Wellspring's Flow: Dark Money Outfit Helped Fuel Groups on Political Front Lines

by Viveca Novak, Robert Maguire and Peter Overby on November 5, 2013 5:15 AM      

The third part of a package produced in collaboration with NPR. Part I is available here, and Part II is here.

For people who guard their privacy closely, Ann and Neil Corkery are key players in some very public enterprises. 

The many groups they are or have been involved with -- as board members or officers -- include the Catholic League, an aggressive defender of the church against what it sees as "slanderous assaults;" the National Organization for Marriage, which has fiercely fought official recognition of gay marriage; and the Judicial Crisis Network, which opposes what it sees as "activist" judges and has waded into the abortion battle.

Less publicly, Ann, 52, has run a politically active dark money group, the Wellspring Committee -- a 501(c)(4) nonprofit that isn't required to disclose its donors. Neil, 54, is connected to another, much smaller dark money group, The Annual Fund, which received all of its start-up funding from Wellspring. Neither group conducts any activities on its own, but together they have helped fund many more visible, highly political nonprofits that spent tens of millions of dollars on ads benefiting Republican causes and candidates in the 2010 and 2012 elections. 

From 2008 through 2011, Wellspring and the Annual Fund gave out more than $17 million in grants to other groups, according to tax filings the groups submitted to the IRS. (neither group's 2012 tax form is yet available.) And the impact of their contributions is amplified by the fact that they are part of a network of conservative tax-exempt groups that do little but transfer money, via grants, to other groups closer to the political front lines. Among them are the Center to Protect Patient Rights (CPPR) and TC4 Trust, which have given to many of the same grantees as the Corkerys' outfits. 

Groups that received money from Wellspring and the Annual Fund  -- like Americans for Prosperity and Americans for Job Security -- spent about $60 million in the 2010 federal elections and more than double that in the 2012 cycle, according to reports they filed with the Federal Election Commission. 

The amount of money that 501(c)(4) and (c)(6) groups have spent on federal elections has nearly tripled since 2008, FEC filings show, going from $110 million in 2008 to more than $311 million in 2012. While some of the surge was due to earlier legal developments, much of it was spurred by the 2010 Supreme Court decision Citizens United v. FEC, which freed corporations -- including nonprofits -- to spend unlimited sums on elections as long as they don't coordinate their efforts with a candidate's campaign. 

The Corkerys would not agree to multiple requests for an interview. "I'm very much concerned about my privacy," Neil Corkery told NPR and the Center for Responsive Politics, which jointly produced this package of stories.

Sharing the wealth

If we could have talked to the mysterious couple, we'd have asked, among other things, how they decide which groups get funding from the two nonprofits. Some Wellspring and Annual Fund grantees focus on issues the Corkerys seem personally invested in, such as the National Right to Life Committee, which received $542,000, and Susan B. Anthony List, the recipient of more than $753,000; Wellspring cut checks to both groups in 2008. 

Other recipients, such as American Action Network, Americans for Job Security (AJS) and Americans for Prosperity, are notably active in the political ad wars. AJS, for example, which received a combined total of nearly $3 million from Wellspring in 2008 and 2010, spent at least $8.3 million on ads mentioning federal candidates in 2010, and nearly $16 million in 2012. AJS was also involved in a scheme last year that funneled $11 million into efforts to curb the political power of labor unions and prevent a tax increase. California’s campaign finance agency called it political "money laundering" and last month levied $1 million in fines in the case.

And still other Wellspring recipients train their sights on the judicial branch. The Judicial Crisis Network (JCN) -- originally called Judicial Confirmation Network -- was started in 2004 to help build support for former President George W. Bush's federal court nominees. Now it works against Obama's judicial picks -- and Obama himself. According to Federal Election Commission records, JCN spent $571,000 in 2008 opposing Obama's election. JCN also runs ads benefiting conservative state court candidates. According to the Michigan Campaign Finance Network, the group spent more than $1 million airing ads against a Democratic state supreme court candidate in Michigan last year; its target, Bridget Mary McCormack, won despite that. It also spent $1 million on a lower court race – believed to be the first time dark money has been used in a trial court contest. 

As it happens, Neil Corkery is treasurer of JCN. Wellspring, run by his wife, gave the group and its affiliate, the Judicial Education Project, a total of more than $700,000 over a two-year period encompassing 2010 and 2011.  

In 2010 Wellspring gave $125,000 each to the Michigan-based American Justice Partnership (AJP) and the Michigan Chamber of Commerce, which shares AJP's goal of putting more conservatives on the bench.

That year, AJP gave more than $1 million to the Michigan Republican Party. And the Michigan Chamber gave $5.4 million to the Republican Governors Association -- about the same amount that the RGA subsequently routed to the Michigan GOP. The state GOP spent about $4.8 million on in Michigan's supreme court race that year, according to the independent Michigan Campaign Finance Network, which did a detailed review of public records.

