Late last year, an obscure New Jersey plumbing company dumped a quarter of a million dollars into Senate Republicans’ top super PAC. Who, exactly, was behind the donation remains a mystery. But a trail of public records did offer some clues that pointed in the direction of a longtime Trump business partner and GOP mega-donor.
East Coast Plumbing LLC was formed in 2010 in Delaware, a state that offers little public information about the companies incorporated there. But there is one name in its corporate records: Jay Beckoff, a compliance manager at real-estate giant Vornado Realty Trust, was listed as the company’s “authorized signatory.” Federal Election Commission records list East Coast Plumbing’s address as a New Jersey building owned by Interstate Properties. Both Vornado and Interstate are run by Steven Roth, who’s been in business with the Trump Organization since 2007. Roth’s ties to the president go beyond there though. He was appointed to a White House economic recovery task force in April, and his companies do extensive business with the federal government.
The $250,000 contribution from East Coast Plumbing to the Senate Leadership Fund, a super PAC aligned with Senate Majority Leader Mitch McConnell, was just one of thousands of political contributions since last year made by entities that attempt to shroud the sources of funds used to attempt to sway federal elections.
Political donations by non-disclosing groups—including LLCs like East Coast Plumbing and 501(c)(4) nonprofits, commonly referred to as “dark money” groups—have skyrocketed in recent years. During the 2018 election cycle, such groups provided roughly $178 million to federal political committees, according to data provided by the Center for Responsive Politics. In 2020, they’re on track to far surpass that total. By the end of June, non-disclosing groups had donated $177 million to federal political committees, per CRP data.
The result, experts say, has been an erosion of fundamental rules governing American elections and the growing amounts of money spent to affect their outcomes.
“These dark money structures create opportunities for actors who want to undermine American Democracy,” according to Sheila Krumholz, CRP’s executive director. “The U.S. must be a leader on this issue, setting an incontrovertible example of functional democratic systems and oversight,” Krumholz told a congressional committee last year. “We cannot ignore these weaknesses that have been allowed to creep into the funding of U.S. elections.”
Those weaknesses are largely products of a string of Supreme Court decisions in 2009 and 2010 that struck down bans on direct corporate politicking and permitted federal political groups to raise and spend unlimited sums of money as long as they did so independent of political candidates and parties. That allowed incorporated entities, whether for-profit or nonprofit, that aren’t required to disclose their financial backers to directly fund political groups, effectively masking the true sources of huge amounts of political spending.
“Transparency allows the public to assess who is behind the political ads they see from super PACs,” according to a new report on opaque political donors from Issue One, a nonpartisan good government group. “When super PACs simply list opaque shell companies or secretive dark money groups as contributors, the public is left in the dark about the true identity of the sources of the money being spent to influence elections.”
The phenomenon is not confined to one political side or the other. In fact, progressive groups have blazed new trails this year in dark money political spending. On June 30 alone, a progressive nonprofit called the Sixteen Thirty Fund donated a whopping $7.9 million to two Democratic super PACs. Sixteen Thirty is a “fiscal sponsor” of scores of subsidiary advocacy groups, adding another layer of opacity to its political contributions; it’s unclear whether Sixteen Thirty itself or one of the outfits it sponsors was behind those donations.
Such lack of disclosure can make it difficult to root out potential corruption and self-dealing among some of the nation’s largest political donors. Indeed, for many corporate and dark money donors, zero public information exists about the actual sources of their contributions. A $250,000 contribution in May to the Senate Leadership Fund, for instance, listed the donor as a company called Norgate LLC in Santa Monica, California. There’s no record of any company by that name in the state. The address for Norgate listed in FEC records is an oceanside office park—the records do not list a suite number.
To the extent that any information is publicly available about many of these opaque political donors, that information comes from public records that don’t show up in campaign finance filings designed to ensure transparency in the funding of political campaigns and interest groups. In most cases, obtaining that information requires digital sleuthing that most voters don’t have the time or resources to undertake.
Lev Parnas and Igor Fruman, the Soviet-born businessmen at the center of impeachment allegations against President Donald Trump this year, sought to ingratiate themselves with Trump and other connected Republicans through high-dollar political contributions. But they routed those donations through an LLC called Global Energy Producers. Details about the company's finances, most of which were first reported by The Daily Beast and were at the center of a federal criminal indictment, only came to light only due to unrelated litigation against Parnas by a former business associate. Had that litigation not been brought forward, there is simply no way Global Energy Producers’ contributions would have been uncovered for the public to see.
Many cases remain unsolved. Take, for example, The Society of Young Women Scientists and Entrepreneurs, an LLC incorporated last year in Hawaii. On Dec. 31, 2019, the company donated $150,000 to 1820 PAC, a super PAC supporting Sen. Susan Collins (R-ME). Its sole publicly listed officer is a woman named Jennifer Lam. And the address that it listed was a Honolulu PO box.
With no way to contact the group, the lone reporting avenue for figuring out who was behind the donation was to figure out who, exactly, is Jennifer Lam. A local news report in Honolulu speculated that the person was in fact Tiffany Jennifer Lam, the wife of the chief executive of defense contractor Navatek, which created its own level of intrigue. Collins had helped secure millions in Pentagon funds for Navatek just a few months before the Society of Young Women Scientists and Entrepreneurs donated to the pro-Collins super PAC.
But it remains impossible to say for certain if this is the way the money flowed. The Daily Beast was not able to independently verify that Jennifer Lam is, in fact, Tiffany Jennifer Lam. By the very nature of the transactions at issue, that is not information available to the public, which as a result is unable to assess any potential quid-pro-quo.
Issue One’s report identifies a host of other federal political contributions made by apparent front companies or firms with little documented business activity beyond their super PAC donations. Together, they represent what the group describes as a significant loophole in campaign finance law that allows wealthy individuals and interests to funnel huge sums into federal political contests with next to no transparency or scrutiny.
In a political environment highly attuned to the prospect of meddling by foreign interests in particular, that set off alarm bells, according to Issue One founder and CEO Nick Penniman.
“Secretive shell companies provide ideal cover for foreigners wishing to evade the existing prohibition on their involvement in U.S. elections,” Penniman said in a statement accompanying the report. “The Justice Department says foreigners have already used shell companies to illegally funnel money into U.S. elections at least twice in recent years. It’s only a matter of time before this glaring loophole in our campaign finance system is more systematically abused by malicious foreign actors.”