Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (38 page)

In Iowa, the American Future Fund began airing an ad created by Larry McCarthy that Geoff Garin, the Democratic pollster, described as perhaps “the most egregious of the year.” The ad accused the then congressman Bruce Braley, an Iowa Democrat and a lawyer, of supporting a proposed Islamic community center in lower Manhattan, which it misleadingly called a “mosque at Ground Zero.” As footage of the destroyed World Trade Center rolled, a narrator said, “For centuries, Muslims built mosques where they won military victories.” Now it said a mosque celebrating 9/11 was to be built on the very spot “where Islamic terrorists killed three thousand Americans”; it was, the narrator suggested, as if the Japanese were to build a triumphal monument at Pearl Harbor. The ad then accused Braley of supporting the mosque.

In fact, Braley had taken no position on the issue. No surprise for a congressman from Iowa. But an unidentified video cameraman had ambushed him at the Iowa State Fair and asked him about it.

Braley replied that he regarded the matter as a local zoning issue for New Yorkers to decide. Soon afterward, he says, the attack ad “
dropped on me like the house in ‘The Wizard of Oz.’ ” Braley, who won his seat by a margin of 30 percent in 2008, barely held on in 2010. The American Future Fund’s effort against Braley was the most expensive campaign that year by an independent group.

After the election, Braley accused McCarthy, the ad maker, of “profiting from Citizens United in the lowest way.” As for those who hired McCarthy, he said, they “are laughing all the way to the bank. It’s a good investment for them…They’re the winners. The losers are the American people, and the truth.”

In North Carolina, Congressman Bob Etheridge, a seven-term Democrat, fared worse. He was the target of ads made by McCarthy for another of Noble’s front groups, Americans for Job Security. That summer, Etheridge was walking on Capitol Hill when he too found himself the victim of a video ambush. Two young men in suits approached him. One thrust a video camera in his face while the other demanded to know, “Do you fully support the Obama agenda?” Taken aback, Etheridge asked, “Who are you?” When he got no answer, he asked again. Growing irate, he repeated the question five times, until finally he pushed the camera away and gripped his inquisitor.

“Please let go of my arm, Congressman,” the inquisitor pleaded as the camera kept recording.

“Who are you?” Etheridge repeated.

Finally, the interviewer stammered, “I’m just a student, sir.”

“From?” Etheridge asked.

“The Streets,” came the answer.

Within days, a video of the confrontation, edited to make Etheridge seem unhinged, was posted on the conservative Web site
Big Government
under the headline “Congressman Attacks Student.” It went viral. Soon afterward, McCarthy inserted the video into an attack ad titled “Who Are You?” in which people purporting to be from Etheridge’s district answered, “We’re your constituents,” and then accused Etheridge—inaccurately—of wanting to cut Medicare. As per Luntz’s instructions, Nancy Pelosi figured prominently in the ads as well. The spot that dealt the deathblow to Etheridge, finally, was one that accused him, like Braley, of supporting the “Ground Zero Mosque.”

The local television station WRAL-TV in Raleigh, which covered the campaign, noted that Americans for Job Security had spent $360,000 on media against Etheridge, but at the time no one was able to figure out who was behind the group.

After a seventeen-day recount, Etheridge lost in November in a stunning upset to a Tea Party sympathizer, Renee Ellmers, who was a nurse running with the support of Sarah Palin. The next day, the National Republican Congressional Committee (NRCC), which had previously denied any role, acknowledged that it had been behind the ambush video. How the video made its way into the “independent” ad was never revealed, but the NRCC, too, was one of McCarthy’s clients.

It was not a coincidence that Braley, Etheridge, Perriello, and other Democrats were all ambushed that year by unidentified videographers.
In 2010, Americans for Prosperity and several other conservative groups encouraged members to provoke Democratic candidates into on-camera outbursts. Some gave instructions on how to do it. In time, the practice spread to liberal groups too. The Internet had exponentially increased the power of viral videos, particularly those capturing compromising behavior.

