Report: Liberal Dark Money Umbrella Facilitated $1.6 Billion in Recent Years

Arabella Advisors has seen massive cash flow from big money liberal donors to groups it houses

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April 18, 2019

An intricate web of liberal dark money groups saw $1.6 billion in contributions from deep-pocketed Democratic donors flow through a network of "fiscal sponsor" organizations to be used on causes and initiatives between 2013 and 2017, according to a new report from the Capital Research Center.

The report, Big Money in Dark Shadows: Arabella Advisors' Half-Billion-Dollar "Dark Money" Network, touches base on Arabella Advisors LLC, a social venture firm that provides consulting to liberal philanthropy endeavors.

"Together, these groups form an interlocking network of 'dark money' pop-up groups and other fiscally sponsored projects, all afloat in a half-billion-dollar ocean of cash," Capital Research Center writes in its report. "The real puppeteer, though, is Arabella Advisors, which has managed to largely conceal its role in coordinating so much of the professional Left's infrastructure under a mask of 'philanthropy.'"

Arabella Advisors was founded and is managed by Eric Kessler, a former Bill Clinton appointee and member of the Clinton Global Initiative. Kessler founded the New Venture Fund, a 501(c)3 progressive "fiscal sponsor" and is president of the Sixteen Thirty Fund, which houses 501(c)4 advocacy groups.

Douglas Hattaway, who previously worked with Hillary Clinton and Al Gore, directs the Sixteen Thirty Fund and founded Hattaway Communications, a Washington, D.C.-based strategic communications firm that has represented Soros's Open Society Foundations and the Center for American Progress. Hattaway was recently in attendance at the annual retreat of House Democrats and spoke on a panel, according to the agenda.

The Arabella network also includes the Windward Fund, a 501(c)3 charity that hosts environmental initiatives, and the Hopewell Fund, another 501(c)3 "fiscal sponsor" and project incubator. In 2017 alone, $600 million flowed through the four entities and between 2013 and 2017, Arabella was paid $76 million in "management fees" from its four nonprofit funds, the report states.

Greater secrecy is provided to groups and initiatives who use the likes of the New Venture Fund and Sixteen Thirty Fund as "pass through" organizations.

The arrangements make for a loophole in which groups who use a fiscal sponsor do not have to file Form 990s to the Internal Revenue Service, which provide information that includes board members in addition to a group's financials.

The arrangement also makes it extremely difficult to trace where a donor's money ends up. Those who steer money to a group that falls under the New Venture Fund, for example, do not have to designate which group the money is actually going, but rather can mark it as a donation to the New Venture Fund.

An example of a group that uses both the New Venture Fund and Sixteen Thirty Fund is Allied Progress and Allied Progress Action, which is a "consumer watchdog organization" that attacks appointees of President Donald Trump, the Washington Free Beacon previously reported.

Allied Progress was never a "standalone" organization, but rather a project of the two funds. At the time of the report, the group had launched attacks against Mick Mulvaney, then the acting director of the Consumer Financial Protection Bureau, and had already taken credit for forcing the withdrawal of several Trump appointees. The group appears to be just one individual, Karl Frisch, who previously worked for liberal operative and Clinton loyalist David Brock at Media Matters, where he was a senior fellow. Despite the shadowy nature of Frisch's group, he was regularly quoted in publications such as the Los Angeles Times, CNN Money, Washington Post, and Chicago Tribune.

The "fiscal sponsor" network is also used by the left's largest liberal dark money donor network, the Democracy Alliance, which counts Soros as a member and itself has pushed $1.83 billion into liberal infrastructure since its founding in 2005.

The Democracy Alliance has recommended donors in its club give to a number of groups that have fallen under Arabella's umbrella. The New Venture Fund has paid the Democracy Alliance $400,000 for consulting services in the past, according to the group's 2016 tax forms.

Scott Neilson, the managing director of advocacy at Arabella Advisors, has also worked with Soros's Open Society Foundations and at the Democracy Alliance.

The alliance still uses the New Venture Fund and Sixteen Thirty Fund as "pass through" organizations, which are marked in confidential documents recently obtained by the Free Beacon at the donor club's spring retreat on where to send money for a portion of its upcoming $275 million spending plan for the 2020 elections.

Arabella did not respond to inquiries on the money facilitated through its network by press time.

Published under: Democratic Donors