Nonprofit 60 Plus Association Didn’t Pay FEC Fine

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By Kenneth P. Doyle

The 60 Plus Association, a politically active nonprofit organization linked to the Koch network of conservative donors, failed to pay $45,000 of a $50,000 fine levied last year by the Federal Election Commission for violation of campaign finance disclosure rules.

The fine resulted from settlement of an FEC enforcement case—designated Matter Under Review (MUR 6818)—regarding 60 Plus’s failure to disclose funding for political ads received from another Koch-linked group, the Center to Protect Patient Rights (CPPR). Two other nonprofits, American Future Fund (AFF) and Americans for Job Security (AJS), were fined in the same matter, also for receiving undisclosed funding from CPPR.

AFF paid its fine of $140,000 in full and AJS also has paid its full fine of $43,000, according to a review of FEC documents by Bloomberg BNA.

Due to failure to pay the full amount of its fine, 60 Plus now has been referred by the FEC to the U.S. Treasury Department for debt-collection proceedings, officials said. FEC rules call for anyone failing to pay a fine to be referred to the Treasury for debt-collection proceedings after 90 days.

Alternative to AARP

60 Plus couldn’t be reached immediately for comment. The organization’s website describes it as a 25-year-old nonpartisan organization working to repeal the estate tax, save Social Security and Medicare, make prescription drugs affordable, and lower energy costs. The conservative group also supports less government, lower taxes, and “a strict adherence to the Constitution.” The association says it “calls on support from over 7 million activists” and has been called, “an increasingly influential senior citizen’s group,” recognized as an alternative to AARP.

As a nonprofit that is tax exempt under Section 501(c)(4) of the tax code, 60 Plus doesn’t disclose its donors, but the group has spent more than $10 million to influence federal elections in recent years, according to campaign spending reports filed with the FEC. Following the settlement of the FEC enforcement case, 60 Plus filed amended reports with the FEC saying that it received more than $4 million from the Center to Protect Patient Rights.

The three nonprofit groups involved in last year’s FEC settlement, 60 Plus, AFF, and AJS, received a total of $25.5 million in CPPR grants in 2010 and sponsored more than $20 million in ads in U.S. House election campaigns that year.

Koch Network Funding

CPPR, now known as American Encore, also is a nonprofit organized under Section 501(c)(4) of the tax code, which doesn’t disclose its funding sources. The organization reportedly was funded by a network of unidentified conservative donors linked to Charles and David Koch, who head Koch Industries Inc.

Lawyers for CPPR acknowledged that political consultant Sean Noble, who headed CPPR, helped direct the nonprofit groups’ ad campaign against House Democrats, according to FEC documents released after the enforcement case was closed. The lawyers asserted, however, that Noble was merely a hired vendor for the ad sponsors and not acting as an agent for CPPR when he worked on the ad campaign.

Fundraising for CPPR began in 2009 at a retreat for Koch network donors that took place in Aspen, Colo., Noble said in an interview for a story published in the National Review in 2014. Donors began pledging tens of millions of dollars for a political effort based on opposition to Democratic proposals for government-mandated health insurance, after an impassioned speech by one donor, according to Noble’s account.

Noble confirmed the fundraising effort for CPPR, but disputed some details in the National Review article, in an affidavit filed with the FEC. He said his references in the article to advertising efforts in the 2010 U.S. House campaigns related to the American Future Fund, Americans for Job Security, and the 60 Plus Association, but were not references to the Center To Protect Patients Rights. Noble insisted in the affidavit that the fundraising effort for CPPR was separate from the campaign advertising efforts of the three other nonprofit groups funded by CPPR.

Noble Controlled Effort, FEC Concluded

The money CPPR provided to AFF, AJS, and 60 Plus was part of a larger grant-making effort in 2010, which distributed a total of nearly $44.3 million in grants to 22 organizations, according to FEC documents. The money was intended “to build a coalition of like minded organizations and individuals, which worked to educate the public about healthcare reform and advocate in favor of patients rights.”

The groups receiving money from CPPR maintained, at least initially, that they did not receive any funds that were designated for particular ads. The groups later opted to settle with the FEC, however, and pay fines and file amended disclosure reports listing the grants they received from CPPR in 2010 as linked to previously reported ad expenditures. FEC rules require that money raised for campaign spending be disclosed.

FEC staff attorneys concluded that the facts presented by the various groups, along with the sworn affidavit from Noble, established that Noble was involved in producing and placing political ads “at the same time that he controlled the flow of funds from CPPR,” according to a report from the FEC general counsel’s office. Noble identified the congressional races in which the groups funded by CPPR would sponsor ads and helped approve the content for these ads, the report said. His consulting firm, Noble Associates, also served as a subcontractor to the groups airing ads and thus actually helped produce the ads funded by CPPR.

The FEC commissioners voted 4-1 in a closed meeting last year to accept the settlements with AFF, AJS, and 60 Plus. In an earlier vote revealed in the FEC documents, the commissioners split along party lines regarding whether to pursue enforcement action based on the proposition that the three nonprofits sponsoring ads were required to register with the FEC as regulated political action committees and report all of their financing. The three commissioners holding Democratic seats voted to pursue the case on that basis, while the three Republicans voted not to do so.

Freedom Partners Replaced CPPR

A new nonprofit organization, Freedom Partners Chamber of Commerce, was formed in 2012, following a California state enforcement case involving disclosure issues similar to those in the FEC matter. Freedom Partners reportedly served the function previously performed by CPPR—functioning as a kind of bank for the Koch network to provide money to other politically active nonprofit groups.

After Politico reported on the formation of Freedom Partners in 2012, the Koch Industries posted a statement on its KochFacts.com website saying that Freedom Partners was “a non-profit, non-partisan business league that promotes the benefits of free markets and a free society” and “operates independently of Koch Industries.” Freedom Partners reported in tax forms that it received hundreds of millions in revenue after its formation in 2012 but maintained that, as a nonprofit business association, it doesn’t have to report its donors.

Commenting last year on the settlements between the FEC and the three groups that received funding from CPPR—AFF, AJS, and 60 Plus—James Davis, executive vice president of Freedom Partners, said in an email to Bloomberg BNA: “These complaints have nothing to do with our organization.”

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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