Aiding the effort, several of the wealthiest members of the Koch network launched media ventures during this period, widening the exposure for partisan attacks. Foster Friess, the Wyoming mutual fund magnate, for instance, committed to spend $3 million to found
The Daily Caller
in 2010 after a single luncheon conversation about it with Tucker Carlson, its prospective editor in chief. The online news venture described itself as a conservative version of
The Huffington Post
. In fact, it functioned more as an outlet for opposition research paid for by the donor class. Charles Koch’s foundation would later also back the news site. (After
The New Yorker
published my investigative article on the Kochs, “Covert Operations,” that August,
The Daily Caller
was the chosen receptacle for the retaliatory opposition research on me, although, after it proved false, the Web site decided not to run it.)

Only in 2011 did it surface that in New York, at least, the “Ground Zero mosque” controversy had been stirred up for political gain in part by money from Robert Mercer, the co-CEO of the $15 billion Long Island hedge fund Renaissance Technologies. To aid a conservative candidate in New York, Mercer gave $1 million to help pay for ads attacking supporters of the “Ground Zero mosque.” A former computer programmer who had a reputation as a brilliant mathematician and an eccentric loner, Mercer was a relative newcomer to the Koch summits. But he was immediately impressed by the organization. He had long held the government in low regard and shared the Kochs’ antipathy toward government regulations. In addition to fanning flames around the “mosque” issue, in 2010 Mercer reportedly gave over $300,000 to a super PAC trying to defeat a Democratic congressman from Oregon, Pete DeFazio, who had proposed taxing stock trades. Renaissance, a so-called quant fund, traded stocks in accordance with computer algorithms at enormously high frequencies and volumes, so the proposed tax would have bitten into the firm’s legendary profits. Someone familiar with Mercer’s thinking maintained that the proposed tax on stock trades was not behind his involvement in the race; rather, Mercer shared deep skepticism about global warming with the Republican candidate, Arthur Robinson. Instead of openly debating these issues, though, Mercer, who declined to speak about his motivations, paid for ads that manipulated voters’ fears about terrorism and Medicare.

As the congressional races grew nasty, Gillespie’s Republican State Leadership Committee began to channel dark money into one local state legislature race after another. There were furtive, well-coordinated projects to take over the statehouses in Wisconsin, Michigan, Ohio, and elsewhere. North Carolina in particular was living up to its promise as a perfect testing ground for the REDMAP strategy. Art Pope’s outsized role there, meanwhile, was also providing an instructive demonstration of how much influence one extraordinarily wealthy activist could have over a single state in the post–
Citizens United
era.

Many of the details remained shrouded from public view. But that fall, in the remote western corner of North Carolina, John Snow, a retired Democratic judge who had represented the district in the state senate for three terms, found himself subjected to one political attack after another. Snow, who often voted with the Republicans, was considered one of the most conservative Democrats in the general assembly, and his record reflected the views of his constituents. His Republican opponent, Jim Davis—an orthodontist loosely allied with the Tea Party—had minimal political experience, and Snow, a former college football star, was expected to be reelected easily. Yet somehow Davis seemed to have almost unlimited money with which to assail Snow.

Snow recalls, “
I voted to help build a pier with an aquarium on the coast, as did every other member of the North Carolina House and Senate who voted.” But a television attack ad presented the “luxury pier” as Snow’s wasteful scheme. “We’ve lost jobs,” an actress said in the ad. “John Snow’s solution for our economy? ‘Go fish!’ ” A mass mailing, decorated with a cartoon pig, denounced the pier as one of Snow’s “pork projects.”

In all, Snow says, he was the target of two dozen mass mailings, one of them reminiscent of the Willie Horton ad. It featured a photograph of a menacing-looking African-American convict who, it said, “thanks to arrogant state senator John Snow,” could “soon be let off death row.” Snow, in fact, supported the death penalty and had prosecuted murder cases. But in 2009, Snow had helped pass a new state law, the Racial Justice Act, that enabled judges to reconsider a death sentence if a convict could prove that the jury’s verdict had been tainted by racism. The law was an attempt to address the overwhelming racial disparity in capital sentences.

“The attacks just went on and on,” Snow later recalled. “My opponents used fear tactics. I’m a moderate, but they tried to make me look liberal.” On election night, he lost by an agonizingly slim margin—fewer than two hundred votes.

