National ‘Scam PACs’ Have State Roots

U.S Flag and money. (Pexels liscense)

I usually screen my phone calls, but one call that got through some time ago began with a man telling a cornball, mother-in-law joke, then chuckling and saying he was raising money for the American Police Officers Alliance. There was something smarmy about his boldly casual style and I hung up pretty quickly.

But I’ve now learned, courtesy of a story by the New York Times, that these are very effective robo-calls, and part of a slick fund-raising operation by three men who were “all active in college conservative politics in Wisconsin about 15 years ago.” In fact, they did far more than that in Wisconsin, as Urban Milwaukee has learned, and had connections to politicians like Scott Walker and conservative activists like Eric O’Keefe. In doing this work they learned the ropes about about political nonprofits like Super PACs and 527 groups which operate under a section of the federal tax code.

The three men — John  W. Connors (aged 37), Kyle Maichle, 40, and Simon Lewis, 37 — have been running a group of five linked 527 groups that since 2014 have collected $89 million from small-dollar donors who were pitched on building political support for police officers, veterans and firefighters. One of those groups was the American Police Officers Alliance. But just 1% of the money raised by these groups “was used to help candidates via donations, ads or targeted get-out-the-vote messages, according to an analysis by The Times of the groups’ public filings.” The three men have created a lucrative, money making scheme that resembles operations that have been called “scam PACs.”

Connors “grew up in Northern Wisconsin’s logging country in a family-owned timber mill business that his grandparents founded in 1960,” he has written. He graduated from Marquette University, where he was a political activist on the campus “involved in organizations like the College Republicans, Americans for Prosperity, and working for then-County Executive Scott Walker,” his personal biography noted. He was also an intern in Walker’s Milwaukee County Executive office and contributed to “the digital marketing launch” of Walker’s successful 2010 campaign for governor, his biography back then said.

After college Connors worked for two conservatives groups started by O’Keefe, who was a major supporter of Walker. O’Keefe founded the Sam Adams Alliance and Franklin Center, which helped fund the now defunct conservative publication, the Wisconsin Reporter, which did countless stories attacking the John Doe probe of Walker and O’Keefe’s Wisconsin Club for Growth. Connor also worked for the Wisconsin branch of the Koch-funded group Americans for Prosperity.

Connors also served as president of super PAC called the Citizens for Strong America, which was founded by GOP campaign consultant RJ Johnson. In 2011 O’Keefe and the Club for Growth passed $4.6 million to a Citizens for a Strong America, which bought ads to aid conservative state Supreme Court Justice David Prosser’s reelection and to try to thwart the recall of Walker.

The group ran ads attacking Prosser’s liberal opponent, JoAnne Kloppenburg, claiming she “put an 80-year-old farmer in jail for refusing to plant native vegetation on his farm.” Politifact concluded the claim was “ridiculously false,” giving it a “pants on fire” rating.

The ever-busy Connors also registered the domain name for United Sportsmen, a conservative group that caused controversy when Republican lawmakers tried to help it receive state funds designated for hunting and fishing instruction, despite it having no background in outdoor recreation, as the Cap Times reported.

Kyle Maichle was a 2008 graduate of UW-Madison and a former College Programs Coordinator for Americans for Prosperity-Wisconsin and staunch defender of the group. After college he started his professional career with the Lucy Burns Institute in 2008 working as a Content Editor for Judgepedia and Ballotpedia, two publications run by O’Keefe’s wife Leslie Graves. Maichle also worked for O’Keefe’s Sam Adams Alliance.

Meanwhile, Connors had founded Campaign Now and built it into a firm that handled robocalls and voter outreach. He hired Maichle and Simon Lewis, “but made clear who was in charge,” the Times reports: the firm’s website gave his title as “Boss Man.”

The conservative groups Connors and Maichle were involved in tended to have cross connections and little transparency and money was often obscured by passing it from one group to another. This same approach is used in their current operation, set up soon after their involvement with the conservative groups.

As for the idea of doing fundraising calls for police officers and veterans, they may have gotten that idea from another operation with Wisconsin ties. Around the time the three men were building Campaign Now, a Milwaukee businessman named David Winograd won infamy for running a call-center firm called Xentel, which was “faulted for the large percentage of the take it keeps from fundraising calls for Police, Veterans, etc. — as much as 80 or 90 cents on the dollar,” as Michael Horne reported for Urban Milwaukee. It faced legal action in 10 states. Winograd went on to become a prominent real estate investor in Milwaukee.

Connors and the other two men have raised the $89 million through five non-profits they helped found: the American Police Officers Alliance, the National Police Support Fund, the Veterans Action Network, the American Veterans Honor Fund and the Firefighters and EMS Fund. They are 527 groups, and under a section of the tax code, “can raise unlimited donations to help or oppose candidates, promote issues or encourage voting,” the Times reported. But in reality the five linked nonprofits “have exploited thousands of donors in ways that have been hidden until now by a blizzard of filings, lax oversight and a blind spot in the campaign finance system.”

The five political nonprofits paid $2.8 million to companies owned by or connected to Connors, Maichle and Lewis, the story reported. Where the rest of the $89 million went is unclear, other than that little of it went to help police, veterans and fire fighters.

By minimizing the funding given to political candidates or groups by the five nonprofits, Connors and company “avoided scrutiny from the Federal Election Commission and most state watchdogs, and put their groups under the jurisdiction of a distracted and underfunded regulator, the Internal Revenue Service.”

Matthew Sanderson, an attorney who has advised Republican campaigns, criticized the use of 527 nonprofits to create “an elaborate self-licking ice cream cone, or fund-raising cycle that feeds itself, that’s not an exempt purpose.” As he told the Times, “the fund-raising has to be for something.”

In recent years, the Justice Department has prosecuted some so-called scam PACs — political action committees that diverted most of their donors’ money to insiders and endless fund-raising. But lawyers for some of the five nonprofits defended their operation, with one attorney denying that these were scam PACs.

“I do this to help people without a voice organize, raise money and design a platform,” Mr. Connors said in a statement to the Times. “Yes I am paid for what I do (everybody is) but my real compensation is the satisfaction of Americans getting involved in the system.”

Beware: one of those five groups may some day call you to ask for a donation.