June 20, 2014

Election Records: ‘Dark-Money,’ Campaign Groups Have Close Connections

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Key individuals involved in a so-called “dark-money” group supporting T.W. Shannon for U.S. Senate this year have had close ties with the campaign or its main consulting firm, according to state, federal and other public documents.

Those same individuals helped lead a separate independent political group in 2012 that had close connections to the consulting firm representing some state candidates also supported by the political group.

Oklahoma County District Attorney David Prater said this week his office is looking into possible criminal conduct stemming from allegations that the campaign of former state House Speaker Shannon, who is running against initial frontrunner U.S. Rep. James Lankford in the GOP primary for Senate, improperly colluded with an outside group that has spent more than $1 million on advertising to benefit Shannon.

Prater said this week that his office is in a “fact-finding” mode to determine the merit of the complaints; no one has been charged with wrongdoing.

In a story in The Oklahoman on Thursday, Shannon’s campaign denied coordinating with the nonprofit group supporting him, Oklahomans for a Conservative Future. The group was incorporated with the Oklahoma Secretary of State’s Office a week after Shannon announced his candidacy Jan. 29 for the seat being vacated by Sen. Tom Coburn, R-Muskogee.

Federal and state election laws ban a candidate’s committee from coordinating with independent “dark money” groups to promote the candidate or attack opponents. Such groups, which grew after the U.S. Supreme Court’s “Citizens United” ruling in 2010, are often referred to as “dark” because they do not have to reveal their donors and can spend unlimited amounts in political campaigns.

Shannon’s campaign did not return phone calls or emails Friday, but referred questions to Bradley Smith, a former Federal Election Commission chairman who files FEC paperwork for the campaign. Smith said federal rules governing coordination have been narrowly written and interpreted, setting a high bar to prove such activities. He believes no coordination occurred in Shannon’s campaign.

But the Shannon campaign and some of the nonprofit’s members have close connections. At least one person involved in forming Oklahomans for a Conservative Future, Xavier Neira, was also a member of Shannon’s exploratory steering committee for the Senate race and was listed among “hosts and sponsors” of a Shannon campaign fundraiser in Oklahoma City in March. Neira also is chair and president of a second independent political group with close ties to an Oklahoma City political consulting firm, A.H. Strategies, that runs Shannon’s campaign.

Until recently, four of the five people who helped run this second group, Coalition for Oklahoma’s Future, also helped lead Oklahomans for a Conservative Future. The executive director of both groups was political consultant and lobbyist Chad Alexander, a former partner with A.H. Strategies and early donor to Shannon’s Senate campaign.

A.H. Strategies is a powerhouse in state politics and has several affiliated companies. Some are run by the company’s partners and provide a range of campaign services. A.H. Strategies and its affiliates have served clients at local, state and national levels of politics and have received advertising awards for their work.

In 2012, connections were strong between some of those leading A.H. Strategies, which consulted for several candidates in state and federal races, and some leading the Coalition for Oklahoma’s Future, which did polling or sent mailers in support of at least five of those candidates, Ethics Commission records show. No allegations were made about whether these ties could lead to coordination between the nonprofit and candidates, although one candidate not represented by A.H. Strategies sued both the consultant and the coalition alleging falsehoods in political ads.

2012 Election

The roles of A.H. Strategies and the Coalition for Oklahoma’s Future developed quickly in 2012.

On Jan. 20, 2012, a group of Oklahoma City-area men established the nonprofit Coalition for Oklahoma’s Future.

Incorporation records filed with the Secretary of State’s Office show the nonprofit’s board members and founders were Neira, director of business services of Oklahoma City-based Manhattan Construction; John Woods, president and CEO of the Norman Chamber of Commerce, and Jeff Cloud, a former Corporation Commission member who had resigned in 2011 to take a job at energy firm Continental Resources.

That same month, Chad Alexander, a political consultant and lobbyist for an A.H. Strategies affiliate, Majority Designs, was named executive director of Coalition for Oklahoma’s Future.

