American Encore

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This article is part of the Center for Media & Democracy's spotlight on front groups and corporate spin.

American Encore is a secretive non-profit group (formerly known as the Center to Protect Patient Rights) organized under Section 501(c)(4) of the tax code that funneled more than $182 million in undisclosed donations to right-wing advocacy groups from 2009 to 2012, including Americans for Prosperity and the American Future Fund.[1] The Washington Post described it as a "major cash turnstile for groups on the right during the past two election cycles," because it received large amounts of funding from Freedom Partners and TC4 Trust as part of the $400 million Koch political network.[2] In 2012, the group's role as a part of an $11 million campaign money laundering shell game was revealed after the California Fair Practices Commission filed suit against one of its donors and recipients, Americans for Responsible Leadership.[3]

F.E.C. Fines Former Koch Groups For President Sean Noble's Illegal Activities

The F.E.C. fined the 60 Plus Association, Americans for Job Security, and American Future Fund for breaking federal disclosure rules.[4] According to the New York Times,

"The F.E.C. found that Sean Noble, a political consultant then working with the Kochs, had closely directed the spending of the grants by the other organizations, even picking the races where ads were to be run. That violated federal rules requiring organizations to identity the source of any money earmarked for a political expenditure, the commission determined."[4]

The Citizens for Responsibility and Ethics, the organization that filed the complaint which resulted in the fine, reported that the 3 groups will have to pay $233,000 in penalties.[5]

Koch Wiki

The Koch brothers -- David and Charles -- are the right-wing billionaire co-owners of Koch Industries. As two of the richest people in the world, they are key funders of the right-wing infrastructure, including the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN). In SourceWatch, key articles on the Kochs include: Koch Brothers, Koch Industries, Americans for Prosperity, American Encore, and Freedom Partners.

Ties to the Koch Brothers

The $400 million Koch network.
The $400 million Koch network uses a maze of nonprofit groups and LLCs to conceal donations and campaign activity
Source: Robert Maguire with the Center for Responsive Politics. Matea Gold and Cristina Rivero/The Washington Post.

In March 2014, the Wall Street Journal reported that American Encore was founded by political operative Sean Noble and financed in part by the Koch brothers.[6]

According to the CPPR's 2009 and 2010 tax filings, the group is run by Sean Noble, who Politico has described as a "Koch operative". [7] Noble was also part of a group of GOP operatives who met regularly with Karl Rove’s American Crossroads to target 120 House of Representatives races in 2010. [7] Noble was hired by the Kochs to coordinate with other conservative Super PACs to target Democratic representatives in 2010. [8] Other individuals associated with the group also have Koch ties. Consultant Cheryl Hillen has raised at least $2.6 million for the organization and was formerly director of fundraising for the Koch Brothers-backed Citizens for a Sound Economy (which later split into Americans for Prosperity and Freedomworks). One of CPPR's original directors, Heather Higgins, is chairwoman of the Independent Women's Forum, a climate change denialist group that has received Koch money and was previously run by a Koch lobbyist.[9]

CPPR Involved in Koch Network Dark Money Ring

The Center to Protect Patient Rights CEO Sean Noble is a major Koch agent, and his organization has deep links with the Koch network, according to a 2014 exposé published by ProPublica.[10] The Center was a major intermediary in the hazy patchwork of organizations used to pump money into politics, most notably the 2012 elections, according to ProPublica's research. At the top of the dark money chain of command were Freedom Partners Chamber of Commerce and TC4 Trust, who disburse money to Sean Noble at CPPR, but also straight to smaller, politically involved non-profits. ProPublica details another layer of the operation, in which Sean Noble led the way by establishing "disregarded entities" that were attached to the Center, but given their own inconspicuous acronym to make them appear unrelated to the Center. This same strategy was duplicated by other Koch-backed non-profits until about 20 "disregarded entities" were created to make flows of money between organizations like Freedom Partners and CPPR even less comprehensible.[10]

In the second half of 2011, the Koch network shuffled more than $204 million to the newly established "disregarded entities," and ProPublica tracked $115 million of this from Freedom Partners to one of CPPR's disregarded entities called Corner Table. From there, the money was sent out to the organizations that would ultimately engage in political spending. But with the new strategy in place, it looked as though the money was broadly distributed. Barker and Meyer wrote, "At least 20 nonprofits across the country received at least half of their revenue from the Center, Freedom Partners or both."[10] The reporters also explained the role of CPPR's CEO in the shell game: "Noble helped to run or incorporate no less than three groups named American Commitment at one point or another. One of them got almost 97 percent of its $11.7 million in revenue in 2012 from the Center, Freedom Partners and Americans for Responsible Leadership."[10]

