Watchdog Examines the Many Strands of Secret Political Funding

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March 16, 2012; Source: Center for Responsive Politics

The Center for Responsive Politics has been publishing a series of brief analyses of 501(c)(4) social welfare organizations. The series spotlights groups that have been engaged in extensive partisan political activities with a minimum of public disclosure of their well-heeled donors. The fourth in this series examines the network of organizations affiliated with FreedomWorks, the pro-Tea Party apparatus chaired by former Republican Congressman Dick Armey. Having resigned from the lobbying firm DLA Piper because the firm’s pharmaceutical clients felt that Armey’s Tea Party activism wasn’t helping them, Armey splits his time between the 501(c)(4) FreedomWorks and the 501(c)(3) FreedomWorks Foundation. Although legally separate organizations, the two FreedomWorks organizations share staff and offices. 

In addition, FreedomWorks has a super PAC called FreedomWorks for America—also with the same office address as the (c)(3) and (c)(4)—with much more flexibility about raising and spending money than FreedomWork’s original (i.e., non-“super”) PAC. The largest donor to FreedomWorks for America is the 501(c)(4) FreedomWorks, which isn’t required to disclose its donors. Although PACs do disclosure their donors, FreedomWorks for America would simply list $1.4 million of its $3 million fundraising through January as having come from the 501(c)(4), which doesn’t disclose its donors. 

Here’s the importance of a watchdog like the Center for Responsive Politics. Since the (c)(4) and (c)(3) FreedomWorks organizations don’t disclose their donors, the Center is tracking the 990s of other organizations to spot donations that may have gone at least to the (c)(3), spotting $1 million in 2010 from the Dean and Barbara White Family Foundation, $150,000 from the Lynde and Harry Bradley Foundation, and $125,000 from the Sarah Scaife Foundation (which had pledged another $62,000 for the end of 2010). White, for example, has given $325,000 to Indiana’s Republican gubernatorial candidate, Mike Pence, and White’s company, the privately held Whiteco Industries, gave $1 million to Karl Rove’s American Crossroads super PAC last year.

The Center is splicing together the strands of data—the $1.4 million donated from the FreedomWorks (c)(4) to the super PAC, the $337,000  paid by the super PAC to the (c)(4) as a vendor for having shared its e-mail list and some fundraising costs, and the donations that go to the (c)(3) whose offices and staff overlap with the (c)(4). This is great watchdog work, but it should be unnecessary. Heroic efforts to piece together the funding flows of these political tax-exempt entities shouldn’t be necessary. Information about donors to 501(c)(4)s that link to (c)(3)s and super PACs should be made easily transparent to—and accessible by—the public. Let’s hope that the Center keeps this series going and takes on secretive 501(c)(4)s across the ideological spectrum. Secrecy isn’t good for politics, no matter which political party or which ideological wing practices it.—Rick Cohen