How to Raise $89 Million in Small Donations, and Make It Disappear

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How to Raise $89 Million in Small Donations, and Make It Disappear

A group of conservative operatives using sophisticated robocalls raised millions of dollars from donors using pro-police and pro-veteran messages. But instead of using the money to promote issues and candidates, an analysis by The New York Times shows, nearly all the money went to pay the firms making the calls and the operatives themselves, highlighting a flaw in the regulation of political nonprofits.

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The phone rings. The caller knows your name, and opens with a dad joke.

“Carla? Finally, it’s good to hear a kind voice. That last call was tougher on me than my mother-in-law’s meatloaf. (chuckles) I’m only kidding.”

He is asking for donations, for a group that helps the police.

“This is Frank Wallace calling for the American Police Officers Alliance. Very quickly, we’re mailing out the envelopes to help fight for our officers who protect our nation’s citizens, just like yourself. Once you receive your card in the mail, you can send back whatever you think is fair this time. That’s all.”

This is not a policeman. This is not even a human. This is a computer, making thousands of robocalls with the same folksy voice.

And like “Frank Wallace,” the American Police Officers Alliance is not what it seems.

In theory, it is a political nonprofit called a 527, after a section of the tax code, that can raise unlimited donations to help or oppose candidates, promote issues or encourage voting.

In reality, it is part of a group of five linked nonprofits that have exploited thousands of donors in ways that have been hidden until now by a blizzard of filings, lax oversight and a blind spot in the campaign finance system.

The campaign-finance system is built to police who puts money into politics, legal experts say. These groups embodied a flaw: The system is poorly prepared to stop those who raise money and channel it somewhere other than candidates and causes.

By minimizing their aid to candidates, the consultants who helped set up the five nonprofits avoided scrutiny from the Federal Election Commission and most state watchdogs, and put their groups under the jurisdiction of a distracted and underfunded regulator, the Internal Revenue Service. As a result, their spending records were posted not on the F.E.C.’s easily searchable site, but on a byzantine I.R.S. page written in bureaucratic jargon.

To understand what these groups did with their $89 million, The Times analyzed 15,851 pages of their financial reports, including 135,843 separate expenditures, searched corporate records in 10 states, and interviewed the nonprofits’ leaders and vendors.

Four of the five nonprofits remain active. In statements, they said they had not sought to avoid oversight, enrich insiders or deceive donors.

Instead, the groups said, they simply believed in helping politicians indirectly — not by giving them money or buying them ads or mentioning their names, but by obliquely raising issues that could shift voters their way.

To that end, the groups said, even fund-raising calls from “Frank Wallace” were part of their mission. Since they mentioned policing — a topic voters might care about — the calls were not a means to an end in the work of influencing elections. They were the work itself.

“We have met, and in fact exceeded, in our mission to raise awareness of police issues, hold politicians accountable for shameful treatment of police officers, and activate grassroots supporters who demand change,” said Simon Lewis, one of the three Wisconsin consultants who helped establish the groups and who serves as president of one of them, the National Police Support Fund.

‘We’re misleading people who have given hard-earned money.’

Former president of the American Police Officers Alliance

Campaign-finance experts said that the groups’ defense of their work — especially their arguments that the fund-raising calls were political activism in themselves — seemed to test the limits of what was allowed under law.

“Constructing an elaborate self-licking ice cream cone, or fund-raising cycle that feeds itself, that’s not an exempt purpose,” said Matthew Sanderson, a lawyer at the firm Caplin & Drysdale who has advised Republican campaigns, using the I.R.S.’s term for an allowable use of the groups’ money. “The fund-raising has to be for something.”

A lawyer for the active groups, Craig Engle, said all four had faced “tax exempt compliance examinations” by the I.R.S. that began in the spring of 2022. Mr. Engle said that an I.R.S. representative had told him in a phone conversation Friday that the groups would face no penalties, but that the service had not yet issued a decision in writing. Another lawyer for the nonprofits said the I.R.S. had told the groups they could continue “to operate as-is.”

The I.R.S. declined to comment about the groups, citing taxpayer-privacy rules.

In their calls, the groups identified themselves to potential donors as political organizations. Beyond that, they were often vague about whom they supported and how. The American Police Officers Alliance told donors it was “supporting efforts to elect lawmakers to advocate for those who protect our nation’s citizens.”

