The $50 million Dems - wealthy funders of progressive ‘527’ groups

Boston Phoenix ^ | Issue Date: July 23 - 29, 2004 | BY DAVID S. BERNSTEIN

[weegee]

The $50 million Dems

The real VIPs in the fight to oust George W. Bush won’t be on the FleetCenter stage next week. They’re the wealthy funders of progressive ‘527’ groups.

BY DAVID S. BERNSTEIN

ONE YEAR AGO, conventional political wisdom held that the Democratic presidential nominee would be in trouble right now. After spending all his cash in a tough primary battle, the thinking went, the candidate would have to spend April through June scrambling to raise money for the general campaign. In the meantime, Bush’s team would be free to use that three-month window to define the Democrats’ front-runner through attack ads the latter couldn’t afford to counter.

Things turned out differently: the attack ads flung at Senator John Kerry have not gone unanswered. In fact, in addition to Kerry’s own ads, more than $15 million of political advertising has run in the past three months, most of it bashing Bush, most of it in key battleground states — without costing the Kerry campaign a dime. The ads have been created and paid for by organizations known as "527s," named for the tax-code section that defines them. These groups do not fall under Federal Election Commission regulations, as long as they limit their activities; most significantly, they cannot support a candidate directly or coordinate their efforts with a candidate’s campaign.

They can, however, accept contributions of unlimited size, from anybody. Depending on your perspective, this is either an unsavory back-door maneuver around campaign-finance reform, or an exciting new outlet for political discourse.

Either way, it’s probably a big reason why John Kerry entered July in a dead heat in the polls despite the tens of millions of dollars spent on negative advertising against him — and one of the reasons why Bush’s favorability ratings are at an all-time low.

The best-known of these 527s is probably the MoveOn.org Voter Fund, formed last September by the progressive MoveOn.org group based in Greenbrae, California; its most recent television ad, running in Ohio, blames George W. Bush for losing American jobs to outsourcing. The most ambitious group, however, is an interrelated trio planning to spend more than $100 million on this election: Americans Coming Together (ACT), the Media Fund, and Joint Victory Campaign 2004, all operating out of Washington, DC. Its TV and radio ads include "No Oil Company Left Behind" and "Bush and Halliburton." Another Washington group, New Democrat Network, is taking in and spending about a million dollars a month. Among its projects is an effort to recruit Hispanic voters into the Democratic Party. For the young and hip, there’s Music for America and PunkVoter. Several well-known political-action committees, or "PACs," have started separate 527s (such as EMILY’s List Non-Federal Fund, and Sierra Club Voter Education Fund). And there are issue-specific 527s, including one focused on labor (Voices for Working Families), one devoted to decriminalizing marijuana (Marijuana Policy Project Political Fund), and several committed to environmental issues (League of Conservation Voters, Environment 2004, State Conservation Voters Fund). In all, more than 100 527s filed a quarterly report with the IRS by the July 15 deadline.

The people funding these 527s, with millions of their own dollars, are arguably the Democrats’ 2004 MVPs. Yet with the exception of financier George Soros, who has contributed a total of $12,481,250 in the past year and a half and who has been called to task in no uncertain terms by the GOP, they remain surprisingly unknown to the public and uncovered by the media.

The Phoenix has compiled a list of 12 donors (see below) who chipped in more than $1 million each during the first 18 months of the current campaign cycle — the start of 2003 through the end of June — to Democratic-leaning 527s. Collectively, this dozen has donated just over $50 million.

They are a curious set of characters, ranging from the business elite (George Soros, Lewis Cullman) to the tabloiderati (Stephen Bing, Susie Tompkins Buell), from the well-born (Anne Getty Earhart, Alida Rockefeller Messinger, Linda Pritzker) to the self-made (Andrew Rappaport, Marcy Carsey, Agnes Varis). There’s even a pot-smoking billionaire (Peter Lewis) — and a Republican (John A. Harris).

