Arabella: The Left’s “Dark Money” Monster (Pt. 3)

We dive into the Arabella network, the Left’s greatest “dark money” machine. Arabella’s billions and “pop-up” advocacy campaigns have helped Democrats win for years. It’s time for the Right to beat them at their own game.

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Delegitimizing the Supreme Court

No group so perfectly illustrates the professional Left’s grip on the Democratic Party than Demand Justice. Beginning in early 2019, this toxic “dark money” group quickly became Sixteen Thirty Fund’s most notorious pop-up and the source of so much criticism that Arabella later spun it off into a separate 501(c)(4) in mid-2021.

This far-left outfit launched in July 2018 with a much-trumpeted $5 million budget to protest the “extremism” of Trump’s Supreme Court nominee—days before Brett Kavanaugh’s name was publicly announced—alongside another Sixteen Thirty Fund pop-up, Protect Our Care. We now know that more than half of Demand Justice’s budget came from George Soros, whose Open Society Policy Center gave Sixteen Thirty Fund $2.5 million in mid-2018 “to provide support for Demand Justice,” $50,000 “to support advocacy on executive nominations,” and another $87,000 later that year “to support advocacy on judicial nominations.”

But that money didn’t materialize from nothing. In April 2018, Demand Justice director Brian Fallon—the wild-eyed ex-spokesman for Attorney General Eric Holder, Sen. Chuck Schumer (D-NY), and Hillary Clinton’s 2016 presidential campaign—presented his scheme to seize control of America’s courts at the Democracy Alliance’s spring conference, when the biggest influencers and mega-funders gather to strategize on winning the next election. After that, the Left’s money spigot opened up for Fallon’s group.

Today, Demand Justice regularly cites Fix the Court as an “expert” source for “reforming” the court with term limits and a code of ethics. Ditto the New York Times and Sens. Dick Durbin (D-IL) and Sheldon Whitehouse (D-RI) in their years-long onslaught against the “hypocrisy” of the court’s conservative justices. The first thing Fix the Court did after it launched was run ads attacking the justices’ “disdain for openness and transparency.”

If that line of attack sounds familiar, it’s the seedbed for the Left’s newest offensive against Justices Clarence Thomas, Neil Gorsuch, and John Roberts. We know their playbook: Saturate the court with fake scandals, threaten to impeach the justices, then use the manufactured crisis to pass dictatorial laws granting congressional Democrats power to put the “fix” in.

Disclosures show that Demand Justice continued to receive Arabella network funding after spinning off—evidence that its “independence” is a sham.

And thanks to a major screw-up by Fix the Court director Gabe Roth—who accidentally released his group’s donor list in May 2023 to a conservative news outlet—we know that all of its funding in 2021 came from two sources: New Venture Fund and the Hewlett Foundation, a left-wing standby and regular donor to the Arabella network. It’s entirely possible that Hewlett also funded Fix the Court before it spun off. Should private foundations be paying for a partisan crusade against the Supreme Court?

More of the Pop-Up Playbook

The Arabella network has run similar—if more obscure—pop-up campaigns on virtually every hot issue in politics. The following are a small sampling of the worst and the damage they’ve caused our country.

The Dangerous Speech Project aims to “inoculate” Americans against right-wing “hate” and Republican “misinformation” by using the legal system to punish “influential liars.” It also spreads its own conspiracy theories, including the lie that Paul Pelosi’s attacker was a right-winger rather than a nutty illegal alien, pothead, and Pelosi family friend. The Ford, MacArthur, and George Soros’ Open Society Foundations have all tagged grants to the project since 2019.

All Above All has one goal: Overturn the Hyde Amendment, the 1976 legislation barring the federal government from paying for abortions (except in the most extreme circumstances). In practice, that means pushing the EACH WOMAN Act, a bill that would prevent states from restricting abortion access in private healthcare plans.

One of the network’s top donors, Warren Buffett, is probably the single biggest donor to pro-abortion causes in human history, dumping at least $4.7 billion into the industry since 2000, enough to pay for some 4 million 20-week abortions. “Have an IUD? Thank Warren Buffett,” opined the Washington Post in 2015. Amazingly, CNBC has celebrated Buffett as America’s “most charitable billionaire.”

