Democratic donors have built a formidable dark money network to obscure the source of more than $600 million funneled to liberal groups and initiatives last year, tax forms show.
The massive cash flow came from Arabella Advisors, a D.C.-based organization that says it provides "strategic guidance for effective philanthropy." In reality, the group does far more, funneling hundreds of millions of dollars in anonymous donations to some of the most influential advocacy groups on the left.
Recent Stories in Politics
Entities traced back to Arabella have invested more than $1 billion powering liberal activist and interest groups since President Donald Trump took office. The establishment of the complex network of nonprofits marks the Democrats' adoption of a once-derided Republican strategy: building a massive funding network that provides donors anonymity.
The practice came under heavy criticism from President Barack Obama and other top Democrats, who lambasted the use of dark money from right-leaning financiers such as the Koch brothers. Yet liberal groups have fully embraced its usage and are now doing so at a much higher level than Republicans: More than $150 million in dark money was spent throughout the 2018 election cycle, 54 percent of which came from liberal groups and only 31 percent from conservative groups.
Eric Kessler, a former Bill Clinton appointee and member of the Clinton Global Initiative, is the founder and head of Arabella Advisors. Kessler also established a series of so-called fiscal sponsors, groups that offer their legal and tax-exempt status to other groups that are not yet recognized as nonprofits by the IRS, including the New Venture Fund and the Sixteen Thirty Fund.
A host of liberal advocacy groups sit beneath those two organizations using the tax-exempt status they provide. While a Politico report indicated that the Sixteen Thirty Fund spent $141 million on Democratic causes in 2018, that represents just a fraction of the total sum of money passed through Arabella and its fiscal sponsors to smaller activist groups last year.
According to the latest tax forms from the New Venture Fund, $373 million flowed through the group, making it by far the largest entity operating under Arabella's auspices. The Hopewell Fund, also managed by Arabella, spent $78 million. Another group devoted to environmental causes, the Windward Fund, spent $13 million. In total, liberal donors combined to pour $622 million into the four Arabella groups in 2018.
More than $605 million of that money was then funneled to several different initiatives, including Demand Justice, a group established to push back against Trump's judicial nominations. Led by former Hillary Clinton press secretary Brian Fallon, the group was at the forefront of the battle against Justice Brett Kavanaugh's nomination to the Supreme Court.
Demand Justice does not have to disclose its donors or file individual tax forms to the IRS thanks to its affiliation with the Sixteen Thirty Fund, which acts as its fiscal sponsor.
But some information about its funding can be gleaned from the tax forms of other organizations, which show a connection to liberal billionaire George Soros's network of left-leaning groups.
The Washington Free Beacon previously reported that Demand Justice received $2.6 million from Soros's Open Society Policy Center, for example. Fallon also appeared around the same time at a gathering of the Democracy Alliance, an invite-only club of progressive millionaire and billionaire donors that was cofounded by Soros. Sixteen Thirty previously paid the Democracy Alliance hundreds of thousands in consulting fees. The alliance also lists the fund in confidential documents instructing donors on where to route money for part of its $275 million spending plan for the 2020 election cycle.
Sixteen Thirty Fund director Douglas Hattaway also runs a strategic communications firm that previously advised Soros's Open Society Foundations, according to a cached version of the website.
The Sixteen Thirty Fund is pumping significant cash into state-level endeavors for the 2020 election cycle. The Omaha World-Herald reported earlier this month that the fund gave $500,000 to Nebraskans for Responsible Lending to get a payday lending measure on the 2020 ballot and has done so in a number of other states. Many groups housed at Sixteen Thirty are state-based initiatives, including Arizonans United for Health Care, Colorado United for Families, Michigan Families for Economic Prosperity, North Carolinians for a Fair Economy, and Ohioans for Economic Opportunity, according to its records with D.C.'s Department of Consumer and Regulatory Affairs.
Other 2020 efforts from billionaire donors are similarly housed at Arabella.
The Heartland Fund, a collaborative effort focused on building "power across the divides" of the Midwest, has received funding from Soros and Scott Wallace, a failed candidate in Pennsylvania's First Congressional District during the 2018 midterm elections. The fund began organization and issue advocacy efforts earlier this year and has disbursed money to at least nine left-wing groups. The Heartland Fund is contained within Arabella's Windward Fund. Wallace is also linked to the Democracy Alliance.
Scott Nielsen, the managing director of advocacy at Arabella, has worked with a number of donor institutions in the past, including Open Society Foundation and the Democracy Alliance.
In addition to housing a plethora of liberal groups, the funds at Arabella also pass hefty amounts in the form of grants to outside liberal organizations.
Groups that have received grants from the Arabella-managed funds in 2018 include America Votes ($27 million from the Sixteen Thirty Fund and $2.3 million from the New Venture Fund), American Bridge ($200,000 from the Sixteen Thirty Fund), the Center for American Progress ($500,000 from the Sixteen Thirty Fund), and the Center for Popular Democracy ($700,000 from the Sixteen Thirty Fund and $475,000 from the New Venture Fund).
Arabella did not respond to a request for comment by press time.