Dark Money: $1.6B by 1 donor for Conservative Org
Newslooks- CNN
A new group led by a prominent conservative lawyer has received $1.6 billion from one donor – the largest single contribution to a politically focused nonprofit that’s ever been made public, and a fortune that could be used to fuel right-wing interests.
The nonprofit, Marble Freedom Trust, received the contribution in the form of stock and then funneled more than $200 million to other conservative organizations last year, a tax form CNN obtained from the IRS shows.
Marble Freedom is led by Leonard Leo, the co-chairman of the conservative Federalist Society, who advised former President Donald Trump on his Supreme Court picks and runs a sprawling network of other right-wing nonprofits that don’t disclose their donors, which are often referred to as dark money groups.
A CNN review of financial documents connected the donation to Barre Seid, a low-profile, 90-year-old Chicago electronics company executive and philanthropist who has previously been tied to smaller anonymous contributions to other right-wing groups. The New York Times, which first reported the contribution on Monday, also identified Seid as the donor.
The massive donation instantly makes the Utah-based group one of the most well-funded organizations bankrolling conservative causes in the US – a staggering distinction for a group with zero public profile or even a website. In comparison, the single contribution is more than double the total amount raised by Trump’s presidential campaign committee during the entire 2020 election cycle.
Robert Maguire, the research director of Citizens for Responsibility and Ethics in Washington, called the donation “stupefying,” and “by far” the largest known contribution to a dark money political group.
“I’ve never seen a group of this magnitude before,” Maguire said. “This is the kind of money that can help these political operatives and their allies start to move the needle on issues like reshaping the federal judiciary, making it more difficult to vote, a state-by-state campaign to remake election laws and lay the groundwork for undermining future elections.”
Leo said in a statement that “it’s high time for the conservative movement to be among the ranks of George Soros, Hansjörg Wyss, Arabella Advisors and other left-wing philanthropists, going toe-to-toe in the fight to defend our Constitution and its ideals” – referring to two liberal-leaning billionaires and a consulting firm that manages several smaller dark money groups on the left.
Seid did not respond to requests for comment left on phone numbers listed for him and his longtime assistant.
Huge anonymous donation has ties to Chicago executive
“Dark money” generally refers to nonprofits that get involved in politics but do not disclose their donors, a practice that significantly ramped up after the Supreme Court’s Citizens United decision in 2010. Many dark money groups, like Marble Freedom, are 501(c)4 organizations – nonprofits that are allowed to participate in politics as long as it is not their primary activity.
Groups on both sides of the political spectrum have increasingly turned to dark money in recent years to sway voters or push agendas without revealing their ultra-wealthy benefactors – but the Marble Freedom donation dramatically eclipses even the largest of the previously known groups.
Marble Freedom’s tax return covers its initial year of existence between May 2020 and April 2021. The gift of just over $1.6 billion came in the form of 100% of the stock of a privately held company, which Marble Freedom then sold to another company, according to the tax form.
The arrangement likely saved Seid a large amount of money in taxes, according to Marcus Owens, an attorney and former director of the IRS division on tax-exempt organizations, who reviewed the form for CNN. If Seid had personally sold the stock in the company, he would likely have had to pay capital gains tax on the proceeds of the sale. By donating the stock to Marble Freedom, he avoided having to pay that tax, and the nonprofit would be exempt from paying it.
Marble Freedom wrote that it was withholding information about which company was donated and who it sold to because “disclosing it would effectively disclose the identity of its donors.”
But details about the donation connect it to the sale of the Chicago-based electrical device firm Tripp Lite, whose longtime chairman was Seid.
After receiving the donated stock, Marble Freedom sold the company on March 17, 2021, according to the tax form. The same day, according to Securities and Exchange Commission documents, the American-Irish power company Eaton acquired Tripp Lite for $1.65 billion.
During the sale, “the sole shareholder of Tripp Lite” was represented by New York law firm Sullivan & Cromwell, Law360 reported at the time. Less than two weeks later, Marble Freedom paid Sullivan & Cromwell $940,000 in legal fees, the tax form shows. A spokesperson for Eaton said the company would not provide more details about the acquisition, and several lawyers involved in the transaction did not respond to requests for comment.
Seid served as chairman and CEO and listed himself as the “owner” of Tripp Lite in federal campaign donation records from 2008. He worked at the company, which produces power strips, surge protectors and other devices, for more than 50 years, according to a Facebook post from Tripp Lite. He grew up in Chicago, the son of immigrants from Russia, according to Census records, and graduated from the University of Chicago.
Seid has previously had a history of donating anonymously to conservative political groups and causes. An internal 2015 document from the Bradley Foundation, a right-wing nonprofit, stated that the conservative think tank Foundation for Government Accountability had received support from “Barre Seid (anonymously).” The document was part of a trove of records from Bradley that was hacked and released, and was later included as an exhibit in Senate testimony.
