Obama’s Trust Fund Baby

Son of Orange County Republicans and Taco Bell heir spends family fortune electing Dems and enriching liberal foundations

March 29, 2012

About 150 wealthy, politically active liberals gathered at the Mandarin Oriental Hotel in Washington, D.C. In November 2011 to discuss the 2012 elections. The main topic: how to spend their money to ensure a Democratic victory. Guests included AFL-CIO president Richard Trumka and Vice President Joe Biden.

The conference was hosted by the Democracy Alliance, a network of deep-pocketed liberal philanthropists funding a variety of progressive organizations, the wealthy backers of which are also helping fund the president’s reelection campaign.

One member is Rob McKay, the Democracy Alliance’s chairman and heir to a Taco Bell fortune, who helped found liberal get-out-the-vote group Americans Coming Together and was also one of the earliest big donors to and supporters of the pro-Obama super PAC Priorities USA Action.

Although he is not listed as a bundler for the Obama campaign, McKay is on the board of the Priorities USA Action super PAC and in January helped organize a $35,800-a-head January fundraiser for Obama.

McKay and his wife Anna have given more than $305,500 to Democratic candidates and groups since the 1990 cycle, according to the Center for Responsive Politics, including $100,000 to the America's Families First Action Fund, the biggest Democratic-aligned super PAC of the 2010 election cycle.

McKay’s donations, though large, are not unusual. It’s his largesse to "independent" liberal organizations, such as the Democracy Alliance, that puts him in a class with other mega-philanthropists such as George Soros.

McKay is the son of two Orange County Republicans. His father, Robert McKay Sr., was an architect who became president of the Taco Bell franchise in the 1960s. McKay Sr. built the company from one location into a national chain before selling his 10 percent share to PepsiCo in 1978 for an estimated $13 million.

The family then grew its wealth through extensive venture capital investments.

McKay received a Bachelor’s in political science and sociology from Occidental College and a Master’s in social and public policy from the University Of California, Berkeley.

But instead of falling into the family business, the younger McKay turned his attention to philanthropy. Inspired by the Rodney King riots, which he called "a slap in the face by some serious reality," McKay established the McKay foundation in 1992.

The foundation, according to McKay’s Huffington Post author biography, "supports community-based organizations working for long-term social, political, and economic progress." As president of the foundation, McKay takes a $75,000 annual salary.

In 1998, the foundation established and funded the Living Wage Coalition in San Francisco—a group of unions and community organizations dedicated to raising the minimum wage. In 2000, the foundation spent about $100,000 to pressure the San Francisco Board of Supervisors to set a minimum $10-an-hour wage for more than 20,000 workers.

That McKay’s fortune was made from fast food, an industry disparaged on the left for its low wages and anti-union politics, was not lost on him.

"Let me tell you what I am not: I am not sort of liberal white rich guilt, which frankly in the Bay Area we see plenty of," McKay, who had two residences in San Francisco and San Diego valued at $8.3 million and $1.3 million respectively in 2010, told the San Francisco Chronicle in 2002.

That McKay used his Republican parents’ fortune to fund liberal projects is also not lost on critics who contend raising minimum wages makes it harder for businesses to hire.

Grover Norquist, founder of Americans for Tax Reform, called McKay "proof-positive that those doctors who believe genetics determine everything are wrong."

"He certainly did not inherit his father's wisdom or character," Norquist said in an interview with the Free Beacon. "You have a number of examples—the Kennedy clan for instance—where someone helped build this county and accumulated wealth, and then the children come along and work to destroy all that."

McKay Sr., however, has been a reliable contributor to his son’s foundation, donating $1 million in both 2010 and 2009 and more than $2 million in 2008 and 2007.

That money is distributed to a variety of liberal organizations such as Media Matters for America, the Center for American Progress, and the infamous ACORN. The foundation donated to $155,000 to Media Matters between 2007 and 2010.

The McKay Foundation did not return requests for comment.

By 2002, McKay had become a leading proponent of Proposition 52 in California, which proposed allowing voters to register at their polling place on Election Day. Although McKay spent at least $1.5 million on the measure, Prop 52 ultimately failed.

McKay took his philanthropic activities to the national level after the California campaigns. He was a founding member of Americans Coming Together (ACT), to which he donated a million dollars in 2003. Other major players in ACT included Steve Rosenthal, a former head of the AFL-CIO’s political arm; Harold Ickes, a current president of Priorities USA Action and Bill Clinton’s former deputy chief of staff; and Ellen Malcolm, founder of the pro-choice advocacy group Emily’s List.

The list of ACT’s coalition members reads like a who’s who of the most powerful union, environmental, and liberal groups in the country:, the AFL-CIO, the Sierra Club, and others.

ACT’s main project was a massive get-out-the-vote effort stretching across 17 battleground states.

But the operation was plagued by ethical lapses.

In 2007, the FEC hit ACT with a $775,000 fine—the third largest in the regulator’s history—for using unregulated soft money to boost Democratic candidates during the 2004 elections.

ACT also came under fire for hiring felons as canvassers. A 2004 investigation by the Associated Press revealed that the names and hometowns of dozens of ACT employees in Missouri, Florida, and Ohio matched those of individuals convicted of crimes such as burglary, forgery, drug dealing, assault, and sex offenses.

Officials in several Ohio counties launched investigations into faulty voter registrations provided by ACT during the 2004 cycle.

The Democracy Alliance was established in 2005, following liberals’ bitter disappointment in the 2004 elections, with the express purpose of countering conservatives’ political infrastructure.

Democracy Alliance members pay annual dues starting at $15,000, which support the organization’s staff as well as its twice-annual conferences and cocktail parties. Members are also required to contribute a minimum $100,000 to non-profit groups vetted and recommended by Democracy Alliance staff.

The groups the Democracy Alliance supports focus mostly on issue advocacy and get-out-the-vote efforts rather than campaign advertising. These groups include such progressive stalwarts as Media Matters for America, the Center for American Progress, and the now-defunct ACORN.

The Democracy Alliance recently underwent a shakeup and dropped several groups it previously had supported, including Citizens for Responsibility and Ethics in Washington and the Citizen Engagement Lab.

The split was allegedly the result of a longstanding friction within the alliance over whether to support a broader progressive movement or more closely ally itself with the Democratic Party.

The latter faction appears to have won.

"The recent decisions were part of a natural funding cycle that all philanthropic organizations go through," an official at the Democracy Alliance told the Huffington Post. "In addition to an evolving strategy that focuses on a smaller set of anchor organizations, we’re also recommending that donors support a broader landscape of groups. Organizations that we've recommended in the past will continue to get support—donors know these organizations and they will continue to do good work."

But, while the Democracy Alliance avoids partisan ads, that does not mean McKay is out of the game.

McKay is listed as one of several wealthy liberals backing the new Democrat opposition research group, American Bridge 21s Century.

David Brock, who also founded Media Matters for America, founded American Bridge. According to Brock, the group intends to focus on opposition research against conservatives and run millions of dollars in television ads in the upcoming election.

McKay is also is a director of Mother Jones magazine and the Salon Media Group, which the McKay Investment Group supports, and a former director of the Vanguard Public Foundation. He is also a board member of Progress Now.

The Democracy Alliance did not return requests for comment.