In 2018, his pro-abortion philanthropy—the Susan Thompson Buffett Foundation, named for his late ex-wife—was the largest donor to Arabella’s Hopewell Fund, funds that almost certainly bankrolled Hopewell Fund’s pro-abortion pop-ups.

States Newsroom is another Hopewell Fund spin-off created to set up “independent” local news agencies across numerous states ranging from Virginia to Alaska. The network, of course, claims to be nonpartisan. Far from it—early job postings from 2019 show the network proudly proclaiming itself a “progressive political journalism startup” led by a left-wing activist in North Carolina, a state Democrats have poured millions into flipping.

As with Zinke (and Kavanaugh before him), Western Values Project erected a website—DavidBernardt.org—calling him “the ultimate DC swamp creature” and an “ex-lobbyist who is too conflicted to be Interior Secretary,” while detailing a laundry list of ethics charges in an attempt to derail his confirmation to the post. It even ran a 6-figure television ad demanding moderate Republican Senators Cory Gardner (CO) and Martha McSally (AZ) oppose Bernhardt’s confirmation. When that failed, Western Values Project spent the next two years trying to thwart the Interior Department with an online “David Bernhardt Scandal Tracker” until Trump left office in 2021. (Rep. Zinke later entered my exposé on the ugly story into the congressional record in January 2023, but the damage cannot be undone.)

Two Arabella pop-ups, the Center for Secure and Modern Election (CSME) and Institute for Responsive Government, are cogs in the “Zuck Bucks” 2.0 machine run by the Center for Tech and Civic Life (CTCL), which distributed $420 million from Mark Zuckerberg as COVID-19 “relief” grants to pump up Democratic turnout in the 2020 election. The updated scheme aims to embed “progressive” groups into election machinery by hooking county offices on private “scholarship,” funds that may be used for “services” like consulting on drop boxes and vote-by-mail expansion. CSME has pushed for automatic voter registration in New York, Connecticut, Maine, Maryland, and Oregon.

In fact, Arabella’s New Venture Fund may have helped disseminate “Zuck bucks” in 2020 by pumping $25 million from an unknown donor (possibly Zuckerberg) into CTCL, which gifted $1.1 million across 13 Louisiana parishes. As of writing, both New Venture Fund and CTCL are under investigation by the state attorney general, while voters are likely to pass a Zuck bucks ban in the state’s October 2023 election.

We’ve also exposed the Hub Project, a deliberate attempt by a private foundation to circumvent IRS prohibition on election work by running its work through the Arabella empire. That scheme is funded by Swiss billionaire Hansjörg Wyss and his Wyss Foundation, a left-wing mega-donor with a ghoulish background whom some have labeled “the new George Soros.”

According to a secret memo written for the Wyss Foundation in 2015, this “Hub Project” would support the foundation’s “core issue areas,” creating “research-based message frames” to “drive measurable change” and achieve “significant wins,” which in turn would “dramatically shift the public debate and policy positions of core decision makers,” “leading to implementation of policy solutions at the local, state, and federal level.”

While the actual operation would be housed in the Arabella network for tax purposes, the Wyss Foundation would provide all of its funding and Wyss representatives would secretly run the board. In other words, the Hub Project was designed to allow the Wyss Foundation to bypass the IRS prohibition on foundations intervening in elections—in order to aid Democrats.

Reforming Nonprofit-dom

As it stands, the Arabella network is a monument to the Left’s political weaponization of charities, as well as its innovativeness, ruthlessness—and vulnerability. For all the power this empire wields, it reveals how dependent the modern Democratic Party has become on expensive D.C. activists to win elections. Elite “Progressivism” is top-heavy and out of touch with the grass-roots. What would it take to capsize?

Private foundations have been barred from electioneering since the 1960s. They aren’t allowed to fund 501(c)(4)s—except to do (c)(3) activities—or engage in significant lobbying, either. Yet foundations make up the bulk of donors to the Arabella network, whose funds are lopsidedly lumped in its 501(c)(3) charities.

A drastic solution would be to radically redefine what the IRS considers “charitable” activities. Nonpartisan voter registration—as if such a thing actually exists—is one example. Ban it. Similarly, most experts agree that (c)(3)s may lawfully spend up to 25 percent of their budget on lobbying, which the IRS broadly defines as “attempting to influence legislation.”