Thanks largely to their largesse, 527s are, and will continue to be, major players in the 2004 campaign.

"The 527s are independent. I’m not familiar with what their plans are," says Democratic heavy-hitter Alan D. Solomont, of Boston, a major fundraiser for the Kerry campaign. "What they’re doing, I think is terrific."

YOU AND I — people with piddling amounts of money to give — are certainly being solicited by the 527s. But behind closed doors, big-money liberals are getting private-pitch meetings. Former lieutenant-governor candidate Chris Gabrieli also says he’s been pitched to by at least one major 527. And one Massachusetts Democratic Party activist and deep-pocketed philanthropist reports having breakfast recently with Harold Ickes — former White House deputy chief of staff and now president of the Media Fund — and Jonathan Lewis, son of the biggest donor on our list, Peter Lewis.

"The kind of scale they’re talking about is out of my league," he says. Ickes tells the Phoenix that Media Fund and ACT expect to spend between $120 million and $130 million by November.

Congress created 527s 30 years ago, in the wake of Watergate. But only in the mid ’90s did nonprofits (both liberal and conservative) begin to take advantage of them, according to Public Citizen, a public-interest watchdog group, and it took Congress until 2002 to require 527s to fully disclose their donors.

Today’s 527 fever, which is predominantly liberal, is driven partly by anger with the Bush administration, but it’s also been pushed by what Gabrieli calls a "privatization of political activity." He’s referring to the McCain-Feingold campaign-finance law that greatly reduced the amount of money individuals can give to party PACs — and what those PACs can do with the cash. Although 527s had existed previously, most large-money donors preferred to give directly to the party until that law passed in 2002.

"With the advent of McCain-Feingold, suddenly the [political] party wasn’t running the kind of soft-money ads they had in the past," says Deb Callahan, president of the League of Conservation Voters, which operates a 527. "So donors are actively seeking out organizations like mine."

But that means donors must entrust their money to independent groups, many with no history or track record. That’s why Cambridge social activists Greg and Maria Jobin-Leeds, for example, ended up hiring political consultant Mike Folgerberg to help them sort through the dizzying array of 527s before they gave $100,000 to Progressive Majority in January. "There are a lot of them, and almost all of them are new," Maria Jobin-Leeds says. Progressive Majority, founded in 1999, is positively ancient among 527s; dozens have been created in the last 12 months.

Steve Grossman, former co-chair of Howard Dean’s presidential campaign and onetime candidate for governor of Massachusetts, says he’s had three meetings with 527 executives. He’s decided to work with the Kerry campaign instead, but he likes what those groups are doing. "At the beginning of this campaign, the Republicans thought they would have a three- or even five-to-one money advantage," Grossman says. "The 527s grew out of a deep concern that the values of the Democratic Party couldn’t compete."

Grossman had to choose between Kerry and the 527s, because 527s are absolutely not allowed to coordinate their activities in any way with the Democratic Party. But how much coordination do you really need? "Anybody with any brains knows where the battleground states are, and where to spend the money," Grossman says.

Besides, these organizations aren’t run by hicks — a lot of their leaders are former party insiders, like Ickes at the Media Fund. Former Kerry campaign manager Jim Jordan is a strategy consultant for the Media Fund and America Coming Together. Or, take the New Democratic Network (NDN). Its president, Simon Rosenberg, is a veteran of the Democratic National Committee and former adviser to the Bill Clinton and Michael Dukakis presidential campaigns. Senior vice-president Maria Cardona is a former Democratic Party communications director. The NDN advisory board includes former chairs of the Democratic National Committee, Democratic Congressional Campaign Committee, and Democratic Leadership Council, as well as a former White House chief of staff and a former White House press secretary.

