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One Six-Figure Donor Funds Whitaker Nonprofit With Dark Money

The release of Matthew Whitaker’s financial disclosures has fueled calls to contest his appointment.

Acting Attorney General Matthew Whitaker delivers remarks to the Joint Terrorism Task Force on November 21, 2018, in New York City.

A single six-figure donor accounted for 100 percent of funding raised by a nonprofit run by acting Attorney General Matthew Whitaker before he became Jeff Sessions’ chief of staff last year, new tax documents obtained by the Center for Responsive Politics reveal.

President Trump tapped Whitaker to become acting Attorney General earlier in November after Jeff Sessions was asked to resign.

The Foundation for Accountability and Civic Trust (FACT) is a self-proclaimed 501(c)(3) “watchdog” nonprofit.

This is not the first year a single big donor has accounted for the entirety of FACT’s funding, according to an exclusive new analysis by CRP. Nearly 100 percent of FACT’s funding — all but a few dollars in interest accrued on money left-over from prior years — came from a single anonymous donor again in 2015, 2016 and again last year.

CRP discovered FACT’s first tax return back in 2016, revealing its funding — $600,000 for 2014, its first year of operation — came entirely from a donor-advised fund called DonorsTrust, which acts as a pass-through vessel managing the money flow from wealthy individuals and foundations to nonprofit organizations while allowing the donors to remain anonymous. Beneficiaries of DonorsTrust include a breadth of conservative and libertarian initiatives. Due to DonorsTrust’s design, although CRP is able to reveal the direct funder of FACT by piecing together grants from different tax returns, the ultimate donor remains hidden.

New tax returns obtained by CRP show that wasn’t the only time DonorsTrust was FACT’s main funder. In fact, DonorsTrust accounted for 100 percent of FACT’s income from donations again in 2015, in 2016 and its most recent tax return — meaning Whitaker’s organization that claimed to be “dedicated to promoting accountability, ethics, and transparency” has gotten all of its funds from a group that exists mainly as a vehicle for donors to elude transparency every year since its inception.

Deep Ties to Dark Money Networks

In their application for tax-exempt status, FACT — then called the Free Market America Educational Foundation — told the Internal Revenue Service (IRS) that its purpose was to “conduct research and provide informational studies on free market concepts in relation to environmental regulations and policy.” The IRS approved the group’s application for tax-exempt charity status on July 21, 2014, according to its determination letter.

Tax-exempt status in hand, the nonprofit changed its address to a UPS store and its name just weeks later, according to Virginia incorporation records. The nonprofit changed its name again that October, first to the Working for Rights to Express & Communication before finally landing on its current name — ultimately changing its name three times in the months following IRS approval for tax-exempt status, twice in just one day. That month, Whitaker, took control of the organization after losing his bid for a U.S. Senate seat in Iowa.

As the Free Market America Educational Foundation, the group was started by Ray Wotring, an operative who had long ago been tied to another shadowy network of politically active nonprofits. Wotring also served on another conservative nonprofit, Americans for Limited Government, which has close financial ties to the network and shared the same UPS story mailing address as FACT’s first iteration as the Free Market America Educational Foundation as well as Free Market America’s 501(c)(4) nonprofit arm.

Free Market America’s nonprofit arm has remained active and began to spend on lobbying in 2018, reporting six-figure spending.

FACT’s dark money ties don’t end there.

The treasurer and a member of the board of directors at FACT is Neil Corkery. Corkery, along with his wife Ann, sit at the helm of a network of conservative “dark money” groups organized to influence public policy and has become a key player promoting Trump’s agenda.

The network has become well-known for the Judicial Crisis Network (JCN), a nondisclosing group that emerged as the predominant dark money spender in Supreme Court confirmation fights since its launch in 2005, allowing deep-pocketed donors to funnel millions of dollars opposing or supporting judicial nominees, including a pledge to spent $10 million on the confirmation of Supreme Court Justice Brett Kavanaugh. JCN’s primary benefactor over the years has been the Wellspring Committee, an even more opaque nonprofit run by the Corkerys that accounted for over 80 percent of its total revenue in 2016.

Many of the groups tied to the network list the same address as their office, with different “suite” numbers. In reality, the address is also a UPS store and the suite numbers are PO boxes.

