Who's Your Daddy?
Fred C. Koch, Herman Cain's Daddy?
Herman Cain and Mitt Romney both addressed the Americans For Prosperity ("AFP") Annual Summit today in Washington, D.C. AFP is the political advocacy group that was founded and principally funded by Charles and David Koch and various foundations they control. It funded and helped organize Tea Party organizations around the country in preparation for the 2010 elections.
The Atlantic reported that the reception for Romney was muted, but that the crowd gave a rousing welcome to Herman Cain as he came to the podium to his campaign song, "I am America," the Tea Party anthem.
In addition to his standard stump speech, Cain offered "breaking news" to the journalists in the crowd that was met by a huge roar of support from the summit attendees (and a spirited jig by David Koch, who leaped from his front row seat):
Cain and his campaign manager, Wisconsinite Mark Block, have long-standing ties to the Koch Brothers, so it's probably a smart move for Cain to acknowledge the ties through his joke.
Americans for Prosperity first recruited Herman Cain in 2005, to lead AFP's "Prosperity Expansion Project," an effort to expand the number of AFP
But now the more interesting issue arising from the ties between the Koch Brothers and Cain grows out of some excellent investigative reporting by The Milwaukee Journal Sentinel's Daniel Bice, for his "No Quarter" column at JSOnline. Bice obtained financial records of a Wisconsin charitable organization run by Block and Cain's deputy Chief of Staff, Linda Hanson, that seems to clearly show illegal funneling of financial support from the charity to the Cain campaign. As Bice reported on-line back on October 30th:
Herman Cain's two top campaign aides ran a private Wisconsin-based corporation that helped the GOP presidential candidate get his fledgling campaign off the ground by originally footing the bill for tens of thousands of dollars in expenses for such items as iPads, chartered flights and travel to Iowa and Las Vegas - something that might breach federal tax and campaign law, according to sources and documents.
It is not known if Cain's election fund eventually paid back Prosperity USA, which now appears defunct. The candidate's federal election filings make no mention of the debt, and the figures in the documents don't match payments made by the candidate's campaign.
In addition to picking up these expenses at least initially, Prosperity USA also paid as much as $100,000 to the Congress of Racial Equality, a conservative black organization, shortly before Cain was a featured speaker at the group's annual Martin Luther King Jr. dinner in mid-January.
For decades, Block worked behind the scenes for several conservative candidates and causes in Wisconsin. He is best known in the state for his role as campaign manager for former state Supreme Court Justice Jon Wilcox in 1997. Accused of election law violations, Block settled the case by agreeing to pay a $15,000 fine and to stay out of Wisconsin politics for three years.
More recently, Block, 57, ran the state chapter of Americans for Prosperity, a nonprofit cofounded by the conservative Koch brothers that helped organize the tea party movement in Wisconsin and elsewhere.
It was through Americans for Prosperity that Block met Cain and encouraged him to run for national office. Block's role with the Cain campaign became a point of national interest in the past week when a bizarre online campaign ad featuring the chain-smoking Wisconsin operative went viral.
In recent years, Block spun off a handful of organizations from Americans for Prosperity, most of them incorporating "prosperity" in the name. Officials with Americans for Prosperity emphasize that these other groups were legally separate from their organization.
The largest group founded by Block was called Wisconsin Prosperity Network, which was supposed to be an umbrella organization that would spend more than $6 million a year underwriting a dozen or so other conservative groups in the hopes of turning the state red.
In the 2008 incorporation papers, Block is listed as the president of Wisconsin Prosperity Network, which was set up as a tax-exempt nonprofit group. That means the charitable organization cannot have direct political involvement. Hansen was the group's executive director.
Last year, Block started up Prosperity USA, another tax-exempt charitable group for which Block appeared to be the sole board member. Again, Hansen handled the day-to-day operations.
Insiders familiar with the groups say the two groups were closely linked and raised hundreds of thousands of dollars from prominent conservatives around the state. One supporter, who asked that his name not be used because he still supports Cain and other conservatives, said he and many others were deeply upset with the groups - and Hansen, in particular - for failing to use the money for its intended purposes.In a follow-up column, Bice quoted Lawrence Norton, a former general counsel at the Federal Election Commission: "It looks like a law school exam on potential campaign finance violations," Norton said, "Many of these payments would be prohibited contributions under federal election law."
The contributions of conservatives to Block's Prosperity USA, a 501(c)(3) "charity," would have been tax deductible. That means that you and I essentially subsidized, albeit microscopically, the contributions to the organization, by having our personal future bills for addressing the national debt increased. It would be good if the U.S. Department of Treasury would pursue this case to see if the contributions were made illegally. It would be wonderful, but probably unlikely, if the IRS could retroactively revoke the deductability of the contributions made to the organization based on its violation of campaign finance laws.
AFP has recently said that it was going to be reviewing payments it had made to Mark Block's Prosperity USA, which is alleged to have made improper payments to the Herman Cain presidential campaign. AFP may be in trouble as well for using an intermediary, Prosperity USA, to make illegal contributions to the Cain campaign.