These organizations are sophisticated enough to have found a way to wriggle out of a legal straitjacket, a rule requiring 527s to spend less than half their money on federal campaign activities. They move the money around. The Media Fund runs advertising campaigns that are considered federal spending; its sister 527, Americans Coming Together (ACT), does "grassroots" polling and voter registration that counts as state and local spending. The Media Fund gives just over half its contributions to ACT, which counts as spending on local activities, and thus complies with the rule. Contributions to Joint Victory Campaign are split between Media Fund and ACT.

Needless to say, campaign-reform advocates, such as Common Cause, call this money-laundering, a dirty scheme for getting around the law. Republicans, meanwhile, had been caught napping; their success with "bundled" fundraising (in which "pioneers" reap rewards for soliciting contributions from many other individuals) led them to overlook the potential in 527s. This is one time liberals seem to have outfoxed the right. Thus far, the Republicans’ vigorous legal efforts to stop 527s have failed, and now they’re scurrying to set up their own.

TO THOSE WHO dislike the fact that 527s can accept limitless donations, supporters like Callahan point out that givers are cut off from the candidate completely, and thus cannot be involved in any sort of quid pro quo or pay-for-access arrangement. That claim’s a stretch — a half-million donation to a Democratic-leaning 527 surely has more value to John Kerry than $2000 given to his personal campaign, so it’s at least as likely to be tainted. But in reality, the wealthy have always given huge sums to progressive organizations — through 501(c)(3) organizations, which are your common, everyday foundation. Those groups can’t get away with the kind of electioneering that 527s can, but they come awfully close. So, if nobody’s had a problem with huge donations to 501s, why the grousing about 527s? At least with 527s, unlike 501s, the donations are publicly reported.

Even so, with such large amounts of money involved, the question remains whether these mega-donors are in the game to advance their own self-interest. Grossman, who knows "some of the individuals" on the $50 million–Dems list, says that the ones he knows give based purely on ideology. "They have a passionate belief in America, a passionate belief in inclusion, and a passionate belief that people should participate in a democracy," he says. "I have an enormous respect for what they are doing."

So does Scott Klinger, co-director of Responsible Wealth, a Boston-based organization through which rich people lobby against their own financial interests — in favor of the estate tax, for example. "People giving to 527s, they’re not looking for a payoff," Klinger says. "George Soros has enough money, he could buy a small island and never deal with any of us again."

Corporations have been known to cover their bets by contributing to both the Democratic and Republican Parties, but the donors on our Dirty Dozen list are not playing both sides. Not one of the 12 has given to a Republican or conservative cause in this election cycle.

For their trouble, these big givers are setting themselves up as targets for the right wing. So far, Soros has been the only one publicly hit: the National Republican Senatorial Committee has labeled him an "out-of-touch, left-wing radical" with an "extreme agenda." Ickes says he has had meetings with people who would like to give, but don’t want that kind of public grief. "They’re not naive — when you weigh in against this president, that’s what you’ll get."

And lastly, remember that the jaw-dropping chunks of cash listed below should be viewed in context. A few years ago, Peter Lewis bought a yacht for $16.5 million; that he is willing to spend as much on the future of the free world should perhaps not be so surprising.

THE DEMS’ DIRTY DOZEN

1) Peter B. Lewis

Chair, Progressive Corp., Cleveland, Ohio

$14,038,000 total election-cycle contributions

• $14,030,000 to 527s

$7,750,000 Joint Victory Campaign

$2,995,000 America Coming Together

$2,500,000 MoveOn

$485,000 Marijuana Policy Project

$250,000 Young Democrats of America

$50,000 PunkVoter

• $8000 in hard money

Lewis is chair of Progressive Corp., the automobile-insurance company, which he took over from his father in 1965. He has done well with it: Lewis, 68, has a net worth estimated by Forbes at $1.1 billion.

A lover of art and architecture, he has given huge sums in the past to museums and other institutions. Political giving, and progressive causes in particular, seem to be a more recent avocation. In the late 1990s, Lewis donated relatively small amounts to candidates of both parties. In the last presidential contest, he gave $500 to George W. Bush and $2000 to Ralph Nader. Apparently, his mind has changed.

