In late October and early November, a dramatic legal battle played out in California between the state’s campaign finance watchdog and a little-known Arizona non-profit named Americans for Responsible Leadership.
It began on Oct. 15, when Americans for Responsible Leadership gave a whopping $11 million to a California group involved in the fights over a pair of Golden State ballot initiatives. The stakes were high — one proposition was Gov. Jerry Brown’s tax-hike initiative, the other would have prohibited labor unions’ from raising political money from payroll deductions. California Democrats and progressives were incensed that the millions of dollars coming from another state had been given anonymously. As a 501(c)4, or so-called “social welfare” group, Americans for Responsible Leadership could and did keep its donors secret under federal law.
“Eleven million dollars doesn’t just drop out of the sky,” Derek Cressman, vice president for state operations of the advocacy group Common Cause, told a California news outlet in October.
A few days after the donation was made, Common Cause’s California chapter filed a complaint with the state’s Fair Political Practices Commission (FPPC). Soon thereafter, the FPPC sued Americans for Responsible Leadership, in an attempt to force the group to turn over records and answer questions. The FPPC wanted to determine if Americans for Responsible Leadership’s large, anonymous donation violated not federal disclosure laws, but state ones. If a violation had in fact occurred, it became clear, Americans for Responsible Leadership’s secret donors could potentially end up unmasked.
The case bounced up the courts, and the FPPC ultimately prevailed. Early on Nov. 5, the day before Election Day, word spread that the agency was ready to do the unmasking. A few hours later, the agency put out a press release doing just that. But it proved a confounding revelation. The source of the money, the FPPC announced, was not Americans for Responsible Leadership but — wait for it — Americans for Job Security. Behind one anonymously financed and neutrally-named group was simply another anonymously financed and neutrally-named group. Like some kind of dark money Russian doll.
What had been billed as a victory for transparency turned out to be only a peek at how complex and inscrutable outside spending efforts have become. (The FPPC also revealed that the $11 million had been funneled through a third party, The Center to Protect Patient Rights, an Arizona group that has been tied to the movement of millions of dollars between political non-profits.) Whatever internal logic had prompted one secretive group to hide behind another secretive group (with the help of a third secretive group), it was impossible to understand from the outside.
And yet, knowing that Americans for Job Security was involved is not nothing. When only Americans for Responsible Leadership was involved, the story was a mystery: why and how did an out-of-nowhere group run by an unlikely collection of minor Republican players decide to spend $11 million in California? Americans for Job Security’s appearance made the story something else. For 15 years — starting well before the Supreme Court’s Citizens United decision, back when American Crossroads and Crossroads GPS were only twinkles in the eye of a pre-White House Karl Rove — Americans for Job Security has been out ahead of trends in political outside spending. Over the last decade and a half, the group has navigated a changing campaign finance environment, dropped tens of millions of dollars in 46 states and the District of Columbia, mostly backing Republicans, often taking flak for “unfair” ads, sometimes inspiring formal complaints, and a few times getting its wrists slapped by authorities. All the while, they’ve kept the names of their funders, for the most part, a secret.
You could say Americans for Job Security has been keeping donors anonymous since before it was cool.
The headline appeared in Roll Call on Jan. 15, 1998: “Pro-GOP Group Plans $100 Million ‘Issue Ad’ Blitz.” It was the first piece of press for an upstart outfit, formed just a few months earlier, in the fall of 1997. Citing the group’s planning documents, the article described how Americans for Job Security hoped to spend at least $100 million over five years on “issue ads,” and saw itself as a counter to the AFL-CIO, which had spent $35 million backing Democrats in the 1996 election cycle. “Like most independent groups,” the article said, “AJS is vowing to keep its donor list secret.”
While the kind of dark money group most en vogue in the super PAC era of campaign finance is the 501(c)4, Americans for Job Security was organized as and still is a 501(c)6 “business league,” like the U.S. Chamber of Commerce. As such, Americans for Job Security has members not donors, and non-tax-deductible membership dues instead of donations. On its current website, Americans for Job Security says it’s members are businesses, business leaders, and entrepreneurs from “around the country,” and states that it keeps its members secret because, often, “politicians or the media define an organization or message not by the merits of the argument, but rather by the perception of the people associated with it.”
