America First Policies is garnering new attention after the nonprofit, with the White House’s backing, took aim at Republican Sen. Dean Heller in an unprecedented way for not backing the Senate healthcare bill.
The nonprofit backing President Donald Trump’s policy agenda (with the president’s blessing) launched a $ 1-million ad campaign against Heller in his home state.
The campaign tied him to House Minority Leader Nancy Pelosi and accused him of breaking a “promise” to voters by refusing to back the Better Care Reconciliation Act, the Senate Republican bill unveiled late last week that is now being revised after a number of GOP senators joined Heller in voicing opposition.
But the ads were quickly pulled after top Senate Republicans, including Senate Majority Leader Mitch McConnell, voiced opposition to the campaign against Heller, who is up for reelection in 2018 and is the only Republican senator up in a state that 2016 Democratic presidential nominee Hillary Clinton won in last year’s presidential election.
The whole episode led some to question the relationship between the White House and America First.
For starters, the outside nonprofit is staffed by many who have close connections to Trump’s campaign and the White House. Earlier this year, deputy White House chief of staff Katie Walsh left the administration to head up the outside group. And Nick Ayers, another leader at the nonprofit, is considered to be Vice President Mike Pence’s top political adviser. On Thursday, Pence announced Ayers will take over as his chief of staff in August.
The New York Times reported that the anti-Heller ads had the White House’s blessing, per an America First official, as Trump allies were angered by the Nevada Republican’s decision to side with his state’s Republican governor, Brian Sandoval, who accepted Obamacare’s Medicaid expansion.
Experts told Business Insider that such coordination was, in all likelihood, not a problem legally. But they said the episode provided a chance to shine light on a number of other concerns related to the tight connections between the Trump administration and America First.
“I think that this whole scenario speaks to the weaknesses in our current laws,” Brendan Fischer, a Federal Election Commission reform program director at the Campaign Legal Center, told Business Insider. “I think it is problematic that there is a dark money organization funded by secret donors that is working directly with the White House. And I think it’s reasonable to question whether donors to America First Policies are expecting something in return from the White House.”
If America First was a super PAC, as some outlets have incorrectly labeled it, it would be required to disclose its list of donors. But non-profit, 501(c)4 organizations, known as “social welfare organizations,” are not legally required to produce such disclosures, making them an extremely attractive option to use for political purposes.
Robert Maguire, political nonprofit investigator at the Center for Responsive Politics, told Business Insider that these 501(c)4 organizations “can operate pretty much like a super PAC even though “they’re not supposed to have politics as their primary interest” because “there is essentially no oversight of these groups.”
“So they can raise and spend unlimited amounts of money from anonymous donors,” he said. “They do not file regular financial reports. And they do not report a lot of their ads and things like that to any entity like the FEC or anything like that.”
He added that in the aftermath of the Supreme Court’s “Citizens United” decision in 2010, which dealt with the regulation of campaign spending by organizations, liberal and conservative nonprofits have taken advantage of the rules surrounding 501(c)4 organizations to spend heavily for and against candidates by using “issue ads,” such as America First’s Heller ads, as “sort of political ads.”
The IRS, which provides oversight over such nonprofits, has revoked the status from next to no organizations among the hundreds which have spent hundreds of millions in similar ways.
“So, there’s a reason they form these groups the way they do, and it’s because of that,” Maguire said. “They basically get all the perks of non-disclosure and a slow filing schedule and all of these things. And it lacks oversight.”
And although a case of illegal coordination between America First and the White House would be extremely tough to pursue, since the ad was not advocating for Trump’s election or for the defeat of a candidate and the organization was not a super PAC, Fischer said the episode makes clear “gaps in the law.”
Fischer added it’s “reasonable to infer” that donors to America First are “coordinating directly with the White House.
He also said the “most important” issue to highlight is that it is not public who is funding America First, which, based on its ability to put forth an approximately $ 1-million ad buy in a state, is pulling in a substantial amount of cash.
“We don’t know if” that money is “coming from special interests who wanted something in policy from the administration, we don’t know is it’s coming from a foreign government, or if it’s coming from a foreign corporation,” Fischer said. “And that speaks to the big gap in current law.”
Maguire said one regulation that America First “is probably violating” with its brief anti-Heller ad campaign is what’s known as “excessive private benefit.”
As Maguire explained, “A nonprofit is supposed to be a social welfare organization. It is supposed to exist to provide a social welfare function to a generalized part of the population. It is not supposed to provide excessive benefit to a small select group or to a single individual.”
He continued: “And so when you have a group like America First Policies that is run by people who worked on Trump’s campaign, who are allies of the Trump administration and do sort of the policy bidding of the Trump administration, you probably have a pretty clear case of excessive private benefit. More than coordination, more than political spending or anything like that. And I think that’s something a lot of people miss.”
Maguire said that, if the IRS were to look into the matter, the organization could likely find “a pretty good case” that America First was “providing too much private benefit to the administration in general but Donald Trump in particular.” As a result, it could lose its tax-exempt status.
Kevin Lamarque/ReutersAmerica First was formed as the Trump presidency’s version of “Organizing for Action,” which was the 501(c)4 organization that sought to advance President Barack Obama’s policy initiatives.
Fischer said the two organizations were “somewhat analogous,” but added that OFA, which was originally Organizing for America, was housed within the Democratic National Committee during Obama’s first term, which meant that all the contributors had to be publicly disclosed. The organization was spun off into a 501(c)4 during Obama’s second term, when it reluctantly later disclosed its donors voluntarily after facing initial criticism.
But Fischer described the group as “never” being “particularly effective.”
“To my knowledge, they didn’t spend a lot of money,” he said. “They didn’t engage in ads. They were never really a major player.”
“But I think in some ways, Obama opened the door to this sort of activity and the Trump administration is exploiting it to much more sinister effect,” he continued, adding that America First is “apparently raising much more money and getting much more aggressive.”
Maguire, like Fischer, also made note of OFA’s lack of high-dollar ad campaigns similar to America First’s move to blast Heller.
“So they weren’t going in to elections and sort of hitting … anyone with big ad buys, big critical ad buys,” he said. “America First Policies is kind of a sledgehammer compared to what was maybe a scalpel for Organizing for America.”