Obama Nominee to Elections Panel Helped Dem Group Skirt Massive IRS Fine

Former Media Matters CEO prevented donor disclosure, $5 million IRS penalty for Democracy Alliance-backed political group

Matthew Butler
Matthew Butler / LinkedIn
December 22, 2014

President Barack Obama’s nominee to a federal panel that oversees elections previously helped a top Democratic political group avoid a $5 million IRS penalty and worked to prevent the disclosure of the group’s donors.

Matthew Butler, who Obama tapped for a seat on the Election Assistance Commission (EAC) in November, has made a career at highly partisan left-wing advocacy groups, including a stint as the chief executive of Media Matters for America, a pro-Hillary Clinton opposition research blog.

Critics of Obama’s pick on the left and right say that Butler lacks any actual experience in monitoring or administering elections and will increase partisan divisions at the EAC.

"Choosing someone who has worked for Media Matters and who apparently has no election administration experience to speak of is (deliberately?) provocative of the Republican side," wrote University of California, Irvine, law professor Rick Hasen, an expert in political and campaign law.

Congress established the Commission in 2002 to provide resources and guidance to states regarding voting equipment, procedures, and guidelines. The majority and minority leaders of the House and Senate each recommend nominations to the president, who officially submits them for Senate consideration.

Hasen says partisanship has since infected the Commission’s work. "I have written off the EAC as the site for trans-partisan important work," he wrote.

If Butler is confirmed, Hasen worried, he will contribute to that trend of politicization. "He will start out at an already troubled agency without any goodwill and with lots of mistrust."

The specific nature of Butler’s past work may draw scrutiny from Republicans due to his apparent role in obscuring the sources of funding for political attacks against GOP candidates for federal office.

Before joining Media Matters, Butler was the deputy campaign manager for Sen. Chris Dodd’s presidential run. When Dodd withdrew in January 2008, Butler moved to Washington-based East Capitol Consulting.

One of his clients in that capacity was the Democratic activist group Progressive Media USA. According to his LinkedIn profile, Butler’s work for the group included "rectif[ying] structural legal problem to avoid potential $5M IRS tax penalty and disclosure of donors."

Tom Matzzie, known at the time for his work with prominent liberal activist group, led Progressive Media USA, then called the Campaign to Defend America, in 2007.

After months of lackluster fundraising, the group hired a new president: Media Matters founder David Brock. Butler, who also signed Media Matters as an East Capitol client, says he "directed leadership/board transition" of the "struggling non-profit political advocacy organization."

On April 8, 2008, Brock and other Progressive Media USA executives gathered at the home of liberal billionaire George Soros to chart a change in course. "We're a little behind where we need to be," Brock said.

Brock had "solved a key question connected to its financing," Politico reported at the time. In the pre-Citizens United campaign finance world, the 501(c)(4) group could not accept money from unions, a major source of Democratic campaign cash.

In consultation with "a new legal team," Brock decided to create a sister 527 political action committee called Progressive Media Action. It was not clear whether this was the move that staved off a massive IRS fine.

Butler’s critics say that that issue should be addressed before the Senate approves his nomination.

"If Butler was involved in trying to rectify potentially illegal conduct by an advocacy group, he has an obligation to provide full disclosure of his dealings with the IRS," said Hans von Spakovsky, a former Federal Election Commissioner and the head of the Heritage Foundation’s Election Law Reform Initiative, in an email.

Butler did not respond to questions about his nomination or the roles that he played at Progressive Media USA, Media Matters, or other groups.

Shortly after the formation of Brock’s new political arm, Progressive Media USA passed on nearly $25,000 to the effort. But one of the new group’s largest donors was wealthy film producer Steve Bing, who chipped in $1.5 million.

Bing was also a major donor to another high-profile political group in 2008 called the Fund for America. He donated $2.5 million to that group, as did Soros. The Fund passed on at least $1.4 million to Progressive Media USA.

The Fund was a project of the Democracy Alliance, a shadowy liberal donor club created a few years earlier that has since grown into one of the country’s most deep-pocketed fundraising hubs for liberal and Democratic groups.

"One result [of DA’s work] is the Fund for America, essentially a money pot for pro-Democratic organizations," National Public Radio reported in 2008.

When the group shut down that summer, its board wrote a thank you letter to supporters. It was signed by John Podesta, then the president of the DA-backed Center for American Progress, former DA board member Anna Burger, former DA chairman Rob McKay, and current DA chairman John Stocks.

The Democracy Alliance and the groups it supports, including Media Matters, represent some of the most aggressive and polarizing liberal organizations in the country. Butler’s affiliations with those groups may invite scrutiny from Republican members of the Senate Rules and Administration Committee, which will consider his nomination next year.

Von Spakovsky has been outspoken in his opposition to the nomination due to Butler’s inexperience in administering or overseeing elections, and, he says, to Butler’s stridently political background.

"Butler has no experience that would allow him to provide unbiased, objective advice to election officials on how to improve the voter registration and election process or to oversee the testing and certification of voting equipment," von Spakovsky wrote in a PJ Media column last week.

"But in his role as the head of Media Matters, he not only helped the administration attack its critics and stifle opposition, but proved his loyalty and steadfastness to the Democratic Party and the progressive cause with a win-at-all-costs attitude that the American people just rejected in the midterm congressional elections," he added.

The Rules and Administration Committee failed to act on the nomination before the conclusion of the 113th Congress, meaning the president will have to re-submit Butler’s nomination when the new Congress convenes in January.

Republicans will enjoy the chairmanship due to their incoming Senate majority, making it more likely that Butler’s perceived partisanship will come up.

Published under: Obama Administration