a site like the Daily Herald, covering news in central Utah, ranks as 49,184. The sites do similarly poorly on social media: Both Up North News, which covers Wisconsin, and the Copper Courier, based in Arizona, have under 700 followers on Twitter. The Dogwood, based in Virginia, fairs slightly better with about 7,000 followers but commands a substantially smaller following than many newssites.
This minimal footprint reflects Courier's tiny size. The Dogwood appears to have just three employees, UNN has four, and the Courier does not even publish a masthead. There are currently more job openings on Courier's "about" page than people employed by the newsrooms.
In other words, Courier Newsroom seems a bit like Shadow—a seat-of-the-pants operation light on manpower.
But it is hard to know: As with the rest of McGowan's operation, details hide behind a thick veil of legal obfuscation. Just like Lockwood, the media operation lacks the reporting obligations that ACRONYM and Pacronym both have. This means that the $25 million McGowan raised for Courier, and the $150,000 state Democratic parties and 2020 campaigns paid Shadow, have vanished into thin air.