How To Get Rich From Fringe Politics
The news is that the “head” of the Tea Party Patriots took home a cool $450K from the allegedly oppressed and targeted cluster of 501s legally constituted as the fictitious entity(ies) Tea Party Patriots, while the tea party groups aren’t using their cash to support candidates …
By Matea Gold
When the Tea Party Patriots threw its support last month behind Matt Bevin, the underdog conservative challenger trying to unseat top Senate Republican Mitch McConnell, President Jenny Beth Martin vowed the group would be “putting our money where our mouth is.”
So far, its super PAC has mustered just $56,000 worth of mailers in Kentucky on Bevin’s behalf — less than half the amount it has paid Martin in consulting fees since July…
Well, to paraphrase Otter from Animal House: Did they take liberties with liberty? Sure. Accomplishing nothing this year? Maybe. But let me tell you the story of another patriot– the subject, in a sense, of last weeks Supreme Court Ruling on the so-called “Michigan Civil Rights Initiative.”
The WSJ stipple illustration —
Pre-Rupert Murdoch takeover
After muscling the ballot measure onto the Michigan Ballot in 2006, fronted by Ward Connerly and Chetly Zarko (yes, that’s his ‘real’ name), Proposal 2 passed as the “Michigan Civil Rights Initiative” or MCRI.
It was a near copycat of the California Proposition 209 (a/k/a also known as the “California Civil Rights Initiative, or CCRI”, passed in 1996 and the virtually identical Washington State Initiative passed in 1998.
But let’s back up a bit. It’s hard to get a handle on something this complex and sprawling, so let’s start with a young Michigan woman named “Jennifer Gratz” whose attorney wrote an astonishing letter on her behalf to the non-profit boards controlled by Ward Connerly, as obtained by the New York Times:
September 22, 2011
To the Board Members of the American Civil Rights Institute, the American Civil Rights Coalition and the American Civil Rights Foundation:
I represent Jennifer Gratz, who earlier today resigned as Director of Research for the American Civil Rights Institute (ACRI), and as Director of State and Local Initiatives for the American Civil Rights Coalition (ACRC), and from any other position she might hold with ACRI or any affiliated organization. Ms. Gratz has been a loyal employee of ACRI and ACRC for years, but having viewed firsthand the operation of these organizations under the leadership and control of Ward Connerly, she has concluded that she must resign…
The letter continues:
Pay no attention to this graphic. It has no meaning in the context of the tale
Ms. Gratz remains committed to the cause of equal treatment under the law, and the principle that an individual should be judged as an individual, not as a member of a group. Unfortunately, she has realized that ACRI and ACRC have not been adequate stewards of the resources the donors entrusted to the organizations to educate the public on racial and gender based preference and advocate for its elimination. Because these organizations do not appear to have internal procedures in place for reporting possible compliance or ethics issues, I am writing to inform the Boards of several issues that Ms. Gratz is aware of, which are worthy of investigation and oversight of the Boards…
OK, so now you’re asking Who Is Jennifer Gratz, and Why Should I Care?
(And Oregonians might recognize a version of Beth Miller’s testimony against Bill Sizemore and his Ballot Machine in the Oregon trial and conviction and etcetera …)
Good question. You’re incredibly smart, handsome and insightful.
Gratz is the woman who sued the state of Michigan over its college admissions programs — a new twist on the old Bakke reverse-discrimination model — and opened the door for Ward Connerly and The Initiative Machine™. She was approached and hired by Ward Connerly. Where she continued to work for years thereafter. But what was the break in this noble non profit alliance to deny anyone that awful “Affirmative Action” stuff? Why, MONEY, of course.
Ms. Gratz has strong reason to believe that there are significant issues that the Boards should investigate regarding the management of its organizations. As evidenced by payroll irregularities, the organizations have been in financial crisis since March 2010. As the Boards must be aware, Mr. Connerly is compensated generously recently filed tax documents indicate an annual compensation of well over $1 million a year (for an organization that raises about $2 million annually).
This, of course had been the pattern with the ACRI/C/F from 2001, at least, as an examination of their publicly available tax returns shows. The very first that catches one’s eye is how MUCH of the “charitable” organization’s cash goes directly in Ward Connerly’s pocket. The wages of sin, t’would seem, are pretty good.
Independent of the sheer amount of this compensation (which raises its own issues for the Boards to consider), it appears that Mr. Connerly’s stewardship of ACRI has, at a minimum, raised questions about whether the organization’s mission has been subordinated to Mr. Connerly’s personal interests. Whether or not this is proven to be the case, the organizations are in crisis and Board involvement is essential at this time.
Turns out things were a bit of a mess:
First, Ms. Gratz is concerned that since approximately June 201 1, the organizations have ceased almost entirely doing work related to their charitable mission. Nearly all the organizations’ resources and energy have been devoted to supporting administrative costs and responding to separate investigations being conducted by the IRS and the California Office of the Attorney General into Mr. Connerly’s salary, as well as other financial and ethical irregularities at the organizations….
Should we add nepotism?
First and foremost, several ACRI employees and contractors have had personal or non-professional relationships with Mr. Connerly that may not have been disclosed to the Board and that hamper the ability of the organization to perform its charitable mission. It can be shown that of the eight current salaried employees at least five of these employees are family members, have been longtime family friends, or have had non-professional and/or personal relationships with Mr. Connerly. As but one recent ex-ample: despite the absence of projects or work furthering the organization’s mission over the last six months, no members of the staff have been laid off. Ms. Gratz fears that this is because of Mr. Connerly’s personal interests rather than the legitimate needs of the organization….
And strange stuff with the payroll?