Ryan Meyer, who was president of the American Police Officers Alliance from 2017 to 2021, said the three Wisconsin consultants used him as a figurehead and ousted him after he learned that most of the money raised by the group went back into more fund-raising and demanded changes in the organization’s direction.

“It made me sick to my stomach,” Mr. Meyer said. “We’re misleading people who have given hard-earned money.”

Money Went Back to Insiders

On paper, the nonprofits are not connected to one another. In public filings, they list separate boards of directors, and separate offices in Washington’s Virginia suburbs.

The Times found their connections — to each other, and to the three Wisconsin consultants — by following their money through a web of shell companies and corporate aliases.

The Times’s analysis showed that the five nonprofits had paid a combined $985,000 to a company in Baltimore called “Voter Mobilization LLC.” It was registered in Delaware — where corporate-secrecy laws meant its owners did not have to be disclosed.

In reality, the Baltimore address was just a virtual office, where the company received mail but kept no staff. Voter Mobilization LLC was actually owned by an obscure political firm called Campaign Now, which was in turn owned by a 37-year-old Republican consultant from Wisconsin named John W. Connors, a central figure who appears to connect all five nonprofits.

Tax records show that the five groups paid $1.1 million to companies where Mr. Connors was either the owner or a partner. The payments were part of a pattern in which the nonprofits paid firms connected to the three consultants for “political support services” and other tasks like bookkeeping and consulting.

Companies connected to PAC insiders made millions

The five political nonprofits paid $2.8 million to companies owned by or connected to the three men who controlled the nonprofits themselves. Many of those payments were made through shell companies that disguised where the money was going.

Payments to companies connected to John W. Connors

Strategic

Compliance Services

Precision Compliance Consulting

Payments to companies

connected to John W. Connors

“I do this to help people without a voice organize, raise money and design a platform,” Mr. Connors said in a statement. He confirmed his company’s ownership of Voter Mobilization LLC. “Yes I am paid for what I do (everybody is) but my real compensation is the satisfaction of Americans getting involved in the system,” he said.

In another instance, the nonprofit groups said they had paid six different vendors spread across Illinois, Pennsylvania, Colorado, Nevada, Texas and Tennessee. But corporate records showed a common thread: All of those companies were actually aliases for — or a subsidiary of — a single Wisconsin firm owned by Kyle Maichle, another of the consultants behind the nonprofits.

Mr. Maichle, 40, was a researcher for Mr. Connors in 2011 and 2012. In 2017, with Mr. Connors’s help, Mr. Maichle started his own company, Precision Compliance Consulting. The nonprofits paid Mr. Maichle’s companies about $876,000.

“I created the trade names to protect my newly formed companies in a radicalized political environment,” Mr. Maichle said in an email.

The analysis by The Times also found about $839,000 in payments from the nonprofits to other companies owned by Mr. Lewis, the third of the consultants and another former employee of Mr. Connors.

A captain in the Wisconsin Army National Guard’s military police, Mr. Lewis, 37, embodies how these groups and their vendors are intertwined: He is president of one nonprofit group, the National Police Support Fund, was an officer of another and has been a vendor to all five.

He also illustrates the secrecy that shrouded those connections. The National Police Support Fund repeatedly told the I.R.S. it had not engaged in business transactions with any board members — even as it did so with him. In one case, the filing attesting that there had not been insider transactions was signed by Mr. Lewis himself, as president.

“This appears to be a scrivener’s error on the part of the accountant. This happens,” the National Police Support Fund said in a statement.

Mr. Connors, Mr. Lewis and Mr. Maichle were all active in college conservative politics in Wisconsin about 15 years ago, when Mr. Connors was the leader of campus Republicans at Marquette University.

Mr. Connors founded Campaign Now before he graduated, and built it into a firm that handled robocalls and voter outreach. He hired Mr. Lewis and Mr. Maichle, but made clear who was in charge: the firm’s website gave his title as “Boss Man.”

In 2015, Mr. Connors’s company appeared to land a new lucrative client: Veterans Action Network. It was a 527 group, which meant it could take donations, but not offer donors a charitable deduction. It paid Mr. Connors’s company for strategy consulting.

John W. Connors at an April 2007 “Animal Rights Barbecue” hosted by the Marquette College Republicans.