Oh, yes — he’s also a known pothead. "Marijuana is, for almost everybody who uses it, a positive," Lewis told the Cleveland Plain Dealer in 2002. This was two years after he got caught leaving New Zealand with hashish and marijuana.

2) George Soros

Chair, Soros Fund Management, New York City

$12,481,250 total election-cycle contributions

• $12,400,000 to 527s

$5,000,000 America Coming Together

$4,550,000 Joint Victory Campaign

$2,500,000 MoveOn

$300,000 Campaign for America’s Future

$50,000 New Democrat Network

• $81,250 in hard money

International financier George Soros, worth an estimated $7 billion, according to Forbes magazine, has been the most visible face of the 527s. His contributions have been profiled in USA Today, the Wall Street Journal, and elsewhere. In the past, Soros’s philanthropy has been relatively apolitical, but voluminous: he gives $450 million a year through his Open Society Institute to promote freedom worldwide, according to his spokesperson, Michael Vachon.

The Bush administration’s foreign policy, which Soros took to task in his recent book The Bubble of American Supremacy: Correcting the Misuse of American Power, seems to have driven his desire to influence the upcoming election. "Soros has never given to Democrats before," Ickes says. "He is very outspoken and articulate about his deep, deep concern about where George Bush is taking this country, both abroad and domestically."

3) Stephen Bing

Writer/producer, Encino, California

$8,210,424 total election-cycle contributions

• $8,186,924 to 527s

$6,964,846 Joint Victory Campaign

$971,427 MoveOn

$150,000 Americans for Progress and Opportunity

$100,651 Campaign for America’s Future

• $23,500 in hard money

Bing is almost certainly the only person on this list who has had sex with Elizabeth Hurley. Grandson of New York real-estate mogul Leo Bing — and heir apparent to a reported $600 million — 39-year-old Stephen has led a Hollywood-playboy life that includes a tabloid-cover child-support battle with Hurley and dueling lawsuits with Sean Penn. His film credits include directing the forgettable 1993 Judd Nelson thriller Every Breath, writing the screenplay for 2003’s Kangaroo Jack, and producing 2004’s The Big Bounce.

This is not Bing’s first political plunge; in 2002 he gave $8,675,000 to the Democratic Party in soft-money donations, making him the second-largest giver (behind Mighty Morphin’ Power Rangers TV producer Haim Saban) during that election cycle. Bing also gave $900,000 to John Edwards’s New American Optimists PAC in 2002.

4) Linda Pritzker

Investor, Houston, Texas

$4,005,000 total election-cycle contributions

• $4,000,000 to 527s

$4,000,000 Joint Victory Campaign

• $5000 in hard money

This reclusive 50-year-old daughter of Robert Pritzker is heir to a good portion of the Hyatt hotel fortune, estimated at $15 billion total. She has given $900,000 to the Joint Victory Campaign (JVC), but the Washington Post has reported that she is also the person behind the shadowy Sustainable World Corporation, which has given an additional $3.1 million to JVC since appearing out of nowhere last December.

Pritzker has made no public comments about her contributions, which appear to be her first foray into direct political activism.

5) Andrew S. Rappaport

Partner, August Capital, Redwood City, California

$3,054,000 total election-cycle contributions

• $3,000,000 to 527s

$1,450,000 New Democrat Network

$1,300,000 Music for America

$200,000 Democrats 2000

$50,000 America Votes

• $54,000 in hard money

Venture capitalist, director of tech companies such as Silicon Image, former Boston-based management consultant, and founder of the Massachusetts Center for Technology Growth, Rappaport (no relation to Jim Rappaport, who ran for lieutenant governor in 2002) jumped aboard the Howard Dean bandwagon and now funds 527s that encourage left-leaning voter participation, particularly among the young. At 46, and with three teenage daughters, Rappaport is taking a "venture philanthropy" approach to his political giving.

