Aug 23, 2022

Dark Money Gets $1.6 Billion Donation From One Donor Transcript

Dark Money Gets $1.6 Billion Donation From One Donor Transcript
RevBlogTranscriptsDark MoneyDark Money Gets $1.6 Billion Donation From One Donor Transcript

“It was a very unusual transaction, the likes of which I have not seen in my years of covering money in politics,” says New York Times reporter Ken Vogel. Read the transcript here. 

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Chris Hayes: (00:00)
It’s sometimes been hard to tell if the amount of danger our democracy is in has gotten through to the public at large. We’re seeing new evidence Americans understand, and they are rightly concerned. As we mentioned that new NBC News poll released over the weekend found that voters ranked threats to democracy is the number one most important issue facing the country. And while all this attention now focused on safeguarding American democracy, it’s perhaps more important than ever to know who is working to, well, undermine it. Leonard Leo is one of those people, I think it’s fair to say. He’s the most powerful person in the country you have likely never heard of.

Leonard Leo: (00:34)
The idea was really to create a pipeline, to create a pipeline that started in law school and then glided into the legal profession by building a network or infrastructure of people around the country who could influence the major power centers of our legal-

Chris Hayes: (00:51)
And he’s been very successful. And the world we have today is partly born of their success, largely born of his success. As the New York Times reports, that guy who’s creating that pipeline now has 1.6 billion dollars at his disposal to use however he likes. Ken Vogel is a reporter from the New York Times, one of the reporters who broke that story, and he joins me now. Ken, I read this story two or three times when it was published this morning because I just never encountered anything like it. So just describe to us who donated this money and how.

Ken Vogel: (01:23)
Yeah, it was a very unusual transaction, Chris, the likes of which I have not seen in my years of covering money in politics, wherein this donor, his name is Barre Seid. He was the owner, complete owner, of a electrical device manufacturing company. He donated 100% of the shares of that company to a new nonprofit, a dark money nonprofit that Leonard Leo set up, which then took custody of the company essentially and sold the company to another company, the proceeds of which were about 1.6 billion. And so the nonprofit was able to get, essentially reap the proceeds of that without paying capital gains taxes, which he would’ve had to have paid if he would’ve sold the company directly and then tried to donate the money to this new nonprofit.

Ken Vogel: (02:14)
So it gave them this really huge and unprecedented kitty to an unknown nonprofit group, but that is part of a network, a larger network of groups, that Leonard Leo has formed and cultivated in the last few years to try to influence, not just the judiciary, but politics in a broader way, pushing for conservative issues on things. Pushing for the conservative stance on issues like voting rules, abortion rights, fighting efforts to combat climate change. So it really puts him at the center, a king maker as we termed it, in our story.

Chris Hayes: (02:50)
Just to be clear. Have you ever encountered a transaction of this nature before?

Ken Vogel: (02:57)
So we have seen instances where major donors have given shares of companies, not usually companies they own, but companies where they… A lot of money worth of shares and then the nonprofit can do with it what it wants. And some of the same tax implications are in play there, but never a company, a full company, large company being donated to a nonprofit. No.

Chris Hayes: (03:20)
And this happened in March of 2021. Right? Would this have been public if you and other reporters didn’t sniff this out? How did you find out about it? How do we know about it?

Ken Vogel: (03:33)
No, it would not have been public. These groups, they’re dark money groups, they’re called that for a reason. They don’t have to report a lot of information about their… Don’t have to report any information about their donors. They don’t have to report much information about their finances, including how they spend the money. And so what this group did report on its mandatory tax filings, all nonprofits have to release public tax filings, it reported that it received 100% of the shares of a company, didn’t identify what the company was, and then that it reaped 1.6 billion dollars from selling the shares of the company. And so we, through our reporting, were able to determine what that company was and who the owner was, and a little bit more about Leonard Leo’s relationship with this donor, the owner of the company.

Chris Hayes: (04:19)
And just to be clear again, now this money is sitting there presumably, and can be used, again, thanks to basically the jurisprudence that came out of Citizens United and subsequent holdings by this court, to do whatever you want in any kind of political campaign or essentially entirely unregulated fashion?

Ken Vogel: (04:43)
Yeah. I mean, there are some rules that say that these nonprofit groups have to be engaged primarily in social welfare activities, but what that means, both what social welfare activities means and what primarily means, are very much open to interpretation. And smart political lawyers, including those that are paid by this group who Leonard Leo works with closely, these lawyers, have found ways to spend a lot of money on things that look, from the lay perspective, like they’re just political advertising or political advocacy.

Chris Hayes: (05:15)
And it is all, we should say, essentially tax subsidized. Right? I mean, there’s an enormous tax savings here, but these are essentially subsidized by the federal government, which does not tax them. They are tax exempt organizations?

Ken Vogel: (05:27)
Yeah, that’s right. And there are certainly criticisms, which we include in our story, of transactions like this as allowing wealthy folks to save money on taxes and spend more money influencing the political process. I should also say that is one of the real strengths of Leonard Leo is that it’s not just that he has been so sophisticated in shaping the federal judiciary and other aspects of the conservative movement, it’s that he, over the years, because of his effectiveness, has cultivated this network of donors like this Barre Seid guy, who are willing to give him huge sums of money, as we see in this transaction, that further enhance his power.

Chris Hayes: (06:03)
Well, I would just say from a small d democratic perspective, 1.6 billion dollars should buy a tremendous amount of scrutiny. Ken Vogel, thank you very much.

Ken Vogel: (06:12)

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