Questions over Dark Money Ties, Ernst  12/06 06:23

   WASHINGTON (AP) -- An outside group founded by top political aides to Sen. 
Joni Ernst has worked closely with the Iowa Republican to raise money and boost 
her reelection prospects, a degree of overlap that potentially violates the 
law, documents obtained by The Associated Press show. 

   Iowa Values, a political nonprofit that is supposed to be run independently, 
was co-founded in 2017 by Ernst's longtime consultant, Jon Kohan. It shares a 
fundraiser, Claire Holloway Avella, with the Ernst campaign. And a condo owned 
by a former aide --- who was recently hired to lead the group --- was used as 
Iowa Values' address at a time when he worked for her. 

   Political nonprofits are often referred to as "dark money" groups because 
they can raise unlimited sums and are not required to reveal their donors. But 
they must take steps to keep their activities separate from the candidates they 
support. Additionally, while such tax-exempt groups can do political work, they 
can't make it their primary purpose. 

   The documents reviewed by the AP, including emails and a strategy memo, not 
only make clear that the group's aim is securing an Ernst win in 2020, but they 
also show Ernst and her campaign worked in close concert with Iowa Values. 

   Ernst is hardly the first politician to push campaign finance law 
boundaries. But the revelation could complicate her efforts to fend off a 
Democratic challenger in a closely watched race next year. 

   "The truth is, our campaign is completely separate and independent from any 
outside organization," Ernst senior adviser Brook Ramlet said in a statement. 
"Our campaign always has and always will act in full compliance with and in the 
spirit of the law. For the AP to suggest otherwise, is the definition of fake 
news."

   Campaign finance law states that candidates and their "agents" can't 
solicit, direct or spend contributions that exceed federal limits, even if the 
donations are made to an outside group. Those limits currently prevent donors 
from giving more than $2,800 to a candidate and $5,000 to a political action 
committee per election. 

   In July, Holloway Avella requested "an investment of $50,000" from a donor 
after Ernst made an introduction. She made clear in an email, which was 
obtained by the AP, how much a contribution of that size could help. 

   "As a follow up to our introduction by Senator Ernst, I am reaching out to 
you on behalf of Iowa Values," she wrote.

   "As you may have seen, an outside group on the left ... recently launched a 
six-figure ad buy in media markets across the state attacking Senator Ernst on 
her vote to repeal Obamacare," she continued. "The purpose of our group, Iowa 
Values, is to push back against these type of negative attacks." 

   Separately, a strategy memo states the group will use door-knocking, as well 
as TV, radio and digital advertising, to build a "firewall" that could be the 
difference "between winning and losing in 2020 for Senator Ernst." The group is 
targeting about 120,000 Iowans who "lean Republican on the issues" but abandon 
the party at times over "the tone of the GOP."

   Taken together, some legal experts say the documents offer proof that the 
effort violates the spirit of campaign finance and tax law, if not the letter 
of it. 

   "It seems like pretty strong evidence" that the $50,000 request was for an 
"illegal donation" while it's "clear that the goal of Iowa Values is to reelect 
Joni Ernst, which may violate its tax-exempt status," said Brendan Fischer, an 
attorney with the nonpartisan Campaign Legal Center in Washington.

   He also said the documents pulled back the curtain on how dark money works. 

   "This is a striking example of how secret campaign money operates," Fischer 
said. "The big donors that bankroll a dark money group like Iowa Values remain 
hidden from the public, but the politician that benefits knows where the money 
is coming from." 

   Still, it's far from certain that the Federal Election Commission, or the 
IRS, will find that they broke the law. 

   The FEC often gridlocks along partisan lines. And after a recent 
resignation, the panel doesn't have enough members to legally meet for 
conducting business. Similarly, the IRS has shown little appetite for cracking 
down on dark money groups that push the limits. 

   "There's a real disconnect between the principles behind the law and how 
they are enforced," said Larry Noble, a former general counsel to the FEC who 
served under both Republican and Democratic administrations. Noble said he 
would need more details before assessing whether Ernst's campaign broke the 
law. But, he added: "The bottom line is that this is really questionable." 

   Dan Petalas, a former FEC attorney, said that the "law is undecided" but 
that his personal view is the fundraising was permissible because Holloway 
Avella said she was requesting the $50,000 on behalf of Iowa Values, not the 
campaign.

   In a statement, Iowa Values executive director Derek Flowers said the 
organization has "systems and controls in place to make certain that it 
complies with all laws" and is "careful to follow all requirements that limit 
how much of its activities can be focused on supporting candidates."

   What's undeniable is the close connection between Ernst and the group. 

   Kohan, a former Ernst deputy chief of staff who is now a general consultant 
to her campaign, was paid $120,000 to serve as executive director of Iowa 
Values for two years, according to the group's tax filings. He left the group 
earlier this year. Jamestown Associates, where he is a named partner, also 
collected an additional $101,000 from Ernst's campaign in the years he served 
as executive director. 

   Holloway Avella raised about $520,000 for Iowa Values in 2017 and 2018, tax 
records show. The group lists her Arlington, Virginia, office as one of its 
business addresses and paid her about $60,000. Ernst paid her an additional 
$363,000 those years, record show. 

   The group listed a Waukee, Iowa, condo owned by Flowers as another business 
address in 2017, records show. Flowers was campaign manager during Ernst's 2014 
Senate primary. A company called Midland Strategies, which has been paid 
$145,000 by Ernst since 2013, also listed Flowers' condo as a business address. 
Flowers succeeded Kohan as the group's executive director this year.

   After Ernst launched her reelection campaign, Holloway Avella was deeply 
involved with both operations. 

   Holloway Avella's website lets prospective donors request to host a 
fundraiser for the senator. And invitations for several recent Ernst events 
list her as an organizer, including two held in September at Bistro Bis, a 
French eatery a few blocks from the U.S. Capitol. 

   Around the same time, Holloway Avella was seeking donations for Iowa Values 
from prominent Ernst supporters, like dieting entrepreneur Jenny Craig and San 
Francisco philanthropist Diane "Dede" Wilsey. Craig previously gave $30,000 to 
Ernst; Wilsey donated $46,000. 

   A legal compliance letter Holloway Avella sent to donors underscored the 
delicate terrain. 

   Iowa Values' mission "is to educate the public about common-sense solutions 
to various public policy issues of national importance," it stated. "It was not 
formed by any federal candidates or agents of candidates or at the direction or 
request of any candidates or an agent of a candidate."


(KR)