Links to Trump’s Mysterious Inaugural Donor

In addition to its ostensible political spending fueled by secret donors, disclosures by groups in the Corkery’s network have also raised question about other vehicles of influence behind the scenes, most notably in ties to a $1 million gift to President Donald Trump’s inaugural committee from a mysterious Northern Virginia company called BH Group, LLC.

Little is known about the LLC other than the seven-figure check on Dec. 22, 2016, almost a month before President Trump was sworn in, and a trail of clues pieced together from tax documents and other disclosures.

These clues have also led to Leonard Leo, the executive vice president at the Federalist Society, who listed “BH Group” as his employer in a filing with the Federal Election Commission.

Tax documents previously obtained by CRP show that the Wellspring Committee made a $750,000 payment to BH Group for “public relations” and that JCN made an additional cash infusion of $947,000to the BH Group around when the LLC made its inaugural donation.

New tax documents first obtained by Maplight and reviewed by CRP reveal that Judicial Education Project, JCN’s sister 501(c)(3) nonprofit organization, paid an additional $1.3 million to BH Group LLC last year.

As a 501(c)(3) organization, Judicial Education Fund is not required to reveal its donors and chooses to keep them secret. However, CRP has been able to trace the source of the bulk of the group’s 2017 funding. Like FACT, Judicial Education Fund received millions of dollars coming from DonorsTrust accounting for more than 99 percent of the group’s funding.

That newly revealed payment from Judicial Education Fund brings the total known income for the BH Group to more than $3 million, according to CRP’s analysis — over three times the $1 million it gave to President Trump’s inaugural committee and raising more questions about its other activities that have yet to be reported.

Whitaker’s Watchdog

FACT’s own activities since 2014 have largely revolved around legal and ethics complaints, mostly targeting Democrats and with a particularly aggressive focus on Hillary Clinton during the 2016 presidential election.

FACT has paid more than half-a-million dollars to Republican opposition research firm America Rising LLC, according to its most recent three tax returns.

FACT raised just over $3.4 million since it was conceived in 2014, according to tax filings obtained by CRP. Whitaker’s salary accounts for more than a third of FACT’s entire revenue since its exception, making him its single largest expense.

Whitaker received more than $1.2 million from FACT over the three years he led the organization, according to CRP’s analysis of the group’s tax returns, with the salary he drew from FACT rising precipitously — in some cases increasing by more than six-figures with each passing year.

Whitaker made $502,000 in 2017 — around half of FACT’s spending — despite having left the organization to take a position at the Justice Department as then-Attorney General Jeff Sessions’ chief of staff in September of that year.

FACT provided the vast majority of Whitaker’s income for the entire span of time covered by his financial disclosures on file with the Office of Government Ethics and released by the Justice Department the Tuesday before Thanksgiving, following weeks of scrutiny and multiple requests.

Whitaker’s selection as acting Attorney General has been contested on multiple fronts, and the release of his financial disclosures has only fueled the dumpster fire.

Disclosures revealed that Whitaker’s unsuccessful 2014 campaign received four donations totaling $8,800 this year — years after he lost the election and just months after he joined the Justice Department. The donations were the only money the campaign has received in over two years, raising questions about the potential implications of the donations under the Hatch Act, a federal law that generally prohibits federal officials from knowingly soliciting or accepting campaign donations and a separate Justice Department memo further restricting political activity by its personnel in the hopes of keeping the agency as apolitical as possible.

A provision of the Hatch Act allows officials to raise money to retire campaign debt, but the campaign’s only reported spending was 2018 were $228 to reimburse “data services” and $500 to Whitaker’s old law firm for renting office space, according to the New York Times.

Whitaker’s law partner of eight years, William Gustoff, who was treasurer for Whitaker’s unsuccessful 2014 Senate campaign and also serves on the board of FACT, signed off on the FEC filings.

“The checks came in. I, as the treasurer, deposited the checks, and I retired the debt that I knew I could without talking to Matt,” Gustoff told the New York Times, “I don’t talk to Matt about the campaign.”

Gustoff did say that FACT had been “well received” by Republican donors.

2017 Form 990 tax returns for DonorsTrust and Judicial Education Project were first obtained by Maplight’s Andrew Perez and reviewed by the Center for Responsive Politics.

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