After the election, the North Carolina Free Enterprise Foundation, a nonpartisan, pro-business organization, revealed that two seemingly independent outside political groups had spent several hundred thousand dollars on ads against Snow—a huge amount for a local race in a poor, backwoods district.
Pope was instrumental in funding both groups, Civitas Action and Real Jobs NC. In fact, Pope gave $200,000 in seed money in 2010 to start Real Jobs NC, which was responsible for the “Go fish!” ad and the mass mailing that attacked Snow’s “pork projects.”

Real Jobs NC was also the recipient of a whopping $1.25 million from Ed Gillespie’s Republican State Leadership Committee. But as the investigative news outfit ProPublica explained, Gillespie’s group distributed its contributions in a way designed to hide its involvement from voters. Instead of putting its own name on the ads, it created new, local-sounding nonprofit groups that lacked the word “Republican.” As a social welfare organization, it claimed to be nonpolitical, yet its funds were used to attack twenty different Democrats around the state and no Republicans.

Bob Phillips, the head of the North Carolina chapter of Common Cause, an organization that promotes stricter controls on political money, watched the unfolding drama closely and concluded that the
Citizens United
decision was an even bigger “game changer” at the local level than at the national. He said it enabled a single donor, particularly one with access to major corporate funds like Pope or the Kochs, to play a significant and even decisive role. “
We didn’t have that before 2010,” Phillips says. “
Citizens United
opened up the door. Now a candidate can literally be outspent by independent groups. We saw it in North Carolina, and a lot of the money was traced back to Art Pope.”

In fact, misleading attack ads sponsored by the same unknown outside groups popped up in local races all over the state. In Fayetteville, Margaret Dickson, a sixty-one-year-old pro-business Democrat who was seeking reelection to the North Carolina state senate, was depicted as a clone of Nancy Pelosi, even though her record was considerably more conservative. Another ad, funded by her opponent, made her look like “a hooker,” she said, showing a doppelgänger applying lipstick and taking piles of greenbacks and suggesting she was prostituting her state job for money. Pope later said he was appalled by the ad, but Americans for Prosperity, on whose board he sat, promoted her opponent. “
Those ads hurt me,” she said later. “I’ve been through this four times before, but the tone of this campaign was much uglier, and much more personal, than anything I’ve seen.” On election night, Dickson fell about a thousand votes short of victory in her district, which has a population of more than 150,000.

Chris Heagarty, a Democratic lawyer who ran for a legislative seat that fall in Raleigh, had previously directed an election-reform group and was not naive about political money. Yet even he was caught off guard by the intensity of the effort marshaled against him. Real Jobs NC and Civitas Action spent some $70,000 on ads portraying him as fiscally profligate, while Americans for Prosperity spent heavily on behalf of his opponent. One ad accused him of having voted “to raise taxes over a billion dollars,” even though he had not yet served in the legislature. He said, “
If you put all of the Pope groups together, they and the North Carolina GOP spent more to defeat me than the guy who actually won.” He fell silent, then added, “For an individual to have so much power is frightening. The government of North Carolina is for sale.”

Pope, who regarded himself as an underdog in a historically Democratic state and an honest reformer, took umbrage at such talk. “
People throw around terms like ‘so-and-so tried to buy the election,’ ” he said in an interview. But in his view, that evoked bribery, and “that’s illegal, corrupt, and something I’ve fought hard against in North Carolina.” He said the money he spent simply helped “educate” citizens so that they could “make informed decisions. It’s the core of the First Amendment!” Asked whether those with more cash might drown out less wealthy voices, he said, “I really have more faith in North Carolina voters than that.” Martin Nesbitt Jr., the Democratic leader in the North Carolina Senate, wasn’t convinced. Of Pope’s 2010 spending, he said, “It wasn’t an education; it was an onslaught. What he’s doing is buying elections.”

Other critics accused Pope of using tax-deductible philanthropic pursuits to promote aggressively pro-business, antitax policies that helped his company. Scholars who worked at a think tank funded by his family foundations, for instance, opposed any raise in the minimum wage, and in fact any minimum wage laws at all. At the same time, many employees at Pope’s discount stores were paid the minimum wage. “I am careful to comply with the law,” Pope argued, “and I keep my personal activities separate from my philanthropic, public-policy, grassroots and independent expenditure efforts.”