The Marquette Tribune

At one point, Mr. Connors appeared to acknowledge that in the veterans group his company had in effect created its own client, the first of the five nonprofits that the three men would have a hand in establishing.

“Group was started by Simon Lewis on my team and he assembled the board of directors,” Mr. Connors wrote in an email to Paul Brown, whom Mr. Connors was recruiting to serve as the nonprofit’s executive director. In that email, Mr. Connors talked about the nonprofit as “we”: “We would start you out in an Executive Director [or] VP type role with aim to put you in a formal President role if it works out.”

“It all went through John and Simon,” said Mr. Brown, who shared the email with The Times. He took the executive director job, then left after a couple of months, uncomfortable with the idea of raising money for the group.

“It was pretty much all spent on fund-raising,” Mr. Brown said.

Veterans Action Network’s disclosures show it raised $6.1 million before shutting down in 2019.

Of that, about $102,000 went to Campaign Now, the firm started by Mr. Connors, and another $112,000 to companies where Mr. Connors, Mr. Maichle or Mr. Lewis was either the owner or a partner, tax records show. Mr. Maichle left Campaign Now in 2012, and Mr. Lewis in 2016, to start their own firms.

Veterans Action Network also contracted extensively with other call centers and fund-raising consultants — with no apparent links to Mr. Connors and his associates — to solicit donations. Overall, The Times’s analysis found, Veterans Action Network spent about 92 percent of its donations on more fund-raising, a level that made it an outlier among its peers.

Paul Brown at his home in Richardson, Texas. Mr. Brown was briefly the executive director of Veterans Action Network in 2016.

Laura Buckman for The New York Times

In the 2014, 2016 and 2018 election cycles, Veterans Action Network spent a higher percentage of the money it took in on fund-raising than any other large 527 group in the country, according to the campaign watchdog OpenSecrets. Most of the others spent far less, under 33 percent.

It was an outlier in another way, too. Every year, the I.R.S. asks 527 groups if they engaged in any “direct or indirect political campaign activities” to help candidates. Many of its peers said yes, and listed hundreds of thousands of donations to state and local groups, or spending on issue ads that highlighted candidates’ positions.

But Veterans Action Network usually said no. The exception was 2018, when it said it had spent $1,000, a sliver of its revenue.

So if it was not active in politics, what was the point of Veterans Action Network?

The man who was listed as the group’s treasurer, Patrick Stephan, said in a brief phone call that he did not know how the group spent its money, or why it had shut down. The man listed as its president, Dan Curran, did not respond to questions.

Mr. Connors, in an email to The Times, said he could not speak for the nonprofit. Contradicting his own email from 2016, he said the group’s leaders had chosen him — not the other way around.

“I believe that getting more citizens & voters engaged — helping them have a voice in the political and legislative process and being informed/engaged on issues is a good thing for our country,” Mr. Connors wrote.

The four new 527 groups started by people connected to Mr. Connors mimicked the methods employed by Veterans Action Network — with one improvement. The veterans group had used human callers to raise money. The new nonprofits used robocallers that sounded deceptively human, and could operate on a much wider scale.

The National Police Support Fund, where Mr. Lewis was president and Mr. Maichle the treasurer, used robocalls that opened with a joke about the caller’s wifelisten.

The American Police Officers Alliance featured both the Midwestern-sounding “Frank Wallace” and “David,” with a thick New York accent. “David” said donors’ money would help elect pro-police legislators, and help the families of slain police officerslisten. Mr. Maichle had filed the paperwork to incorporate that group, listing Mr. Lewis as an officer.

The American Veterans Honor Fund frequently opened calls with a jokelisten, but quickly pivoted to more somber topics including veteran suicide and homelessnesslisten. A longtime friend and advisor to Mr. Connors was that group’s president, and Mr. Lewis filed its paperwork.

The fourth group, Firefighters and EMS Fund, talked about how deadly firefighters’ work is, and said its mission was to “support legislation that will save lives.” It asked for pledges of $30 or $50 listen. Its president was formerly an intern at Campaign Now.

The organizations’ calls were recorded by Nomorobo, a company that collects robocalls so it can help customers block them. The company’s founder, Aaron Foss, said it had recorded tens of thousands of calls from just these four groups — putting them among the most prolific and longest-running robocallers his network has ever tracked.

