Whitehouse (D): Dark Money Is a Problem 'On Both Sides of the Aisle'

March 7, 2019

Sen. Sheldon Whitehouse (D., R.I.) on Thursday said that dark money is a problem "on both sides of the aisle" when he was asked about the report pertaining to freshman Rep. Alexandria Ocasio-Cortez's (D., N.Y.) dark-money problem.

An America Rising Squared tracker caught up with Whitehouse as he was walking towards an elevator when he pressed the Senator about the report that her campaign manager funneled $1 million in political donations into his private companies, prompting him to shift blame to Republicans for not supporting a dark-money bill.

"Well, if we can pass a good dark-money law, which all the Republicans seem to be objecting to unfortunately, but if we can pass a good dark-money law, it would help put an end to this on both sides of the aisle," Whitehouse said. "I don't think dark money is bad only on the Republican side, although it occurs mostly on the Republican side. I think we need to get rid of dark money entirely."

The tracker followed up to ask whether be believes the Federal Election Commission (FEC) should investigate Ocasio-Cortez's case.

"I couldn't tell you that without—" Whitehouse said, getting cut off when the elevator door closed.

The Washington Examiner reported this week that Saikat Chakrabarti, Ocasio-Cortez's chief of staff, established two political action committees that paid his company, Brand New Congress LLC, more than $1 million between 2016 and 2017. The National Legal and Policy Center, a government watchdog group, filed a complaint with the FEC, saying Chakrabarti may have violated the $5,000 limit on contributions from federal PACs to candidates.

David Mitrani, the attorney for Ocasio-Cortez's campaign, the PACs, and the LLC said all four entities "fully complied with the law and the highest ethical standards." However, Adav Noti, a former FEC lawyer said, "None of that makes any sense" and that he "can't even begin to disentangle that. They're either confused or they're trying to conceal something."

Whitehouse has attempted to position himself as someone opposed to dark money in the Senate, but he has a long history of accepting dark money and turning his head when his Democratic colleagues accept money from dark money groups. In addition to his hypocrisy, Whitehouse claimed that dark money "occurs mostly on the Republican side," but the Democrats spent more dark money than Republicans during the 2018 election cycle. Issue One, a campaign finance watchdog, reported back in January that "liberal groups accounted for 54 percent of the $150 million in dark money spent on the 2018 midterm elections."

The League of Conservation Voters, which has become one of the nation’s strongest "dark money" forces, has donated over $175,000 Whitehouse's campaigns since 2006, including $158,661 during the 2018 cycle and $19,250 during the 2016 cycle. He also has close ties to liberal billionaire Tom Steyer, who along with his wife, Kathryn, donated $73,407, 944 to federal candidates, parties, PACs, and 527 organizations during the 2018 election cycle. Steyer has donated $17,300 directly to Whitehouse since 2006, according to the Center for Responsive Politics. He also has taken money from the Sierra Club and the Natural Resources Defense Council.

Whitehouse was also outspoken against the conservative dark money campaigns supporting President Donald Trump's Supreme Court nominees during their confirmation hearings, but he was silent when it came to the dark-money groups opposed to Neil Gorsuch and Brett Kavanaugh.

He said during Gorsuch's hearing back in 2017 that "we have seen reports of a $10 million political campaign to try to influence the Senate in Judge Gorsuch's favor through a front group," referring to Judicial Crisis Network, a conservative judicial watchdog . "We don't know who the real donors are. It's dark money that is behind that entire operation."

Heather McGhee, the the president of Demos, told members of the Senate Judiciary Committee back in 2017 that confirming Gorsuch would lead to "big money corrupting our politics completely," the Washington Free Beacon reported.

Demos does not disclose its donors and was cited by the Center for Public Integrity as a dark money group in January. A review of the 501(c)3 non-profit group's most recent tax forms shows that Demos garnered more than $7 million in contributions in 2014. Seven individuals accounted for more than half of those donations. The group highlighted those seven donations—ranging from $250,000 to $1.425 million—in its documents, but left the identities of those donors blank. The group paid more than $3 million in salaries and wages in 2014, including McGhee's $240,000 compensation.

Whitehouse also didn't call out Demand Justice.  He said last summer he thinks a "smelly special interest network" of dark money was involved in helping Kavanaugh's nomination process, but he did not expand on how he reached his conclusion. Instead, he said there should be a "spotlight" put on the dark money network, but he didn't say anything about the role of Demand Justice or other left-of-center groups, the Free Beacon reported.

Demand Justice is not a standalone organization but rather a "project" of the Sixteen Thirty Fund, a D.C.-based 501(c)(4) "fiscal sponsor" organization.

Fallon, who previously served as Hillary Clinton's press secretary during the 2016 presidential campaign, told CNN last month, "If (Kavanaugh) gets confirmed for the Supreme Court, he will be a reliable vote for special interests," despite his group's strong ties to liberal special interests.

The fiscal sponsor arrangement between Demand Justice and the Sixteen Thirty Fund makes it practically impossible to trace the source of funds that make its way to Demand Justice.

Under this "pass through" arrangement, donors who give to Demand Justice do not have to report the money as going directly to the group and instead mark it as going to the Sixteen Thirty Fund. Organizations that are "fiscally sponsored" also do not have to file tax returns to the IRS due to the sponsorship arrangement, which provides an even greater layer of opacity for the groups.