After reviewing the 2012 FEC filings of recipient organizations, the ProPublica writers concluded that $30 million coming from Freedom Partners and the Center was spent on "political activities" during the 2012 cycle by groups like the American Future Fund, Americans for Responsible Leadership, and American Commitment. Both the Center to Protect Patient Rights and Freedom Partners responded "no" to a question on their 2012 IRS filings that asked if they had spent any money towards political ends.[10]

Election Activity

Dark money groups funded by American Encore spent more during the 2012 election cycle than liberal groups and unions have spent since the Citizens United decision.
Source: OpenSecrets.org
The Koch network was one of the biggest political operations in 2012 and worked largely outside the campaign finance system, raising at least $407 million. Source: Robert Maguire with the Center for Responsive Politics.

2014

In March 2014, CNN reported that American Encore "plans to spend $10 million this midterm cycle against Democrats who have been critical of outside campaign spending"[11] According to the Wall Street Journal, Sean Noble "said the group will highlight any issue it views as "a threat to free enterprise and the free enterprise system,” including the proposed IRS rules and the 2010 health law."[12]

National Ads Attack Democrats on Healthcare

Stop Attacking Free Speech

On May 20, 2014, American Encore announced a national ad campaign, run jointly with a group called American Commitment, targeting Democrats on the topic of the 2010 Affordable Care Act. According to American Encore, the first part of the campaign, "Fix it Fail," "commit[ed] an initial $100,000 to an aggressive paid and earned media effort" related to the law.[13] The ad includes clips of eight Democratic Senators: Mark Begich (D-AK), Al Franken (D-MN), Kay Hagan (D-NC), Kirsten Gillibrand (D-NY), Mary Landrieu (D-LA), Mark Pryor (D-AR), Jeanne Shaheen (D-NH), and Mark Warner (D-VA). According to the Washington Times the ad "features the Democratic Senate incumbents insisting the Affordable Care Act can be repaired after its disastrous October roll-out, then shows other top Democrats saying there are no plans for a legislative fix."[14]

Support for IRS Bill

The CPPR was one of 60 right-wing groups that signed a February 25, 2014 letter to Congress in support of the Stop Targeting of Political Beliefs by the IRS Act of 2014. According to OpenSecrets, the act would "block the IRS for one year from implementing new rules to define and limit political activity by “social welfare” nonprofits."[15] One day later, the group, now under the name "American Encore," also filed a comment together with the Center for Individual Freedom and American Commitment.[15]

Ads Attacks Supporters of Limits on Political Spending by Nonprofits

Stop Attacking Free Speech

American Encore spent $30,000 for an ad released March 31, 2014 attacking Senator Harry Reid (D-NV) on the topic of limits on political activity by nonprofits. The ad accuses Reid of "attacking free speech." According to Politico, the following day Reid "called American Encore one of the Kochs’ 'puppet organizations,' likening it to Americans for Prosperity" and saying, "To any and all groups who wish to attack me on behalf of multibillionaires, fire away … I am very happy, I’m proud to be the target of those attacks. I will gladly endure them in order to call attention to the unscrupulous acts of these two barons."[16] Reid will not be up for re-election until 2016.[11]

American Encore appeared to be targeting Minnesota Senator Al Franken (D) in his 2014 re-election race. The group spent about $250,000 on a 60-second ad against Franken that began running on March 26, 2014. The Wall Street Journal described the ad as "criticizing Mr. Franken for supporting additional restrictions on tax-exempt issue-advocacy groups" and stated that the ad "derides efforts by the IRS and Senate Democrats to impose new rules on these nonprofits, citing complaints by the American Civil Liberties Union. 'Tell Sen. Franken to stop attacking free speech,' the narrator says."[12]

