Three Koch-Linked Groups Fined For Breaking Disclosure Laws

In a rare move, the FEC takes action.
Groups connected to the billionaire Charles Koch (pictured) agreed to pay fines for failing to disclose donors in the 20
Groups connected to the billionaire Charles Koch (pictured) agreed to pay fines for failing to disclose donors in the 2010 election.

WASHINGTON ― Three nonprofit groups connected to the billionaire Koch brothers were fined by the Federal Election Commission for failing to disclose their donors in the 2010 elections.

American Future Fund, Americans for Job Security and 60 Plus Association all agreed to conciliation agreements with the FEC for accepting funds from the Center to Protect Patient Rights to spend on races specified by Sean Noble, the consultant in charge of CPPR. The three groups agreed to pay a combined total of $233,000 in fines. They were also forced to disclose that they were funded by CPPR, although this was already disclosed in tax filings made to the IRS.

The fines are the result of a complaint filed in 2014 by the watchdog group Citizens for Responsibility and Ethics in Washington.

“These rules provide some of the only windows into the funding of dark money groups, but the FEC almost never penalizes groups that break them,” CREW executive director Noah Bookbinder said in a statement. “It is hard to overstate how significant this is.”

CPPR, now known as American Encore, was a central hub in the dark money network operated by billionaires Charles and David Koch that distributed hundreds of millions of dollars through a web of conservative nonprofit groups from 2009 through 2012. The group and Noble were ultimately cut loose from the network after CPPR was implicated in a political money-laundering case in California. According to a report by ProPublica, Noble’s removal from the Koch network may also have come after he directed tens of millions of dollars through his own consulting firms.

Noble’s employment of his own consulting firm, Noble Associates, is the key point in the FEC’s ruling that the three nonprofits had failed to comply with federal disclosure laws. According to all three conciliation agreements, the three groups each received millions of dollars from CPPR and then spent that money on millions of dollars of advertisements targeting Democratic senators and congressmen for defeat in the 2010 elections.

The three groups spent CPPR’s money through media vendors who produced advertising and determined which candidates to target. In each case, Noble’s consulting firm was working as a subcontractor for these media vendors. This was not disclosed in any prior filing with the IRS or the FEC. According to the conciliation agreements, which are based in part on Noble’s own statements, he “identified the specific targets candidates for [the groups] to target and played a role in approving the content of [the groups’] advertisements, and learned how [the groups] would use the funds that CPPR provided [the groups] to further specific advertisements.”

Groups engaged in certain types of independent spending targeting federal candidates are required to disclose any donors who specifically earmark funds for a particular race. In this case, Noble’s involvement as the chief funder of the groups and those groups’ media vendor meant that he was earmarking the funds CPPR contributed to those groups.

Key in the FEC’s determination is Noble’s own admission in a National Review article that he helped craft the advertisements run by the three groups CPPR funded.

These groups had, for years, insisted that the money provided to them by CPPR was directed to their general fund and not specifically earmarked for particular races. CPPR specifically stated on its tax forms filed with the IRS ― under the penalty of perjury ― that its grants were made solely for education and social welfare purposes. The FEC ultimately determined that this was not the case.