The calls captured by Nomorobo were made using a powerful new technology, a “soundboard,” according to a spokesman for the groups’ largest vendor for fund-raising calls, New Jersey-based Residential Programs, Inc.

A soundboard is a computer program, preloaded with snippets of recorded dialogue, down to uh-huhs, thank-yous and mother-in-law jokes. By clicking buttons, an operator anywhere in the world can “speak” to donors in colloquial English without saying a word.

‘I think they owe people the money back.’

Louise McConkey, who has given money to the nonprofits

“One, it keeps everybody on script. Two, you don’t hear the foreign accent. And three, you don’t hear the call center noise,” Mr. Foss said.

“If you say, ‘Are you a robot?’,” Mr. Foss said, “there’s a button that says, ‘No.’”

The calls worked. The groups have reported bringing in more than 18,000 donations. More than 92 percent were for amounts smaller than $200.

“They say this will help with fallen officers, and this will help in a political way with getting new uniforms for the firemen. But in a political way, not a direct way,” said Louise McConkey, 72, a retiree in Puyallup, Wash., who has made 35 donations to the five groups.

But Ms. McConkey said that her donations, totaling $3,650, left her with less to give to other causes she believes in, like St. Jude’s Cancer Research Hospital. She said she was surprised to learn how little money went to directly supporting candidates.

“I’m pretty upset,” she said. “I think they owe people the money back.”

What Happened to $89 Million?

In the 2022 election cycle, OpenSecrets tracked 202 similarly large groups organized as 527s, and found that only 13 percent of them spent more than a third of their expenditures on fund-raising. Among them, the four connected to Mr. Connors and his associates ranked first, second, fourth and sixth in total fund-raising expenditures.

The groups’ biggest contractor over the years, receiving $20 million, was Residential Programs, which has no known ties to Mr. Connors, Mr. Lewis or Mr. Maichle. Many of the other call centers they hired were hard to track. They did not respond to requests for comment, or were registered in states where their ownership and contact information were kept secret.

The five nonprofits were outliers in the way they spent their money

Similar nonprofits that spent money on fund-raising efforts allocated less than 8 percent of their total revenue to raising money, according to OpenSecrets.

Similar political nonprofits

Groups associated with Mr. Connors

7.8% spent on

fund-raising, on average

90% spent on fund-raising

Similar political nonprofits

7.8% spent on

fund-raising, on average

Groups associated with Mr. Connors

90% spent on fund-raising

Sources: OpenSecrets; New York Times analysis

The average spending for similar political nonprofits is the average fund-raising expenditure in 2020 and 2021 for groups that were among the 527 companies that OpenSecrets analyzed that had more than $100,000 in total annual expenditures and spent more than $0 on fund-raising.

While the groups spent heavily on fund-raising, they also told the I.R.S. they had spent only small sums — or, sometimes, nothing at all — to help candidates get elected.

In the election year of 2020, for instance, the four active groups raised $20 million. But when they made their annual filings to the I.R.S., three of the groups answered “no” to the question asking if they had helped any candidates that year — either directly or indirectly.

The Firefighters and EMS Fund was the only one that said yes. It spent $23,300 to support a series of state and local ballot initiatives, like a property-tax levy to fund the fire department in small Jerome Township, Ohio.

The groups avoided helping candidates on purpose, said Mr. Engle, a Washington lawyer they recently hired as a legal adviser. He said they made sure not to exceed $1,000 in direct aid to federal candidates — which could trigger a requirement to register with the F.E.C. — or to exceed state-by-state thresholds that would trigger a requirement to register with state agencies. That left them regulated by the I.R.S., which monitors 527 groups that the others do not.

“Helping candidates directly is not always the best use of money. Candidates often have more than enough money,” Mr. Engle said.

Thousands of small payments obscured where the money went

The nonprofits often broke their transactions out into payments as small as $1. That means someone looking at the filings for the Firefighters and EMS Fund would need to wade through 1,919 pages to understand just one year of spending. Each circle in this graphic represents one payment reported by the Firefighters and EMS Fund in 2021.

The Firefighters and EMS Fund reported

no political contributions in 2021.

Most of the money — more than

$4.4 million — went to fund-raising

companies via tens of thousands

of small payments.

It paid $157,000

to companies owned

by PAC insiders.

Residential Programs Inc.

$1.2 million

Campaign Calling LLC

$1.3 million

Grassroots Fund Group

$175,000

Group Consultants Inc.