Got that? Not if the groups involved can help it. The upshot, though, is that two of Wellspring's recipients invested in the contest -- which ultimately restored a conservative majority to the highest court in the state. 

In addition, over the course of three years, Wellspring has given nearly $1 million to Missourians for Better Courts. That group has fought to change Missouri's judicial selection process, which it argues is overly influenced by liberal trial lawyers. 

Putting, or keeping, conservatives on the nation’s courts was the focus of several other Wellspring grantees, including the Alabama Civil Justice Reform Committee, Alabama Voters Against Lawsuit Abuse, Wisconsin Manufacturers & Commerce and the Illinois Manufacturers Association.

Cash in, cash out

On the other side of the ledger sheet, though, the sources of Wellspring's millions are mostly a cipher. Like all 501(c)(4) organizations, it doesn't have to reveal them. CRP and NPR have been able to learn of only three donors, all of which are also (c)(4)s: The American Democracy Alliance gave Wellspring $150,000 in 2008, the year the Corkery group launched. A second, Founding Principles PAC gave it $1,026, also in 2008. And Rosebush Corp. gave Wellspring $100,000 in 2011. 

That's a little more than $251,000 -- roughly 1 percent of the $24 million Wellspring has reported as income from 2008 through 2011. None of the three donor groups returned calls from NPR and CRP seeking comment.

The American Democracy Alliance, like Wellspring, has taken an interest in judicial elections: In 2010, it gave $100,000 to ShowMe Better Courts, a Missouri group; and $500,000 to the Adam Smith Foundation -- which, in turn sent money to Missourians for Better Courts, the same group that received nearly $1 million from Wellspring. 

Rosebush Corp., headed by a Pennsylvanian named Brian Sullivan, also gave $750,000 in 2011 to Americans for Limited Government, a group headed by wealthy libertarian Howard Rich that has spent millions running ads against Democrats and giving to other conservative organizations. The next year, Rosebush gave to Club for Growth Action, which has helped fuel the rise of some tea party Republicans, and to the pro-Mitt Romney super PAC, Restore Our Future. 

Founding Principles PAC is a tiny political action committee, inactive since early 2010, funded largely with donations from Ann Corkery's former boss at Security National Servicing Corp., Robin Arkley, and his wife. 

Why would someone give money to outfits like Wellspring, which are little more than UPS mailboxes? For donors especially concerned with protecting their anonymity, the bounce pass -- writing a check to a non-disclosing group that'll turn around and give the funds to another non-disclosing group -- can seem attractive. IRS rules prevent the public disclosure of donors to a group like, say, the Faith and Freedom Coalition -- which spent $216,441 on ads in the 2010 election, and $570,744 in 2012, FEC reports show. But why not layer in more protection? That way, if a group is ever forced to say where its money came from -- and there are lawsuits, pending legislation and an array of state attorneys general trying to make that happen -- it will only have to cite the name of other, similarly protected groups. Like Wellspring -- which, as it happens, has given $250,000 to Faith and Freedom.

“Obviously donors could simply give money to the organizations they wanted to give to,” said law professor Donald Tobin of Ohio State University’s Moritz School of Law. “The idea of bundling it into a 501(c)(4) and then using that (c)(4) as a way to distribute money [to] other organizations is new, and I think is generally designed to help cleanse money through the system.”

As political activity by 501(c)(4) social welfare organizations and 501(c)(6) trade groups has increased, so have questions about whether they’re following the law. The IRS, which oversees them, says that such organizations can spend up to 49 percent of their resources on politics. What constitutes “politics” isn’t always clear. But the definition of “social welfare,” which is supposed to be the major purpose of (c)(4)s, is also problematic. Organizations like Wellspring consider their grants to other nonprofits to be social welfare, even when those groups are deeply involved in politics. 

“The group is a conduit,” said Tobin. “The web of transactions…makes you question whether [Wellspring] is really engaged in a social welfare purpose or not.” 

Wellspring’s lawyer is Washington, DC, campaign finance attorney Cleta Mitchell. She says Tobin might be “a lefty loony law professor,” and says it’s sometimes better to have one group to do fundraising and another to carry out programs.

Mitchell says, “It’s good for both. The fundraising and grant-making c4 doesn’t have to actually engage in the program operations, and the operating c4 doesn’t have to do a lot of separate fundraising.” 

But the IRS has been silent on the matter, and the fact that money is fungible and usually can’t be followed through to a particular expenditure only muddies the waters.

Conservative groups have made far greater use of political nonprofits than liberal ones,. In the last election cycle, 28 social welfare groups spent more than $1 million each on political advertising, as reported to the FEC. Twenty of those were conservative groups, spending a total of $204 million. Seven were liberal organizations, spending a combined $33 million, and one was independent. In addition, available evidence indicates that the conservative groups are more interconnected, churning money among members of the network.