Ms. Gratz is concerned that Mr. Connerly’s salary is taking precedence over payment of salary to staff members, several of whom are single mothers and in need of regular income. On September 6, 2011 the staff was informed via email that the organization may not meet its September 9 payroll for the pay period of August 22 to September 2, 2011. In fact, no salary has been paid to the staff since August 26, 2011 (on August 26, payroll was met for the pay period ending on August 19). At a time when reassurance from ACRI’s leader is more than necessary, Mr. Connerly has been absent from the office, but for the rare fifteen minute drop-in, and has avoided talking to the staff.
Prior to March 12, 2010, employee salary was consistently paid through direct deposit. From that date through the present, salary has been paid seemingly at random through either physical check or direct deposit. On at least four separate occasions during that period, salary payments have been delayed or missed. On one additional occasion the staff was notified that payroll may be delayed; however, it was distributed through a physical check on time. Ms. Gratz believes that earlier in the year Mr. Connerly arranged to pay himself weekly and without the same week delay as staff to put him ahead of the staff’s bi-weekly schedule.
And, finally, failures to file tax returns for several years …
Ms. Gratz is concerned about the fact that neither ACRI nor ACRC filed federal income tax returns for several years, which resulted in ACRC recently losing its tax exempt status. The returns were not filed, Ms. Gratz speculates, to keep at least partially from public scrutiny the extent of Mr. Connerly’s salary amidst the organizations dire financial circumstances. For example, a recent filing disclosed that Mr. Connerly’s compensation from ACRI in 2009 amounted to over 58% of the organization’s total revenue that year. While Mr. Connerly’s actual salary is of little concern to Ms. Gratz, it is disconcerting to her that his compensation prevents the organization from funding programs in furtherance of its goals and that the organization may have jeopardized its tax exempt status and its relationship with donors solely to disguise the extent of Mr. Connerly’s salary.
Fourth, Ms. Gratz is concerned that there are inadequate financial controls in place to provide oversight for the salary advances Mr. Connerly receives, or for payments made to him for consulting fees, speaking engagements, travel advances, and other cash transactions. For years, Ms. Gratz was aware of the allegations that Mr. Connerly received excessive compensation. She presumed that the issue was politically motivated and raised solely by opponents of the organization’s mission….
Ah, but some charges actually turned out to be true, even to a True Believer:
It has come to her attention, however, that there may be some merit to the allegations of financial impropriety. Additionally, Mr. Connerly appears to have engaged in other transactions (payment for “unused” vacation, etc.) that may have benefitted him beyond a level that the Boards may be aware of.
And, finally, something that auditors are used to seeing when a company collapses financially …
Fifth, there have also been significant irregularities with respect to payment of employment-related taxes, including knowingly issuing W-2s that did not accurately reflect the amount actually paid to employees …
All of which is not to endorse or deny the charges. Undoubtedly one set of lawyers met with another set of lawyers, and money exchanged hands in return for “non disclosure” and that’s the last we’ll ever hear of it. The IRS probably put someone on an installment plan and the “charitiable” work even can continue.
It doesn’t matter what raw politics you’re engaged in on the public’s dime, but fail to file a tax return and THAT will get you kicked off.
from the Guidestar report
No: What matters here are two aspects of this whole dark money via the 501s route.
First, that when you “give” dark money to organizations to advance your causes, you can’t really do much in the way of auditing, lest you provide a trail of evidence leading from your hidden contributions back to your very own 24 karat bunny hutch.
Just ask those gazillionaires who in 2012 gave Karl Rove half a billion bucks to spend (and got nothing in return). Wonder how many pockets filled with easy money?
Which leads to the second point: do these shadowy, rich self-anointed “legislators” really believe that the mouse aren’t eating the cheese factory to the wallboards in the absence of cats?
How much of that dark political money gushing through is going to the “cause” and how much is just sticking to various fingers?
Ward Connerly is kind of a poster boy for this sort of stuff.
The agency tasked with keeping track of this, the IRS, has woefully few cops on the beat — per the intention of the kleptocratic kaukus in kongress, make no mistake.
And when the cats are away….
A $1 million salary for a “charitable” organization that only pulls in $2 million?
Or a “Tea Party Patriots” whose presiding officer pulls in …
Martin, the super PAC’s chairwoman, oversees all its expenditures, according to Broughton, meaning she sets her own $15,000 monthly fee for strategic consulting — payments that have totaled $120,000 since July.
She also draws a salary as president of the Tea Party Patriots’ nonprofit arm — gettingmore than $272,000 in the 2012 fiscal year, according to the group’s most recent tax filing.
Her twin salaries put her on track to make more than $450,000 this year, a dramatic change in lifestyle for the tea party activist, who had filed for bankruptcy in 2008 and then cleaned homes for a period of time to bring in extra money.
And another top Tea Party Patriots official, national finance director Richard Norman, is paid $15,000 a month to oversee fundraising for the nonprofit and super PAC. At the same time, the group’s two affiliates have paid three direct mail firms run by Norman at least $2.7 million since June 2012 to help solicit funds for the groups, according to public records….
Well, you get the idea.
More on Ward Connerly, who is becoming a Rabbit Hole I just fell down, anon.
A writer, published author, novelist, literary critic and political observer for a quarter of a quarter-century more than a quarter-century, Hart Williams has lived in the American West for his entire life. Having grown up in Wyoming, Kansas and New Mexico, a survivor of Texas and a veteran of Hollywood, Mr. Williams currently lives in Oregon, along with an astonishing amount of pollen. He has a lively blog His Vorpal Sword. This is cross-posted from his blog.