California's $11 Million "Campaign Money Laundering" Investigation and Fine

In 2012, CPPR came under scrutiny during an investigation of a "campaign money laundering"[3] shell game. The Arizona-based 501(c)(4) Americans for Responsible Leadership (ARL) made an $11 million donation to the Small Business Action Committee PAC in California, which spent those funds to oppose Proposition 30 (which would raise taxes on millions) and Proposition 32 (which would prohibit labor unions from raising money for political activities through employees' voluntary payroll deductions).[17] California's elections board did not buy ARL's claim that its donors had given $11 million for reasons other than funding ads to influence these ballot issues and demanded it reveal its funders.[18] ARL spent $11 million on ballot initiatives through a donation of that sum to the Small Business Action Committee PAC (SBAC) in October 2012.[19]

After initial resistance, ARL revealed that it had received $11 million in contributions for the purpose of funding ballot initiatives from another dark money nonprofit, Americans for Job Security (AJS), a group that received its funding from none other than the CPPR. According to the California Fair Political Practices Commission, "Under California law, the failure to disclose this initially was campaign money laundering." [3]AJS not only gets funding from CPPR, but is housed in the same offices as Karl Rove's American Crossroads SuperPAC.[20]

While in 2010, CPPR gave $4.8 million to AJS, a sum that was used on anti-Democrat attack ads, in 2012, AJS gave $11 million to CPPR, which gave the money to ARL. ARL then passed the $11 million to the SBAC, indicating that some of the money flow between the organizations has been reversed.[20] The money seems to have moved from one group to another in the span of a few days.[19]

In a settlement with California Attorney General Kamala D. Harris and the Fair Political Practices Commission, the CPPR and Americans for Responsible Leadership agreed to pay a $1 million fine and AJS and SBAC must turn over the $15 million in contributions they received.[21] According to the press release from the Fair Political Practices Commission, "Under California law, the failure to disclose this initially was campaign money laundering. At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history."[22]

Sean Noble the head of CPPR argued that the fine was "over-reach", that he followed all laws and that prosecutors violated what he claimed were "First Amendment" right of the donors whose identities he had refused to disclose. Gary Winuk, the FPPC's chief of enforcement, responded: "Sean Noble agreed to and paid a record fine on behalf of the Koch network for a reason. It was the largest amount of undisclosed dark money in the history of California. His vain attempts to try to minimize the case should not serve to give comfort to anyone who tries to hide money in California, because we are prepared to confront them at every turn." [23]

Ties to the Coalition to Protect Patient Rights?

The Center to Protect Patient Rights appears to have ties to the similarly-named Coalition to Protect Patient's rights, whose records are stored at the same Glendale, Ariz., address by a woman who describes herself as an employee of DCI Group, a lobbying firm practiced in manufacturing "grassroots" campaigns for the tobacco industry and others that has handled public relations for the Coalition. But the Coalition's spokesman, physician and lawyer, Donald Palmisano, told OpenSecrets Blog in 2011 he'd never heard of CPPR, as did a publicist with DCI Group. [24]

However, the coalition received nearly $1.6 million from CPPR in 2011, as well as $1.9 million in 2009 and $205,000 in 2010.

"According to its most recent Form 990, obtained by OpenSecrets Blog, the Coalition paid Mentzer Media $1.4 million in 2011 for "media strategy and ad buy." That expenditure along accounted for nearly all of the Coaltion's spending in 2011, and all of the money it received from CPPR. Though it has never reported any spending on federal candidates to the Federal Election Commission, the Coalition was listed as one of the groups mounting an attack against Ohio Democratic Senate candidate Sherrod Brown, according to the Huffington Post; Brown won his race." [24]

History

Jane Mayer details the founding of the Center to Protect Patient Rights, which would become American Encore in her book Dark Money,

On April 16, 2009, Noble and (Randy) Kendrick began putting their plan in place when the Center to Protect Patient Rights (CPPR) was incorporated in Maryland. Physically, the organization existed only as a locked, metal mailbox, number 72465, inside the Boulder Hills post office at the edge of a desert road north of Phoenix...The effort was surrounded in such secrecy that when Noble was asked in a 2013 deposition who hired him, he declined to answer, citing confidentiality agreements."[25]

Finances

2014[26]

  • Total Revenue: $3,154,451
  • Total Expenses: $7,895,618
  • Net Assets: $3,519,473

Note: American Encore paid two independent contractors a total of $1,830,146 in consulting fees. JDA Frontline, a PR firm, received $120,347 and Sean Noble's DC London, Inc. received $1,709,799.[26]

2013[27]

  • Total Revenue: $2,240,372
  • Total Expenses: $9,038,193
  • Net Assets: $8,260,640

