Top Dem Operative David Brock Accused of Illegally Profiting From His Political Empire By Conservative Group

A conservative group has registered grievances with the IRS accusing contributing liberal organizer David Brock of illegally profiting from the gigantic network of groups he has built within the Democratic Party’s infrastructure.

The accusations, which were filed by the Patriots Foundation, a right-leaning nonprofit, and reviewed by The Daily Beast, detail a series of events that, the working group says, display the insertion of money from a tax-exempt group Brock founded into a private, for-profit news business that he owns.

” These objections we entered accommodate damning allegation of serious allegations about how “the organizations activities” have circumvented rules and manipulated the tax-exempt status of the organizations for personal benefit and backer political intents, and potentially siphoning millions for unwarranted purposes ,” Patriots Foundation co-founder Craig Robinson told The Daily Beast in a statement.

The nonprofit at issue is the American Bridge 21 st Century Foundation, and it’s part of a constellation of entities that Brock has seeded over the years and which he duty in early 2017 to, in his commands, “kick Donald Trump’s ass.” The foundation is the” light fund” affiliate of AB PAC, a super PAC that is pouring millions of dollars into an effort to defeat Trump in November.

Brock’s system also includes a for-profit news venture called the American Independent. That channel is owned by a company he organized in late 2015 announced True Blue Media LLC. When Brock convened donors at a retreat in early 2017 to brief them on his anti-Trump exertions going forward, he statute True Blue Media’s news operation explicitly as a revenue-generating enterprise that would sell announce and subscriptions.

Over the next two years, American Bridge’s nonprofit arm given more than $ 2.6 million in True Blue Media, according to tax filings. Those filings register Brock’s possession stake in the LLC as greater than 35 percent. The organize seemed to have resembled a convertible memorandum; in return for that cash infusion, American Bridge was promised future equity in the media company. It’s not clear if that equity was ever provided.

The Patriots Foundation alleges that those transactions moved afoul of Internal Revenue Service regulations prohibiting the purpose of applying a nonprofit’s funds( in this case, American Bridge’s) to financially benefit those who run it.” We’re call on the IRS to conduct a thorough investigation of Brock’s organizations and to hold them accountable for all violations ,” Robinson said.

American Bridge president Bradley Beychok told The Daily Beast in an emailed statement that the transaction was a legitimate arms-length investment in line with the group’s tax-exempt activity.

” The investment in True Blue Media, LLC was determined by the Independent Board of Directors to further the mission of AB Foundation ,” Beychok wrote. He dismissed the Patriots Foundation complaint as” time another in a long string of lies and false accusations” created in order to” purposely mislead the public in order to further its right wing agenda .”

” To remove any potential conflict in the best interests, David Brock resigned as an officer and a member of the board of directors[ of American Bridge] in 2016, before the first investment was established ,” Beychok wrote.” In the interest of transparency, the investments were listed on IRS form 990 as both a grant on Schedule I and on Schedule L. AB Foundation received an industry-standard investment agreement and in turn owns broth in True Blue Media .”

Brock’s official persona hasn’t always been as clear as that statement suggests. Really, American Bridge’s nonprofit weapon referred to Brock as its chairman in 2018. Brock continues to describe himself as the chairman of American Bridge’s super PAC arm.

Brock, who is the founder of Media Matters and a high-profile liberal activist, has had a colorful profession starting as a republican journalist where he garnered national courtesy when he challenged the claims of Anita Hill–parlaying that into a diary, The Real Anita Hill , in which his depiction of Hill as” a bit nutty and a bit slutty” was widely paraphrased. He went on to write another book–this one about Hillary Clinton–before abandoning conservatism perfectly, as detailed in a precede journal: Blinded by the Right: The Conscience of an Ex-Conservative . Brock has since been incredibly active in efforts to both prop up the Clintons and, from there, apply his vast resources to try and defeat Trump.

The accusations registered this week underscore the often murky relationships between the various nodes in Brock’s network of advocacy attires. American Bridge’s super PAC and dark money forearms, for instance, share executives, hires, and part cavity, are consistent with examined financial statements for the latter.

That’s fairly common for advocacy radicals with political and nonprofit appendages, but best rehearsals generally call for a clear delineation of how shared resources are divided up among those groups, so as not to commingle tax-exempt resources with those devoted to outright politicking. Harmonizing to its most recent publicly-available financial statements, considering 2018,” the Foundation and American Bridge did not have a formal agreement relating to the allocation of overheads between the two entities .” A generator familiar with the arrangement told The Daily Beast that a more formal agreement to that result was put in place last year.

While such arrangements are common among various forms of nonprofit radicals such as donations, dark coin advocacy groups, and political action committees, they can be even more legally ticklish when for-profit entities are added to the mix.

True Blue Media is just such an entity. In late 2015, it acquired an 80 percent stake in the website Blue Nation Review, which was subsequently renamed Shareblue. Late last year it changed its refer again to The American Independent.

The outlet has been determined since the beginning of the Trump era not just to advance Brock’s political advocacy struggles, but likewise to generate financial returns.

“Impact and monetization are not mutually exclusive at Shareblue, ” proclaimed briefing substances circulated to sponsors at Brock’s early 2017 withdraw. “In the second half of 2017 we will move the focus to monetization with the goals and targets of bringing in revenue in Q2 of 2018 .”

Those briefing cloths spelled out a emcee of ways that the company would look to bring in revenue, including rental out email rosters, offering push and patronized material, selling merchandise, and even generate a “Twitter-like” website available only to paying subscribers.

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