"I’ve been doing start-up companies for 20 years," Rappaport says. He and his wife, Deborah, along with former Nirvana bassist Kris Novoselic, make up the Music for America board of directors. That 527 organization is funding a variety of efforts aimed at engaging young voters, something he says the Democratic Party has failed to do. "We asked party people in 2000 and 2002, why they weren’t doing outreach to young people," Rappaport says. "They said, ‘Old people vote.’ We said yes, but they also die."

6) Lewis Cullman

CEO, Cullman Ventures Inc., New York City

$1,764,500 total election-cycle contributions

• $1,650,000 to 527s

$1,000,000 Joint Victory Campaign

$500,000 Americans Coming Together

$100,000 MoveOn

$50,000 Americans for Jobs

• $114,500 in hard money

Cullman’s autobiography, which came out this April, is titled Can’t Take It with You: The Art of Making and Giving Money, which sums up what you need to know about him. Cullman has made a fortune through leveraged buy-outs (he owns the At-A-Glance company that makes those ubiquitous day planners), and with his wife, Dorothy, has given away millions through philanthropy — the couple was once cited as the third-biggest giver in the country by Slate. Last July, Cullman co-sponsored a newspaper ad with George Soros decrying the Iraq war, and he has continued to spend money to oppose Bush.

7) Agnes Varis

President, AgVar Chemicals, New York City

• $1,267,750 total election-cycle contributions

$1,155,000 to 527s

$1,255,000 Joint Victory Campaign

• $112,750 in hard money

"Agnes is just appalled by the Bush agenda," says Ickes. Varis, a Lowell native, is a long-time Democratic Party contributor and philanthropist. (The only Republican she has funded is John McCain.) Her MAKK Foundation supports animal shelters, and she has for years backed the Tufts University School of Veterinary Medicine. In 2000, she endowed a chair in science and society at Tufts with a $2 million gift.

8) John A. Harris IV

Retired, Berwyn, Pennsylvania

$1,243,000 total election-cycle contributions

• $1,224,000 to 527s

$978,000 League of Conservation Voters

$160,000 State Conservation Voters

$28,000 Sierra Club

$28,000 Defense of Wildlife

$20,000 Progressive Majority

$10,000 MoveOn

• $19,000 in hard money

Harris, a retired investment banker and an heir to the Standard Oil fortune, is a long-time contributor to environmental organizations, but not previously much of a player in partisan politics — and when he has gotten involved, it has been as a Republican. "He’s a very private person," says Callahan, of the League of Conservation Voters. "He does politics because he wants environmental results."

9) Alida R. Messinger

Trustee, Rockefeller Family Fund, New York, New York

$1,177,000 total election-cycle contributions

• $1,133,000 to 527s

$500,000 Americans Coming Together

$500,000 League of Conservation Voters

$133,000 State Conservation Voters

• $44,000 in hard money

The "R" stands for Rockefeller. A major donor to conservation and environmental groups, financial backer of the Center for Public Integrity, Messinger also made big, big contributions to Democratic Party committees until those donations were capped. Hence the half-mil to ACT. Callahan calls her a "committed environmentalist, focused on philanthropy and raising her family."

10) Susie Tompkins Buell

Founder, Susie Tompkins Buell Foundation, San Francisco

$1,068,225 election-cycle contributions

• $1,010,000 to 527s

$1,000,000 Joint Victory Campaign

$10,000 EMILY’s List

• $58,225 in hard money

Buell founded the Esprit de Corps clothing company, which she left in 1996. Or, she "built, wrecked, and sued" the company, according to the San Francisco Weekly. Through her foundation, she funds projects to empower women and girls; she also gives to the arts and other philanthropies. She is a stalwart Democratic Party funder and certified Friend of Bill Clinton.