Corkery connections

Ann Corkery started Wellspring in 2008, the year she was also a co-chair of the National Women for Mitt Finance Committee. She had been involved in politics at least since 2000, when she and her husband helped the RNC with outreach to Catholics. In 2003, she was appointed by President Bush to be a delegate to the United Nations General Assembly, where she fought for a ban on human cloning; he also made her a delegate to the UN Commission on the Status of Women. 

She seems to have come to politics at least in part through her religion. Corkery has been a member of an ultraorthodox subset of Roman Catholicism. According to an interview she gave in 1990, she was introduced to Opus Dei by Neil; he was a member but later dropped out, while she remained. 

Her involvement with the Catholic League for Religious and Civil Rights, dates back a number of years. In the words of the League’s famously pugnacious leader, Bill Donohue, the group specializes in "public embarrassment of public figures who have earned our wrath."  Corkery was on the board of directors as of 2012, though her name no longer appears on the list. 

She's also on the board of the Becket Fund for Religious Liberty, a conservative legal group whose activities have included fighting to keep the words "under God" in the pledge of allegiance, and against insurance coverage of contraception under the Affordable Care Act. Her bio, unlike those of her fellow directors, was removed from Becket's website after CRP and NPR began trying to reach her, although her name remains. In 2008, she presented Becket's annual award for "courage in defense of religious liberty" to Mitt and Ann Romney.

The Corkerys also have made forays into popular culture. Ann works with Friends of Abe, a group of Hollywood conservatives who deplore the liberal predilections of many in their industry. She's even been associate producer of a feature film, An American Carol, a comedy that mocks liberal director Michael Moore. 

Meanwhile husband Neil is CFO of Wedgwood Circle, a collection of investors and artists that pursues "redemptive cultural content" and seeks projects "that are injecting truth, beauty, and goodness into the art and entertainment industries," according to its website. The Wedgwood Circle website says Neil "runs a financial consulting firm specializing in assisting nonprofit organizations." 

Neil has also been treasurer of the National Organization for Marriage since it was founded in 2007. NOM's initial goal was to see that California’s Proposition 8, barring same-sex marriage, was passed – which it was, though it was knocked down by the Supreme Court in early 2013. The group has pushed similar ballot measures in other states and been active in legislative and judicial elections. Last month, NOM President Brian Brown called New Jersey Gov. Chris Christie (R) “a man who lacks the courage of his supposed convictions” after Christie dropped his appeal of a state court’s ruling to allow the marriage of same-sex couples.

Among the many other groups he’s involved with, Neil is also executive director of the Bishop Gassis Sudan Relief Fund, which says it is “bringing the gospel of Christ, and providing food,shelter and medical care to the men, women and children of South Sudan.”

And Neil Corkery is listed as the keeper of records for The Annual Fund, the 501(c)(4) that was launched with $2.4 million in 2010 -- from Wellspring. One surprising contributor since then: the Pharmaceutical Researchers and Manufacturers Association, which gave The Annual Fund $400,000 in 2011. The fund's six grantees include three that Wellspring also helped fund, and one that got money from PhRMA.

The Koch network overlap

Any discussion of dark money pass-through groups usually comes around to a mention of the Koch brothers.

However mysterious the source of the Corkery groups’ funds, there are a number of overlaps between their grantees and those of certain other,similar pass-through organizations. That's particularly true in the case of the Center to Protect Patient Rights, which is run by Sean Noble, a political consultant and operative connected to billionaire industrialists and conservative funders David and Charles Koch. 

Americans for Job Security, for instance -- a 501(c)(6) business association -- has received nearly $3 million from Wellspring; CPPR has given it more than $4.8 million. Similarly, both Wellspring and CPPR have helped fund a social welfare group spearheaded by the Kochs, Americans for Prosperity; they've given $2.7 million and $4.3 million respectively. 

In total, 10 recipients of Wellspring and/or Annual Fund grants also received money from CPPR from 2008 through 2011. Those include the American Future Fund and Independent Women's Voice, which is headed by another figure in the Koch orbit. Wellspring also uses a consulting firm with ties to the Kochs: The group's largest outside vendor in 2010 was Cove Strategies, where two of the four principals are former Koch Industries employees. 

Last year, Ann Corkery's name showed up on the list of partners at the Washington law firm Stein, Mitchell, Muse & Cipollone. According to the firm’s website, she is an "expert communication strategist" who has "provided strategic counsel to a number of national and state political candidates." 

She has also, the website says, had "great success in devising and executing signature reputation campaigns for national political leaders and organizations."

Considering how skillfully the Corkerys have flown under the radar, they might celebrate the success of their own "reputation campaign." 

They would probably do so quietly.

The third part of a package produced in collaboration with NPR. Part I is available here, and Part II is here.

Reprinted with permission from OpenSecrets.