May 17, 2017

On May 13 the AP’s Steve LeBlanc provided a fine update on spending on the 2016 ballot measure Question 2, The Massachusetts school ballot cost $43 million. But it’s also a good example of how serious people who look at dark money – including me – miss parts of the real story.

The AP report has the final spending amounts as over $16 million for the opposition, almost all from teachers unions; and $27 million on the pro-charters side. A number of wealthy individuals were willing to go on record including out-of-staters Michael Bloomberg for $490,000 and two WalMart heirs, Jim Walton with $1,125,000 and Alice Walton with $710,000. A few Massachusetts plutocrats like Abigail Johnson kicked in too.

But the big money was dark as Mr. LeBlanc reported: “The group spending the most to support the question — the New York City-based Families for Excellent Schools — contributed more than $17 million. The group has refused to say who is funding them.”

By attracting huge donations from famous donors like Bloomberg the dark money networkers threw inquisitors off the trail. In 2016 The Boston Globe crept up on the dark money story in an August 19 story by Michael Levenson, Donors behind charter push keep to shadows. Superb reporting by Mr. Levenson, but the Globe then averted its eyes as if in horror. A Proquest search of “dark money” in the Globe archives from August 19 forward shows only passing references; and remember, there were no required Office of Campaign and Political Finance filings until September 20, 2016, so the Globe ignored evidence that climbed to $17 million.

Too bad because Mr. Levenson correctly identified the likely source of much of the $17 million in dark money – individuals associated with an organization called Strategic Grant Partners of Boston, including the billionaire Seth Klarman and Managing Director Joanna Jacobson. For the case that they probably organized the giving, see Dark Money: Pro-Charter-School Fat Cats Took A Page from Offshore Gambling Tycoons. For the case that these same individuals have been playing the dark money game in Boston since at least 2011, see Dark Money Sharks Devour Mass. Education Policy. And for a less developed inference that the same moneybags were behind Stand for Children’s approximately $1 million offer to back John Connolly against Marty Walsh in 2013, see Dark Money Sharks Circled 2013 Boston Mayor’s Race.

When I looked at the 2011-12 case I had the benefit of hind sight – I’d been looking at all of Strategic Grant Partners publicly available Form 990 PF tax returns and noticed large grants to Stand for Children. The Globe archives explained what Stand for Children was up to. And Stand for Children, bless its corporate heart, publishes lists of its donors in its annual reports which showed contributions from Klarman, Jacobson and other wealthy Bostonians. 

In a June 18, 2011 column the Globe’s Lawrence Harmon extolled the virtues of Stand for Children as able to “match the financial clout of the Massachusetts Teachers Association.” In a June 8, 2012 story detailing the political potency of Stand for Children the Globe included as their major funders the Bill & Melinda Gates Foundation, Walton Foundation, and Bezos Foundation.

In an August 20, 2013 story the Globe reported that Stand for Children would put $500,000-$750,000 behind Connolly in the preliminary election. The story described the group as “out-of-state group based in Oregon.” Some on the left criticized Stand for taking money from the Walton Family Foundation. Even when Harmon published an admission from Stand’s local director that “virtually all of our money that is spent in Massachusetts is raised in Massachusetts,” neither Harmon nor anyone else seemed curious about the true source.  In January 2014 the paper was still identifying Stand for Children’s major financial backers as the Walton and Gates foundations.

None of the reporting in the Globe from 2011-2016 suggested that the biggest probable funders for Massachusetts operations were not outsiders like the Waltons, Gates, or Bezos, but home grown plutocrats (with the exception of Levenson’s August 2016 piece, which was roundly criticized in a letter to the editor from Ms. Jacobson). Our Boston billionaires must be very satisfied when campaign money is reported as coming from sources like Walton and Gates and not from them.

In the first paragraph I wrote that all of us in Massachusetts “including me” have gotten the dark money angle wrong. Remember when I mocked all the out of state dark money coming from Families for Excellent Schools of New York in New Campaign Song for Great Schools Massachusetts: ‘It’s Up to You, New York, New York’? Those millions probably originated in Boston, headed down to New York for some laundering, and returned to Great Schools Massachusetts.

Dark money presents unique challenges for journalists. It’s run by wealthy and sophisticated interests who know how to hide money. When you see a big name like Gates it’s tempting to report that name, without digging further to find out the source of the Boston money was from Boston. It takes an enormous amount of work to find out where the money is coming from, and often that work can only succeed when the story is old news. In many cases we may never determine who was behind the donations. 

It's not that the press doesn't care, it simple does too little too late. That's easy for a professor like me to say, but you don't need to be a journalist to recognize that it doesn't negate the essential truth. Pressure needs to be brought to bear on regulators for more aggressive reporting requirements with more and earlier dates for disclosure. (The first reporting period for the ballot committees in 2016 was sixty days before the General Election, September 20; that’s ridiculous.) Digital technology should make detailed OCPF submissions easier. We need new laws addressing the Russian nesting doll problem, where committees get contributions from other hidden entities, and on and on. Such steps would mean the public would have a better idea of who was trying to buy an election or referendum before the votes were cast.

This year The Washington Post adopted as its slogan “Democracy dies in darkness.” I agree.

Strategic Grant Partners, dark money, Boston Globe

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