In addition, Salon reported in 2010 that “Barry Seid” was listed in tax documents as the identity of an anonymous donor who gave nearly $17 million to a group that produced an anti-Islam documentary and sent DVDs of the movie to millions of households during the 2008 election. An assistant for Seid told Salon that he did not contribute to the organization, although she didn’t address whether he made the donation by routing it through another group.
And publicly released emails suggest that Seid may also be the anonymous donor who pledged $20 million over five years to George Mason University’s law school in order to rename it for former Supreme Court justice Antonin Scalia in 2016. The emails were obtained through a public records request and published by George Mason Law alum Allison Pienta in 2019. The school has refused to identify the donor but has said that Leo coordinated the gift.
Seid and his wife make public donations through another nonprofit, the Barbara and Barre Seid Foundation, which mostly funds Chicago-based cultural organizations and universities but has given to conservative and libertarian groups such as the Cato Institute, the Competitive Enterprise Institute and the Heartland Institute. Seid also donated to various political campaigns in Illinois and elsewhere in the 1990s and 2000s.
Big spending and opaque groups
Even in its infancy, Marble Freedom Trust has already funneled hundreds of millions of dollars to other dark money groups.
Leo, Marble Freedom’s chairman and trustee, is one of the most influential figures in the world of conservative dark money. A longtime executive at the Federalist Society, a national network of right-leaning lawyers, Leo has led or served on the board of more than a dozen different nonprofits. Several of his groups have been associated with political campaigns promoting conservative Supreme Court nominees, operating in complex networks of spending.
The new $1.6 billion donation “solidifies Leo as just an absolute gravitational force within the conservative political and legal world,” Maguire said. “He was already the man behind the scenes raising money for reshaping the American judiciary, and this amount of money just takes it to a stratospheric level.”
On the Marble Freedom tax form, Leo is listed as being paid a $350,000 annual salary for 25 hours a week of work for the group.
The form states that the group’s mission is to “maintain and expand human freedom consistent with the values and ideals set forth in the Declaration of Independence and the Constitution of the United States.” While politics can’t be its primary focus, it can use at least some of its huge resources to influence this year’s midterms or future elections.
“This is such a significant amount that it would be a game-changer if they do decide to devote even a portion of that to election-related spending,” said Anna Massoglia, the Editorial and Investigations Manager at OpenSecrets, a group that researches campaign finance.
Marble Freedom reported making four donations to other nonprofits – transactions that appear to have taken place between the sale of the stock in mid-March 2021 and the end of April 2021.
The largest contribution was a $153 million gift to the Rule of Law Trust, a dark money nonprofit led by Leo that has funded other conservative organizations. The group’s tax returns show it received just under $80 million in donations in 2018 and no contributions in 2019 or 2020, so the gift from Marble Freedom represents a massive funding boost for the organization.
Marble Freedom contributed $41.1 million to Donors Trust, a nonprofit that distributes money to conservative and libertarian groups in addition to nonpolitical organizations. The group is a donor-advised fund, which means its contributors can recommend where their donations to the fund are sent.
In the past, Donors Trust has funneled millions of dollars to groups that have amplified false claims about election fraud and advocated for more restrictive voting rules. The group has previously said that its donations are intended to “serve the public good.”
Marble Freedom also donated $16.5 million to The Concord Fund, a nonprofit that has advocated for conservative nominees to the Supreme Court and other judgeships and is associated with a group that has pushed restrictive voting laws. Concord, which was previously known as the Judicial Crisis Network, raised $20.4 million from July 2019 to June 2020, according to its most recent tax return.
In addition to the three groups with political connections, Marble Freedom gave $18 million to Schwab Charitable Fund, another donor-advised fund.
Marble Freedom lists two other board members in addition to Leo, both of whom are unpaid. One is Tyler Green, the former solicitor general of Utah, who has represented the Republican National Committee and other GOP groups in multiple voting-related lawsuits in recent years. Green, who is listed as Marble Freedom’s administrative trustee, is also a former law clerk for Supreme Court Justice Clarence Thomas. The trust’s address is listed as a home in North Salt Lake, Utah, that Green owns.
The board’s third member is Jonathan Bunch, a former Federalist Society vice president who has been involved with various groups led by Leo. Bunch is listed as Marble Freedom’s successor trustee. Green and Bunch did not respond to requests for comment.
At the end of April 2021, Marble Freedom had more than $1.4 billion in assets – positioning it to play a major role in conservative causes potentially for years to come.
“This group is emblematic of the corrosion and the breakdown of our campaign finance system,” Maguire said – and how it gives “wealthy donors, whether they be corporations or individuals, access and influence over the system far greater than any regular American can ever imagine.”
