Democracy Alliance State Spending Plans Revealed

At secretive donor retreat, Committee on States plans ways to circumvent campaign finance laws

Lobby of the Mandarin Oriental Hotel in Washington, D.C., where Democracy Alliance members are meeting this week
November 12, 2014

A secretive club of wealthy liberal donors met this week to plan the disbursement of tens of millions of dollars into state political campaigns and to discuss how they can circumvent legal restrictions on political coordination to elect Democratic candidates at the state level.

Through behind-the-scenes collaboration and a budget that those involved hope will reach nine figures, the Democracy Alliance, a massive network of high-dollar Democratic donors, hopes to turn the tide of recent Republican gains in state legislatures and governorships.

Representatives of the DA’s state-level partner organization, the Committee on States, briefed donors on its efforts on Wednesday afternoon at a closed-door session of DA’s biannual conference, held this week at Washington’s ritzy Mandarin Oriental hotel.

The Alliance does not want what is discussed at the conference being revealed to the public. A Mandarin Oriental memo obtained by the Washington Free Beacon advises hotel staff that DA "is extremely confidential and private."

Alliance staff, the memo says, have "hired their own security to patrol the perimeter of the group’s space and will not need security staffing from the hotel." Office space provided in the hotel’s conference area "should be kept locked for the duration of their program."

The Democracy Alliance connects high-dollar donors to a network of about 200 liberal political action committees, nonprofits, activist groups, and political vendors that spend hundreds of millions of dollars each year advancing Democratic policies and candidates.

It does not publicly disclose any details about its donors, how much money they contribute to recipient organizations, or which organizations on its extensive list of recommended "investments" receive DA-facilitated contributions.

Documentation obtained by the Free Beacon at the Alliance’s April donor conference in Chicago made much of that information public. Additional documents obtained this week detail DA’s growing involvement in state-level politics.

According to briefing materials provided at a conference session on the Committee on States, 21 Democracy Alliance donors and a network of "state-based donor alliances" affiliated with the Committee provided more than $45 million in funding for state-level liberal and Democratic organizations during the 2014 election cycle.

That included significant investments in prominent swing states, including more than $6 million each in Florida and Colorado, $2 million in Pennsylvania, $7 million in North Carolina, and $9 million in Wisconsin.

Those funds supported a wide array of groups, many of which are legally prohibited from officially cooperating. However, the Committee promoted a coordinated donor approach that can circumvent some of those prohibitions.

In a PowerPoint presentation, Committee on States staff noted that there is a "legal firewall" between, on the one side, nonpartisan 501(c)(3) groups and independent expenditure political groups, and, on the other, state political action committees, political parties, and campaign committees.

Subsequent slides explain how that firewall can be circumvented, illustrated by arrows traversing the visual "firewall."

Political "investors" can give to all categories of groups, one slide notes. Another slide details Committee donors’ roles as coordination, strategy, targeting, and accountability.

Political vendors operating as for-profit corporations that focus on "data, analytics, and research" can also work with all categories of groups, another slide explains.

A state Democratic Party cannot share information with a super PAC operating there, for example, but a private corporation that controls extensive voter data can work with both.

One such group, Catalist, is among the Democracy Alliance’s core network of supported groups. The company, a limited liability corporation, is the data hub of the Democratic Party, providing extensive voter information to political groups, parties, and candidates, some of which are legally prohibited from coordinating their efforts.

Other Democracy Alliance-linked groups have alleged that this sort of arrangement violates campaign finance laws.

The American Democracy Legal Fund—a sister organization of DA-supported Media Matters for America run by Hillary Clinton operative David Brock, who attended April’s DA conference—filed a federal election complaint last month against the Republican National Committee that alleged illegal coordination with outside groups by way of a mutual for-profit data vendor.

Brock’s group claimed that the RNC and independent political groups were illegally coordinating by accessing the same information, held by the private company Data Trust. The Committee on States appears to be promoting a similar relationship.

In addition to this data work, the Committee is supporting extensive voter registration efforts at the state level through its support of the Voter Participation Center (VPC).

The group was formerly called Women’s Voices, Women’s Vote, and focused on registering, tracking, and turning out single women voters. It has since expanded to promote those goals among what it calls the Rising American Electorate: single women, racial minorities, and young people.

According to VPC materials provided at the Committee on States briefing, the group has "generated more than 2.5 million registration applications as well as helped to turn out millions of the RAE on election day."

Members of the RAE "represent the majority of the voting eligible population," VPC noted, though political observers have pointed to Democrats’ poor showings among white voters as a main cause of their drubbing in last week’s midterm elections.

A lack of interest among DA donors in courting white working class voters led to the cancelation of a Center for American Progress program last year aimed at promoting the Democratic message among those voters.

In addition to its direct work on elections, the Committee is focused on remaking the electoral map to be more favorable to Democratic candidates.

In February, the Committee will gather in Washington, D.C., with the DA-backed group America Voters and a group of labor unions "to strategize for 2020 and the next redistricting process," according to a "save the date" notification included with Committee briefing materials.

The Committee may also back a new Democrat-aligned group working on policy fights at the state level, according to a report this week from Politico’s Ken Vogel.

Billed as an answer to the conservative American Legislative Exchange Council (ALEC), the State Innovation Exchange (SiX) will work with liberal academics, lawyers, and activists to craft and implement progressive legislation.

"We’re going to be much more aggressive than ALEC," Nick Rathod, a former Obama White House official said. Politico noted that the group would go beyond straight policy work to focus on opposition research and communications work attacking state-level Republican politicians.

SiX is one of a number of groups vying for Committee support. Like the DA, the Committee on States does not actually make contributions. Instead, it connects donors to organizations that it has strategically vetted and endorsed.

The Committee’s budget is significantly smaller than the sums it steers to those groups. According to financials provided at the conference, its annual budget this year is just $525,000, most of which came in the form of partner dues.

The funds it directs to groups are much larger, and growing. It nearly reached $50 million this year. According to a draft proposal, "it is the goal of the Democracy Alliance and our partner, Committee on States, to increase that investment to $100 million by 2020."