Conservative dark money group American Action Network reveals spending blitz to support Trump's tax cut law

Key Points
  • Dark money group American Action Network went on a massive media spending spree in an effort to get the tax reform bill passed.
  • AAN more than tripled its media spending bill from July 2017 through June 2018 in contrast to the prior year.
  • Part of the $51 million in contributions and grants it received came off the back of a mysterious unnamed donor who gave a $16 million check. 501(c)(4)s are legally not required to disclose their donors.
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Conservative nonprofit dark money group American Action Network dramatically increased its media spending during the tax reform debate of 2017 and the buildup to the 2018 congressional midterm elections, according to a tax filing provided to CNBC.

American Action Network, a group closely aligned to former House Speaker Paul Ryan, more than tripled its media spending bill from July 2017 through June 2018 compared with the prior 12-month period. The tax form, which was filed to the Internal Revenue Service this month, shows the 501(c)(4) spent more than $27 million on media advocacy, with most of its payments going to Mentzer Media Services ($14 million) and Strategic Media Services ($10 million).

Both firms are known to do media consulting for Republican causes. During the 2018 cycle, Mentzer Media, led by longtime media consultant Bruce Mentzer, received a $5 million payment from Georgia Sen. Johnny Isakson's reelection campaign and almost $4 million from the Senate Leadership Fund, a super PAC run by allies of Senate Majority Leader Mitch McConnell.

In the prior year, American Action Network only spent just over $8 million on its media efforts. The filing also shows the group gave a $15.8 million grant to its sister super PAC, the Congressional Leadership Fund.

A big chunk of the $51 million in contributions and grants the group received came from a mysterious unnamed donor who gave $16 million. 501(c)(4)s are not legally required to disclose their donors.

The tax return also describes the organization's efforts during the spending blitz.

"American Action Network conducted extensive issue advocacy and grassroots mobilization, including television advertising, direct mail, automated phone calls," the document says, and explains it was advocating for reforming the tax code, impacting the health-care system and pushing for removing business regulations.

The effort by American Action Network and other conservative groups to push tax reform had mixed results. On one hand, President Donald Trump signed the sweeping reform measure into law in December 2017 after a lengthy negotiation and voting process in the Republican-controlled Congress.

However, the AAN campaign to "applaud members of Congress for fighting for middle-class tax cuts and a simpler, fairer tax code" didn't make a difference for some Republicans seeking reelection. Democrats won the House in November 2018.

Of the 49 GOP-held House districts that were targeted by AAN through radio ads in November 2017, almost half of them lost their respective races. They continued to promote the accomplishment of passing tax reform throughout 2018 after the bill was passed. A year after their multimillion-dollar ad buys, Republicans lost 40 seats in the House while gaining two seats in the Senate.

AAN has never publicly disclosed who funds its operation but its tax filings and a report by the nonpartisan organization Issue One gives clues as to how it goes about raking in the cash.

The tax document shows that the nonprofit often uses a firm called LPC 25 to help raise funds.

Its new filing mentions that the California-based business helped bring in millions through mail, internet, phone and in-person solicitations. LPC 25 is run by Mason Fink and is located at the same business address as Rep. Harley Rouda's, D-Calif., 2018 campaign headquarters, California business records show. Fink is also a board member of the Congressional Leadership Fund.

An Issue One investigation identified 23 donors that represent only 13% of its funding from 2009 to 2017, including $12 million from the Pharmaceutical Research and Manufacturers of America, $4 million from the Republican Jewish Coalition and $3.3 million from health insurer Aetna.

A list of AAN donors constructed by MapLight, a nonpartisan research organization that tracks the influence of money in politics, shows that in 2017 the Business Roundtable gave $6 million and the Retail Industry Leaders Association contributed $800,000.

Correction: Rep. Harley Rouda is a California Democrat. An earlier version misstated his party affiliation.

American Action Network 990 2017-2018