Watchdog asks IRS for probe of Leo-linked nonprofits

By Caitlin Oprysko

With Daniel Lippman

WATCHDOG ASKS IRS FOR PROBE OF LEO-LINKED NONPROFITS: Liberal watchdog group Campaign for Accountability is asking the IRS to examine the tax-exempt status of more than half a dozen nonprofit groups linked to the influential conservative activist Leonard Leo, arguing that Leo may have improperly used the nonprofits to fund a lavish lifestyle over the past half decade.

— According to a complaint filed with the IRS on Wednesday by the watchdog group, an analysis of tax filings from a web of nonprofits affiliated with Leo — Rule of Law Trust, Wellspring Committee, The 85 Fund, The Concord Fund, Federalist Society, Freedom and Opportunity Fund and Marble Freedom Trust — found that the organizations had paid for-profit firms run by Leo more than $73 million from 2016 to 2021.

— “There are questions as to whether the Leo-Affiliated Nonprofits have diverted substantial portions of their income and assets, directly or indirectly, to the personal benefit of Leonard Leo,” the group’s complaint reads. It highlights millions of dollars in payments from the dark money groups to two consulting firms either partially owned or run by Leo, BH Group and CRC Advisors.

— “Such payments were generally listed as made in exchange alleged consulting, research, public relations, or similar services, however, CfA has reasonable questions about whether those alleged services were actually rendered at all or, if services were rendered, whether the payments made were substantially in excess of the fair market value of those services,” the complaint says, though it doesn’t provide any direct evidence of its accusations.

— Details about the services provided by Leo’s consultancies are shielded from the public, and CRC declined to provide information about them for a report from POLITICO’s Heidi Przybyla last month that examined how Leo’s personal wealth appeared to flourish at around the same time the hefty payments began.

— Campaign for Accountability argues that the IRS has investigative tools at the agency’s disposal to shed light on whether any of the payments amounted to illegal self-dealing by Leonard or his associates. In a statement to PI, Leo called the complaint’s accusations “absurd.”

— “We put our clients' money to work more effectively than any other enterprise of its sort,” he said. Leo also pointed to the watchdog’s own origins as part of a network of dark money groups on the left (Campaign for Accountability was spun off in 2017 from the liberal nonprofit Hopewell Fund).

— “Does Campaign for Accountability plan to ask the IRS or state Attorneys General to investigate Arabella Advisors and its web of nonprofits that have received hundreds of millions of dollars from a foreign billionaire seeking to influence U.S. elections?” Leo asked.

Happy Thursday and welcome to PI. Our apologies to those of you receiving this newsletter for the second time today due to a production error, but your host has always loved an extra helping. As always, we run on tips — even during recess weeks — so let’s hear ‘em: coprysko@politico.com. And be sure to follow me on Twitter: @caitlinoprysko.

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BLUE ORIGIN SIGNS 2: Jeff Bezos’ space flight company Blue Origin has added some familiar faces at two new outside lobbying firms as it steadily builds up its lobbying footprint in D.C. The company brought on Actum, the lobbying and consulting firm run by former White House acting OMB Director Mick Mulvaney, back in February, according to newly filed disclosures.

— Actum’s Lauren Lipin and Kevin Kelly — both of whom joined the firm earlier this year from Clark Hill, where they already lobbied for Blue Origin — will work on the account. Blue Origin directly retained Juliane Sullivan of J.Sullivan Advocacy, who lobbied for the company as a subcontractor to Dewey Square Group, at the beginning of the year, another disclosure filed this morning shows.

— Both of the firms will lobby on appropriations issues for Blue Origin, which successfully completed its first crewed flight in 2021 and is competing for a federal contract to shuttle astronauts to the moon. Blue Origin’s lobbying expenditures have steadily ticked up over the past decade, and the space flight company’s annual spending topped $2 million for the first time last year. Blue Origin also retains Maynor & Stiers, Barnes & Thornburg, K&L Gates and Clark Hill.

ANOTHER QUANDARY FOR 1 FIRST STREET: ProPublica’s Joshua Kaplan, Justin Elliott and Alex Mierjeski published an astonishing deep dive this morning on the ties between Supreme Court Justice Clarence Thomas and GOP megadonor and businessperson Harlan Crow, raising more questions about the lack of ethics rules governing members of the highest court in the land.

— “For more than two decades, Thomas has accepted luxury trips virtually every year from the Dallas businessman without disclosing them, documents and interviews show. … The extent and frequency of Crow’s apparent gifts to Thomas have no known precedent in the modern history of the U.S. Supreme Court.”