Obviously, budget size is the key metric: New Venture Fund’s budget for 2021 was $964 million, theoretically freeing up $241 million for advocacy. That buys a lot of influence. In reality, though, New Venture Fund reported just $2.8 million in lobbying expenditures in 2021; yet it spent $234 million on “public awareness” and “education” programs to foster “public engagement [on] important issues.”

The smart approach here is to target the definition of issue “education.” Congress rightly took a light-touch approach to defining “charity” in the last century; today’s battles call for a firmer hand. If we want to restore America’s charitable sector, start by banning 501(c)(3)s from policy work under the guise of “education.” That will take lawyerly finesse. While they’re at it, lower the lobbying cap for (c)(3)s to 5 percent or less. Shunt it all into 501(c)(4) groups, removing donors’ tax-deductibility incentive, then consider lowering the (c)(4) lobbying limit to 25 percent of the total budget rather than its current 49 percent cap. That would move virtually all political dollars into a single pot (besides PACs) without forcing donor disclosure, which conservatives correctly defend under the Constitution’s First Amendment and leftists hypocritically crave.

More prosaic but no less important: Congress can also dramatically overhaul the Form 990 and 990-PF (for foundations) disclosure to reflect the modern nonprofit landscape. After all, the point of these documents is to show what groups are doing with their tax exemption. What use are they if important details are missing?

The Capital Research Center’s Robert Stilson has some excellent suggestions, many of which are included below:

• Foundations should cease reporting investments as a lump-sum and instead itemize all securities and other holdings;
• Foundations that make pass-through grants must identify the ultimate recipient(s) of their grants, not just the intermediary;
• The Schedule I grant list of foundations, unlike those of other nonprofits, doesn’t have a column for employer ID number (EIN), confusing readers—include this simple but vital data point;
• Foundation grants to foreign entities are reported in far less detail on a separate schedule—include them with domestic grants on the Schedule I and require the same information of domestic grants (e.g. address, grant purpose, EIN-equivalent);
• Similarly, ban nonprofits from using a grant recipient’s DBA (“doing business as”) name in the Schedule I;
• List all of the nonprofit’s owned DBAs, including those of fiscally sponsored projects;
• Require nonprofits to include all attachments and schedules when posting their Form 990 filing (since so many fail to do so);
• Force nonprofits to publicly post their latest Form 990 with all attachments online for general access, rather than withholding the documents for in-person requests;
• Generate a new schedule listing all fiscally sponsored projects (Arabella’s pop-ups) with their name, operating address, staff names and salaries, date of creation, anticipated date of achieving independency and tax exemption recognition, budget, grantmaking and lobbying, redacted donor list, and management fees paid to the sponsor;
• Alternatively, require fiscally sponsored projects to file their own, simplified Form 990;
• Expand list of contractors to every vendor over $10,000 (rather than the current $100,000);
• Expand employee and salary list to cover every full-time employee, rather than just the five highest-paid;
• Report all independent expenditures (i.e. TV ads) with individual cost, medium, detailed content description, and targeted candidate;
• Break down lobbying expenditures in detail, rather than as a lump-sum, by listing sums spent on individual bills, as well as contracted lobbyists and firms, by quarter.

Enacting these reforms would take a combination of congressional legislation and executive oversight of the IRS. Would they destroy the Arabella empire? Of course not. What they would do is make it harder for “progressive” groups to run political gambits in the shadows. They’d make it vastly more difficult to funnel foundation money into politics, run pop-up campaigns, and shuffle huge sums into dark corners. And they’d help legitimate reporters find and expose this difficult-to-trace information.

Congressional Republicans ought to accompany these reforms with a relentless onslaught of embarrassing investigations into the corruption of charities with subpoenas to the leadership of every major funder, activist group, and pass-through group in America. There’s more than enough information in the press about how they’re abusing nonprofit laws for partisan gain. The onus is on nonprofits to justify their tax benefits, so make ‘em sweat.

Many conservatives will wince at these far-reaching proposals, but it’s time for our movement to wise up and leave childish ways behind. We aren’t in the 1990s anymore; “unfair” is the defense of losers that gets us nowhere.

Here’s a better one: “Level the playing field,” a favorite slogan of the Left even as they clobber conservatives on the battlefield. Conservatives, let’s call them on their bluff.

This report was made possible with research by Bronson Winslow and Nick Givas.

(PDF version available here)