The first Roll Call article in 1998, and other articles that chronicled Americans for Job Security’s early days, do however identify several early donors to the group. There was Robert Vagley, president of the insurance trade organization American Insurance Association (AIA). Vagley helped launch Americans for Job Security, according to Roll Call, and the AIA quickly pledged $1 million to the group. Another reported $1 million came from a second trade group, the American Forest and Paper Association. By May 1998, Americans for Job Security was boasting of $9 million in commitments from a dozen organizations.
At the helm was David Carney, who has been described as both a proto-Karl Rove and Bob Dole’s “kitchen magician,” and who, in 1998, as Americans for Job Security was taking off, had time to go down to Texas to help the state’s agriculture commissioner, Rick Perry, mount a run for lieutenant governor. Another co-founder of Americans for Job Security was Michael Dubke, identified in early reports as both a vice president of the group, and a spokesperson. Helping out initially with “strategic advice” were Eddie Mahe, a former deputy chairman of the Republican National Committee, and Leigh Ann Pusey, then AIA’s chief lobbyist and a former advisor to Newt Gingrich.
The group quickly got to work. In March 1998, The Hill reported that Americans for Job Security had already spent $50,000 for an ad backing Republican Tom Bordonaro, who was facing Democrat Lois Capps in a special House election. According to The Hill, the new group had already identified six more House races where it planned to run ads. In October, the group got attention for spending over $1 million in TV ads targeting Rep. Frank Pallone Jr. (D-NJ). The Washington Post reported:
The spot shows a group of sleazy-looking men dealing cards around a poker table, as one, wearing heavy gold rings, rakes the chips in front of him. “Call Congressman Frank Pallone and tell him to keep his hands off Social Security and stop gambling with our future,” concludes the ad, part of the group’s $7 million issue advocacy effort in about 20 markets around the country.
Pallone denounced the ad as “totally false,” but Carney stood by it, telling the Post the ad was “not against [Pallone]. He shouldn’t be so sensitive.”
At first, not all Republicans were on board with Americans for Job Security’s approach. In May 1998, Ed Gillespie, who would go on to co-found the super PAC American Crossroads with Karl Rove, told CQ that he worried that “their goal is not always to win on Election Day so much as it is to influence public opinion… And that in many cases can result in a loss for the candidate that is best for their issues.”
By 2000, Americans for Job Security was involved in Republican politics at the very highest level. A story in The Washington Post on May 16, 2000 described how Senate Majority Leader Trent Lott (R-MS) had called lobbyists for major technology companies to a meeting at Senate Republican campaign headquarters in April, and pressured them to donate to the outside group, so it could run ads in support of then-Sen. Spencer Abraham (R-MI), who was a sponsor of legislation important to the tech firms.
A few weeks later, Newsweek reported that Microsoft and “other high-tech companies” had contributed to Americans for Job Security. By that point, Dubke was proudly announcing his group’s willingness to go negative with its ads.
“We’re not having the Lincoln-Douglas debates anymore,” he told Newsweek. “We don’t beat around the bush and we name names.”
In the most recent tax documents available, which covers a period through Oct. 31, 2010, Americans for Job Security told the IRS it had “over 100 members which pay membership fees that are deposited into the general fund and will support the broad mission and efforts of the organization…The allocation of dues to the various activities of the organization will be determined by the professional staff and board of directors.”
Over the years, Americans for Job Security’s activities have prompted complaints from watchdog groups like Citizens for Responsibility and Ethics in Washington and Public Citizen, but little has come of them. In 2008, as the Los Angeles Times noted this November, the FEC’s general counsel concluded “the trade group met the definition of a political committee that is required to report its donors, and requested approval to pursue a formal investigation. But the commission deadlocked, and no action was taken.”
Eric Lach is a reporter for TPM. From 2010 to 2011, he was a news writer in charge of the website’s front page. He has previously written for The Daily, NewYorker.com, GlobalPost and other publications. He can be reached at ericl(at)talkingpointsmemo.com