— “These trips appeared nowhere on Thomas’ financial disclosures. His failure to report the flights appears to violate a law passed after Watergate that requires justices, judges, members of Congress and federal officials to disclose most gifts, two ethics law experts said.”

— While Crow acknowledged to ProPublica he’d “extended ‘hospitality’ to the Thomases ‘over the years,’” he said that Thomas had neither asked for it nor received different treatment than others in his circle, which over the years has included conservative activists like Leo as well as other prominent business executives. Thomas did not comment for the story.

— Democrats on the Hill quickly seized on the report, with Senate Judiciary Chair Dick Durbin (D-Ill.) contending that the lack of transparency “undermine[s] the trust that our country places in the Supreme Court” and calling for “an enforceable code of conduct for Justices.” Fellow Judiciary Committee member Sheldon Whitehouse (D-R.I.), who has long railed against opaque judicial ethics rules, demanded an investigation into the matter by Chief Justice John Roberts.

AFP PRESSES BATTLEGROUND SENATORS ON DOOMED GOP ENERGY BILL: Koch-backed advocacy group Americans for Prosperity is rolling out a six-figure ad campaign to squeeze vulnerable Senate Democrats over House Republicans’ sprawling energy package. The group is running digital and connected TV ads in seven states sure to feature tight Senate races next fall, urging incumbents there to throw their support behind the bill.

— The Lower Energy Costs Act, which was the new House GOP majority’s first marquee policy proposal, passed in the House last week with support from four Democrats from swing districts, though it’s all but certain to die in the Senate.

— The package included a number of partisan messaging provisions aimed more at jabbing President Joe Biden, who has said he would veto the bill, “but the House GOP also sought for the bill to represent an opening bid on the wonky issue of energy permitting — a rare policy area that both parties believe could lead to a bipartisan deal later on with the Senate,” our Josh Siegel reported last week.

— H.R. 1’s likely fate isn’t slowing up AFP, though, which pushed for House passage along with a coalition of other conservative advocacy groups and think tanks. “For over two years President Biden has waged a war on American energy, and families across the country are paying the price,” AFP vice president of government affairs Akash Chougule said in a statement. “We are urging these Senators to make the Lower Energy Costs Act a top legislative priority and deliver it to President Biden’s desk.”

— AFP’s ads will run in Arizona, Montana, Nevada, West Virginia, Ohio, Pennsylvania and Wisconsin, and ask viewers to urge their senator to “lower energy costs now.”

WHOSE PROFITS ARE THEY ANYWAY: “Visitors driving into Montana’s Glacier National Park this summer must buy a vehicle pass on Recreation.gov. The pass is free, but visitors pay a $2 fee to book the reservation. Visitors might assume that, like entrance fees, the reservation charges help pay for improving trails around the park’s Running Eagle Falls or expanding the park’s volunteer program. But a chunk of the money ends up with consulting firm Booz Allen Hamilton Inc.,” The Wall Street Journal’s Allison Pohle reports.

— The firm, which runs the government website on which visitors book campsites and hikes on federal park land “gets paid every time a user makes a reservation on Recreation.gov, per its government contract. … Booz Allen invoiced the government for more than $140 million from October 2018 to November 2022, the most recent date available, according to documents obtained by The Wall Street Journal in a public-records request.”

— The five-year arrangement, which is up for renewal this year, “has its critics, including members of a lawsuit against Booz Allen seeking class-action status, and other die-hard national park visitors. They say the government has let a multibillion-dollar company profit by charging for access to public lands — access that used to cost less, or nothing. … Booz Allen says such claims mischaracterize its work and its compensation structure,” while “Recreation.gov officials say the arrangement is an example of efficiency in government.”

— Matthew Hittle is joining the House Ways & Means Committee as a professional staff member for Republicans on the health subcommittee. He’s currently a senior policy adviser at Akin Gump Strauss Hauer & Feld.

— Hannah Cooper is now deputy director of federal relations for Maryland Gov. Wes Moore. She most recently was legislative director for Rep. Donald Norcross (D-N.J.).

— Jonathon McClellan has joined Woodside Energy as principal of corporate affairs, focused on federal and state government relations. He most recently served as director of external and legislative affairs for AT&T and is a Sen. Ted Cruz (R-Texas) alum.