$56,000

Pro Speaking LLC

$178,000

Other expenses included

travel, Amazon purchases

and bank fees.

The Firefighters and EMS Fund reported

no political contributions in 2021.

It paid $157,000

to companies owned

by PAC insiders.

Most of the money — more than

$4.4 million — went to fund-raising

companies via tens of thousands

of small payments.

Grassroots Fund Group

$175,000

Residential Programs Inc.

$1.2 million

Campaign Calling LLC

$1.3 million

Simple Data, LLC

$920,000

Group Consultants Inc.

$56,000

Pro Speaking LLC

$178,000

Other expenses included travel, Amazon purchases and bank fees.

The Firefighters and EMS Fund reported

no political contributions in 2021.

It paid $157,000

to companies owned

by PAC insiders.

Most of the money — more than

$4.4 million — went to fund-raising

companies via tens of thousands

of small payments.

Grassroots Fund Group

$175,000

Pro Speaking LLC

$178,000

Campaign Calling LLC

$1.3 million

Group Consultants Inc.

$56,000

Residential Programs Inc.

$1.2 million

Other expenses included

travel, Amazon purchases

and bank fees.

The Firefighters and EMS Fund reported

no political contributions in 2021.

It paid $157,000

to companies owned

by PAC insiders.

Most of the money — more than

$4.4 million — went to fund-raising

companies via tens of thousands

of small payments.

Campaign Calling LLC

$1.3 million

Grassroots Fund Group

$175,000

Group Consultants Inc.

$56,000

Pro Speaking LLC

$178,000

Residential Programs Inc.

$1.2 million

Other expenses included

travel, Amazon purchases

and bank fees.

In recent years, the Justice Department has prosecuted a handful of people for running “scam PACs” — political action committees that diverted most of their donors’ money to insiders and endless fund-raising.

“These are not scam PACs,” Mr. Engle said of his clients, because, he said, they stuck to the letter of the law.

Excerpts from the Firefighters and EMS Fund’s tax filings show payments to clothing stores and a pet-sitting service.

Tax law says only that the nonprofits must be “operated primarily” to influence the election of candidates, or the selection of unelected officials like Supreme Court justices.

Several campaign-finance experts said that was a loose limit, but that these nonprofits still seemed to stretch it.

“Indirect expenses have to support direct expenses,” said Ellen Aprill, a law professor at Loyola Marymount University who has studied 527 groups. “Why are you spending money fund-raising, if you don’t have any candidate you’re going to use it for?”

Board Members Say They Were Kept in the Dark

In interviews, five former board members or staff members of the 527 groups said that their spending patterns were hard to understand — even from the inside.

Mr. Meyer, the former president of the American Police Officers Alliance, said that after learning about his group’s spending patterns he sought to bring about a change. “If we’re going to run this thing, we’re going to run it legit,” he said, describing his feeling at the time. “We’re not going to run it as a half-assed grift.”

But he said he was removed from the board in 2021.

Matthew Gutmann, a friend of Mr. Meyer’s, said Mr. Maichle had recruited him to be treasurer of the American Veterans Honor Fund.

“I was never in a board meeting. Not one bleeping second,” Mr. Gutmann, who was treasurer from 2017 to 2020, said. “I was excluded from virtually everything, other than signing other documents, which I was given the impression were on the up-and-up.”

Mr. Gutmann said he eventually learned how the group spent its money, and also concluded that Mr. Connors was actually in control. He said he, too, was ousted after raising questions.

Now, he said, he warns people to avoid phone solicitations. “I tell my folks, ‘Do not donate over the phone,’” he said.

In statements, the American Police Officers Alliance and the American Veterans Honor Fund said that Mr. Meyer and Mr. Gutmann had been removed for policy violations, including for making “false statements to outside third parties that consultants run the organization.”

The groups continue to raise money. Mr. Foss, of the firm Nomorobo, said his lines have recorded hundreds of calls this year alone. “Frank Wallace” is back with new dad jokes, and another plea for money.

How much?

“Whatever you think is fair for our heroes,” the voice on the phone says.

“I hope you’re staying out of trouble over there. I’m only kidding. This is Frank Wallace calling for the American Police Officers Alliance. Now all we ask is that when you receive your card in the mail, just help out with whatever you think is fair for our heroes.”

www.nytimes.com

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