11) Marcia L. Carsey

Co-owner, Carsey-Warner Productions, Los Angeles

$1,065,500 total election-cycle contributions

• $1,000,000 to 527s

$1,000,000 Joint Victory Campaign

• $65,500 in hard money

After you create The Cosby Show, you’re pretty well set for money. The 59-year-old South Weymouth native is a solid Democrat who agreed to pony up a cool million to the Joint Victory Campaign. She is also a founding member of Women’s Enterprise Development Corporation, Women Incorporated, and the Center for Cultural Innovation.

12) Anne Getty Earhart

Investor, Corona del Mar, California

$1,007,000 total election-cycle contributions

• $1,000,000 to 527s

$1,000,000 Joint Victory Campaign

• $7000 in hard money

Granddaughter of J. Paul Getty, she inherited $400 million when Texaco bought Getty Oil, in 1986. Very low-profile, she has contributed to environmental causes in the past, and occasionally to campaigns, including Barbara Boxer’s. This appears to be her first major political contribution.

David S. Bernstein can be reached at dbernstein@phx.com. Research assistance was provided by Phoenix intern Jocelyn Brick-Turin.

[Cacique]

What we need are conservative "527" groups.

[Drango]

Responsible Wealth, a Boston-based organization through which rich people lobby against their own financial interests

LOL

[weegee]

BTTT

[Puddleglum]

It will be nice to see Bush win and think of all the millions these people have flushed down the toilet - or rather, the John.

[Puddleglum]

they cannot support a candidate directly or coordinate their efforts with a candidate’s campaign.

I wonder what would constitute proof of "coordination"? A common objective? A synchronized marketing strategy? Quite an ambiguous word there.

[manic4organic]

"This reclusive 50-year-old daughter of Robert Pritzker is heir to a good portion of the Hyatt hotel fortune, estimated at $15 billion total."

No more lodging there for my family.

[weegee]

I thought this blew up months ago when the Kerry Campaign was ALREADY caught coordinating efforts with MoveOn.

[stillonaroll]

The $50 million Dems - wealthy funders of progressive ‘527’ groups

THE DEMS’ DIRTY DOZEN: 1) Peter B. Lewis, Chair, Progressive Corp., Cleveland, Ohio

[Contributed] $14,030,000 to [left wing] 527s

Lewis is chair of Progressive Corp., the automobile-insurance company...

No conservative should do business with Progressive Auto Insurance. Ever. Cancel your policy and go elsewhere.

I did, and am saving about 40% with another auto insurance company. Fortunately, I had heard about the Progressive poobah's leftist leanings on a previous FR thread. Thank you FR!

[zeaal]

Thanks for posting.

[Cacique]

Time to bump this puppy nd make sure people see it.

[Extremely Extreme Extremist]

BUMP

[Cacique]

BUMP BACK AT YA

[Sicon]

" Yet with the exception of financier George Soros, who has contributed a total of $12,481,250 in the past year and a half and who has been called to task in no uncertain terms by the GOP, they remain surprisingly unknown to the public and uncovered by the media.

I'm not surprised. Are you surprised?

[The Scourge of Yazid]

If only we had listened to Mitch McConnell.

Okay, so he's not the ideal spokesman for the GOP, but the guy was on the money when it came to this issue.

[Cacique]

What irks me is that the right still plays by Queensbury rules both at home and aborad. Every time they kick us in the nuts we smile and say now that's not nice. Instead we ought to go by Chicago rules, "they bring a knife, you bring a gun". The guys who run the RNC and coinservatives in genereal still can't seem to bring themselves to take off the gloves.

[The Scourge of Yazid]

Exactly!

"The Untouchables" is a great analogy.

These guys are patterning themselves after Al Capone, while we're modeling our strategy not after his counterpart, Eliot Ness, but after the Marquis de Queensbury.

Something has to change if the GOP expects to actually win this thing, instead of being bloodied by a group that doesn't play by the same rulebook.

[nopardons]

BTTT

[Cacique]

[BunnySlippers]

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