— Sean Winkler is joining the Maryland Department of Transportation as deputy director of federal infrastructure strategy. He’s currently a vice president at Tai Ginsberg & Associates.

— FMI – The Food Industry Association has promoted Dana Graber to associate general counsel and senior director for legal and regulatory affairs.

— Mary Ellen Golcheski is joining the National Association of Insurance and Financial Advisors as a legislative liaison, and the association has promoted Michael Hedge and Maeghan Gale to senior directors and Cody Schoonover to PAC manager.

— Howard Byck is joining the U.S. Chamber of Commerce Foundation as its first senior vice president of partnerships and head of development. He was most recently senior vice president of corporate and sports alliances at the American Cancer Society.

— Elizabeth Garner is now president of the American Medical Women’s Association. She’s the U.S. chief scientific officer for Ferring Pharmaceuticals.

— Ben Krauss has returned to speechwriting and strategic communications firm Fenway as CEO. He most recently was senior adviser in the Office of Clean Energy Innovation and Implementation at the White House on a temporary stint as a special government employee.

— Jessica Shortall has joined the R Street Institute to lead its Safer from Harm Coalition, a new effort to advance harm reduction public policy. She previously was vice president of corporate engagement at America Competes and managing director of Texas Competes.

— Angela Bell is now manager of state programming at GOPAC. She previously was grassroots manager at FreedomWorks.

— Tori Bateman is now outreach/grasstops coordinator at the Quincy Institute. She was previously policy advocacy coordinator at the American Friends Service Committee.

— Susan Holmes is now wildlife campaigns director at Environment America, per Morning Energy. She most recently was federal policy director at the Wildlands Network.

— Dex Hunter-Torricke is the new head of communications and marketing for AI company DeepMind, Morning Tech reports. He most recently was vice president of global communications and public engagement for Meta’s oversight board.

— Doug Beck is joining the Pentagon as the next director of the Defense Innovation Unit. He was most recently a vice president at Apple.

— Gretchen Kroh is joining Carbon180 as a managing policy advisor for the group’s agricultural work. Kroh was previously at USDA, where she worked on climate issues.

— Michael Gonda has been named chief impact officer for North America at McDonald’s, overseeing state and local government relations, public affairs, communications, ESG and philanthropy for the U.S. and Canada. He most recently was global chief communications officer at the company.

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None.

314 Action Impact Slate (PAC)
Campaign Committee for Waeyaert for Office (PAC)
Protect :Long Island (Super PAC)
Organizing for a better tomorrow (Hybrid PAC)

535 Group, LLC: Leidos, Inc.
Acg Advocacy: Sun Group Holdings Limited
Actum I, LLC: Association Of Universities For Research In Astronomy, Inc.
Actum I, LLC: Blue Origin, LLC
Baker Donelson Bearman Caldwell & Berkowitz /The Daschle Group: Transformations Treatment Center
Capitol Resources, LLC: The Skills Foundation Of Mississippi
Colorofchange.Org: Colorofchange.Org
Faegre Drinker Biddle & Reath LLP: Circle Medical
Foley Hoag LLP: Sjogrens Foundation
Ius Impact LLC: Coalition Against Unjust Sentencing
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Hillside Atlanta
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): One H2
Neale Creek, LLC: Rmd USa LLC
Strategies 360: City Of Kenmore, Washington
Strategies 360: City Of San Jacinto, California
Vannevar Labs: Vannevar Labs

Ajw, Inc.: Aqua Metals, Inc.
Blount Strategic Initiatives: Big Cat Rescue
Congressional Partners: Iowa Wesleyan University
Faegre Drinker Biddle & Reath LLP: Intex Recreation Corp.
Forbes-Tate: Criteo Corporation
Holland & Knight LLP: Board Of County Commissioners Of Pitkin County, Co
J.Sullivan Advocacy: Dewey Square Group On Behalf Of Blue Origin, LLC
Liberty Square Group: Massachusetts Seafood Collaborative
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Apex Management Solutions, LLC (On Behalf Of Apex Health, Inc.)
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Edenred, USa
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Gene Juarez Academy
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Hascor International Group
Mcguirewoods Consulting (A Subsidiary Of Mcguirewoods LLP): Tactical Air Support, Inc.
Nexxus Consulting, LLC: Ghost Management Group, LLC
Polaris Capitol Strategies LLC: Franklin Resources, Inc.
Polsinelli Pc: Vyaire Medical, Inc.
Vista Consulting, Inc.: Caylym Technologies International LLC

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