May 19, 2016

Voters might not expect hedge fund dark money to pour into their local legislative races. But look back at recent special elections with clarity and look ahead with vision, and you can whisper, “Good Night, Democracy.”

Start with the hedge fund money front, Democrats for Education Reform. On January 21, 2016 DFER IEPAC received a $50,000 contribution from New York based Education Reform Now Advocacy to support the candidacy of Shaynah Barnes in the Democratic primary for the 1st Plymouth and Bristol senate seat. DFER IEPAC then spent $6195.43 to support Barnes, who lost. DFER IEPAC pivoted to Dan Rizzo in his bid to win the Democratic nomination for state senator from the 1st Suffolk & Middlesex district. On April 1 it got an infusion of $60,000 from Education Reform Now Advocacy and thereafter DFER IEPAC is recorded as spending $50,756.24 for Rizzo, who also lost. 

Which public spirited patron has taken such interest in these primary races?
Education Reform Now Advocacy is a 501c4 “social welfare” organization (in politics, often a front for untraceable dark money). Contributors to a 501c4 are anonymous. Education Reform Now Advocacy is related to Education Reform Now, a 501c3 education charity that also need not divulge its contributors, who get a tax deduction for their largesse. The most recent Form 990 tax return for Education Reform Advocacy is from 2013. One of its contributions that year was to Education Reform Now Advocacy. If you’re scoring at home, that means you could make a tax deductible contribution to a 501c3, which cannot engage in political activity but can contribute to a 501c4, which can engage in political activity. And no one will ever know.

Look on the bright side – until Citizens United, we never knew that New York hedge fund managers care so much about the people of Eastie, Brockton and Revere.

Also in the 1st Suffolk & Middlesex, there was Mass Values IEPAC, which spent $7,473.32 against Rizzo. Mass Values’ spending, which was as dishonest as it was last minute, was covered extensively by CommonwealthMagazine’s Michael Jonas. Mass Values has had support in the past from 1199 SEIU and the Massachusetts Teachers Association. If anyone has claimed the hit job on Rizzo, let me know.

A couple of other IEPACs spent but the source of their money is apparent, so it doesn’t count as dark money.

Dark money can come in the form of laundered Super PAC spending or directly from 501c4 social welfare organizations. That bring us to the Massachusetts Fiscal Alliance, esteemed winner of the 2015 Award for Fraud in Massachusetts Politics.  MFA dropped some money into the special election for Third Worcester house district. They also spent in 2015 in the 2nd Plymouth and Bristol senate district, backing Republican Geoff Diehl against Democrat Michael Brady. But we don’t know who fronted the pelf, because MFA is a 501c4 social welfare organization and doesn’t have to tell you, the voter, who is paying for the glossy mailers.

There isn’t any pattern in the special election races. But there is the 1st Suffolk & Middlesex, where Dan Rizzo raised and spent about $71,000, and Democrats for Education Reform kicked in $50,000 out of their New York hedge fund piggy bank. And there’s Mass Fiscal, which turns on a money spigot in otherwise sleepy state rep contests.

The special election spending was chump change. Advocates for charter schools have promised to spend up to $18 million dollars if they pursue a ballot measure in November. The 2015 year end OCPF report from Public Charter Schools for Mass shows it raised just over $493,000.00 last year. Of that amount $400,000 was kicked in by twelve high finance folk (several billionaires), and another $70,000 from Republican dark money outfit Strong Economy for Growth, Inc, a 501c4. At least we know the names of the billionaire benefactors, but this campaign promises to be a dark money jubilee. DFER will be in there, and so will many others in the charter school dark money universe. For these people, $18 million is chump change too.

Your future as a citizen is in hospice and the real future is with DFER and Mass Fiscal.  We think we’re turning into a restful night’s sleep in a democracy, and we’re waking up in a plutocracy. Sweet dreams. 

Democrats for Education Reform, dark money, charter schools, Massachusetts Fiscal Alliance

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