Note: American Encore paid two independent contractors a total of $3,626,031. Legal firm Segal & Kirby was paid $1,501,031 and the consulting firm DC London, run by Sean Noble, received $2,125,000 and was reimbursed an additional $542,719 for "program expenses".[27]

2012[28]

  • Total Revenue: $146,569,081
  • Total Expenses: $136,880,651
  • Net Assets: $15,058,461

Note: Although the Center does not pay founder Sean Noble a salary, it paid his firms Noble & Associates $270,149 for management services, Angler LLC $2,824,345, and DC London $4.96 million for management and consulting services plus $15,783,401 to reimburse costs for program expenses. According to a ProPublica report, "What costs DC London could have incurred remain a mystery: The Center’s work mostly consisted of directing grants to other nonprofits, and it doesn’t appear to have offered any programs. (The Center also spent $50,000 on what its tax return described as “occupancy,” a term usually used to mean rent, even though the Center’s lawyer told ProPublica in an email that the group had no office.)...One of the biggest beneficiaries of the Koch network’s money was Sean Noble himself...The Center paid three firms owned by Noble almost $24 million for consulting and other services in 2012—or more than $1 of every $6 it spent."[29]

2011[30]

  • Total Revenue: $23,747,837
  • Total Expenses: $21,598,170
  • Net Assets: $5,370,031

Note: Two consulting firms run by Noble, DC London and Noble & Associates, were paid a total of $3.1 million by CPPR.

2010[31]

  • Total Revenue: $61,841,262
  • Total Expenses: $60,245,391
  • Net Assets: $3,220,364

2009[32]

  • Total Revenue: $13,656,712
  • Total Expenses: $12,048,952
  • Net Assets: $1,607,760

In 2009, the Center to Protect Patient Rights took $13.7 million in contributions although its tax return states that it did not engage in fundraising activities, as noted by Bloomberg BusinessWeek in 2012.[33]

Grant Recipients

2014

American Encore reported to the IRS that they gave out a total of $3,675,150 in grants to 9 different organizations in 2014:[34]

2013

2012

2011

2010

2009

According to their 990 tax filings for 2009, the Center to Protect Patient Rights distributed a total of $10,783,500 in grant funding to the following 12 organizations:[35]

The 990 filing also notes that the organization gave $190,000 to Noble & Associates, a firm owned by CPPR's CEO Sean Noble.[36]

Personnel

As of November 2015:[26]

Staff

  • Sean Noble, President and Treasurer
  • Dr. Courtney Kosher, Secretary

Board of Directors

  • Sean Noble, Executive Director
  • Dr. Courtney Kosher, Director
  • Christopher Ashton, Director

Contact Information

American Encore
PO Box 72465
Phoenix, AZ 85050
Phone: (925)-452-7771
Website: http://americanencore.org
Email: http://americanencore.org/contact
Twitter: https://twitter.com/AmericanEncore
Facebook: https://www.facebook.com/AmericanEncore1/

Articles and resources

Related SourceWatch articles

References

  1. ↑ Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014.
  2. ↑ Matea Gold, "Koch-backed political coalition, designed to shield donors, raised $400 million in 2012," Washington Post, January 5, 2014.
  3. ↑ 3.0 3.1 3.2 "Americans for Responsible Leadership Admits Campaign Money Laundering, Discloses $11 Million Donor", "California Fair Political Practices Commission", November 5, 2012.
  4. ↑ 4.0 4.1 Nicholas Confessore, Three Nonprofits, Former Koch Brothers’ Associates, Fined by F.E.C., New York Times, July 13, 2016.
  5. ↑ The Citizens for Responsibility and Ethics, Koch Brothers Groups Hit With Massive Fines From CREW Complaint, The Citizens for Responsibility and Ethics, July 13, 2016.
  6. ↑ Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014.
  7. ↑ 7.0 7.1 Ken Vogel, Kochs brothers' plan for 2012: raise $88 million, Politico, Feb. 11, 2011.
  8. ↑ Lee Fang: Koch Operative Steered $55 Million To Front Groups Airing Ads Against Democrats; Ads Assailed Candidates Over Abortion, 9/11, Medicare, Republic Report, May 19th, 2012
  9. ↑ Brendan Fischer, Americans for Job Security Targets WI GOP Senate Race, From the Shadows, PRwatch, Aug. 10, 2012.
  10. ↑ 10.0 10.1 10.2 10.3 10.4 Kim Barker and Theodoric Meyer, “The Dark Money Man: How Sean Noble Moved the Koch’s Cash into Politics and Made Millions,” ‘’ProPublica’’, February 14, 2014.
  11. ↑ 11.0 11.1 Peter Hamby, "Harry Reid push called 'un-American' in new ad​," CNN, March 31, 2014. Accessed June 3, 2014.
  12. ↑ 12.0 12.1 Patrick O'Connor, "Sen. Franken Draws Attack Ad From American Encore," Wall Street Journal, March 25, 2014. Accessed June 3, 2014.
  13. ↑ American Encore, "[“Fix It Fail” Campaign Slams Democrats for Cynical “New Obamacare Lie”," organizational press release, May 20, 2014. Accessed June 9, 2014.
  14. ↑ Valerie Richardson, "Ad calls Democrat vows to fix Obamacare a new lie," The Washington Times, May 20, 2014. Accessed June 9, 2014.
  15. ↑ 15.0 15.1 Robert Macguire, "An Encore for the Center to Protect Patient Rights," OpenSecrets, March 5, 2014. Accessed June 3, 2014.
  16. ↑ Burgess Everett, "Harry Reid: Paul Ryan budget creates 'Koch-topia'," Politico, April 1, 2014. Accessed June 3, 2014.
  17. ↑ Andy Kroll, "California's Biggest 'Campaign Money Laundering' Scheme, Revealed- Kinda", "Mother Jones", November 5, 2012.
  18. ↑ Ian Lovett, "California: Lawsuit Seeks Name of Political Donors", October 25, 2012.
  19. ↑ 19.0 19.1 Chris Megerian and Patrick McGreevy "Disclosure by Arizona nonprofit shows ties to Koch brothers", LA Times Blog, November 5th, 2012.
  20. ↑ 20.0 20.1 Brendan Fischer, "California Elections Board Peels Back Layer of Dark Money Onion, Finds More Onion", "PR Watch", November 6, 2012.
  21. ↑ Nicholas Confessore, "Group Linked to Kochs Admits to Campaign Finance Violations," New York Times, October 24, 2013.
  22. ↑ California Fair Political Practices Commission, "Americans for Responsible Leadership Admits Campaign Money Laundering, Discloses $11 Million Donor," organization website, accessed April 29, 2014.
  23. ↑ Sacramento Bee, "Sean Noble Speaks Out About 1 Million FPPC Fine," April 7, 2014.
  24. ↑ 24.0 24.1 Novak, Viveca. Center to Protect Patient Rights Gave Millions in 2011 to Outside Spenders in Election Accessed 12/17/2012.
  25. ↑ Jane Mayer, [Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right], 2016.
  26. ↑ 26.0 26.1 26.2 26.3 American Encore, 2014 IRS 990, American Encore", November 11, 2015.
  27. ↑ 27.0 27.1 27.2 American Encore, 2013 IRS Form 990, organizational tax filing, accessed October 19, 2015.
  28. ↑ 28.0 28.1 Center to Protect Patient Rights, "2012 IRS 990 Filing," National Center for Charitable Statistics, accessed April 4, 2014.
  29. ↑ Kim Barker and Theodoric Meyer, "The Dark Money Man: How Sean Noble Moved the Kochs’ Cash into Politics and Made Millions," ProPublica, February 14, 2014.
  30. ↑ 30.0 30.1 Center to Protect Patient Rights, "2011 IRS 990 Filing,"Center to Protect Patients Rights, February 19, 2015.
  31. ↑ 31.0 31.1 Center to Protect Patient Rights, "2010 IRS 990 Filing,"Center to Protect Patients Rights, May 16, 2013.
  32. ↑ Center to Protect Patient Rights, "2009 IRS 990 Filing,"Center to Protect Patients Rights, November 6, 2010.
  33. ↑ Alison Fitzgerald and Jonathan D. Salant, Secret Political Cash Moves Through Nonprofit Daisy Chain, BloombergBusinesweek, October 15, 2012.
  34. ↑ American Encore, 2014 IRS Form 990, organizational tax filing, accessed June 28, 2016.
  35. ↑ Center to Protect Patient Rights, "2009 IRS form 990", organizations 990 tax filing, Accessed June 29, 2016.
  36. ↑ Center to Protect Patient Rights, "2009 IRS form 990", organizations 990 tax filing, Accessed June 29, 2016.
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