Alexander was a veteran consultant and lobbyist for A.H. Strategies and a senior partner at Majority Designs, a direct-mail and strategy firm housed in the same Oklahoma City offices as A.H. Strategies. Majority Design’s managing partner was Trebor Worthen, who is also with A.H. Strategies and now a chief Shannon campaign strategist.

Alexander also owns his own lobbying and consulting firm, Alexander Companies. When he took over operations at Coalition for Oklahoma’s Future, he was joined by Stephanie Milligan, a lobbyist and vice-president of Alexander Companies.

In March 2012, Majority Designs announced that Alexander had decided to leave to avoid potential ethical conflicts because of his work at the Coalition. Ethics Commission records show the Coalition had begun paying Alexander, through his consulting firm, and Milligan in late January.

In May 2012, Coalition for Oklahoma’s Future began sending out direct-mail pieces and buying radio ads for three candidates who also were using A.H. Strategies as a campaign consultant. One of those was state Sen. Clark Jolley.

Jolley, a Republican, was being challenged from the political right in the June 26, 2012, GOP primary by Paul Blair, a Baptist minister in Edmond.

Coalition for Oklahoma’s Future began spending money in early May in support of Jolley. It spent $4,400 on polling, and on June 15 spent at least $90,000 on television and radio ads, Ethics Commission and Federal Communications Commission records show.

The ads accused Blair of failing to pay taxes on a company he had owned but that was no longer active. Blair vehemently denied the allegations and sued Jolley and Coalition for Oklahoma’s Future, but later dropped the suit.

Coalition for Oklahoma’s Future spent nearly $9,000 more in the race on polling and surveys in the days leading up to the primary. Jolley won. The Coalition also spent money that month in support of two other candidates who were clients of A.H. Strategies.

Meanwhile, the Coalition was making payments to A.H. Strategies, where Alexander had worked, in the days before the primary. Ethics Commission records show that the Coalition paid A.H. Strategies a total of $7,500 on June 15, June 21 and June 22, 2012. The purpose of the payments was described as “Retainer.”

The Coalition made a fourth payment of $2,500 to A.H. Strategies on Aug. 28, 2012, records show. The purpose was “contract services.”

Neira, Jolley and an attorney for Alexander did not return calls Friday for comment.

Current Election

In January this year, Sen. Tom Coburn announced he would not run for another term.

A rush to fill Coburn’s post ensued, but three Republican frontrunners soon emerged: 5th District Congressman Lankford, House Speaker Shannon, and former State Sen. Randy Brogdon.

On Jan. 27, Shannon announced the members of his exploratory steering committee. Among those was Neira, who remained president of Coalition for Oklahoma’s Future.

On Jan. 22, five days before that announcement, Shannon’s campaign accepted a total of $5,200 in donations from Alexander. Alexander’s donations, and ones from wholesaler Central Liquor Co. and members of the Naifeh family, who own Central Liquor, were the first donations accepted by Shannon’s campaign, Federal Election Commission records show. Alexander has been spokesman for Central Liquor. Naifeh family members could not be reached for comment.

On Jan. 29, Shannon officially announced his candidacy. A few days later, state incorporation records for a new “dark-money” group, Oklahomans for a Conservative Future, were filed with the Oklahoma Secretary of State’s Office.

Unlike similar groups, however, Oklahomans for a Conservative Future was created as a for-profit company, not as a “social welfare” nonprofit organized under the IRS tax code 501(c)(4).

The group’s incorporators were Xavier Neira, Chad Alexander and Stephanie Milligan. Alexander was listed as executive director, meaning he was running both Oklahomans for a Conservative Future and Coalition for Oklahoma’s Future.

In March, after the group’s ads began making news and its for-profit status drew criticism, the group reincorporated as a nonprofit. Milligan was replaced with Woods, the Norman Chamber of Commerce CEO and a founder of the Coalition in 2012.  Woods could not be reached for comment late Friday.

The new group, Oklahomans for a Conservative Future, is participating in federal election campaigns and is structured in a way that does not require disclosure of its donors to the FEC. In contrast, the Coalition for Oklahoma’s Future is participating in state races only and discloses its donors to the Oklahoma Ethics Commission.

Oklahomans for a Conservative Future made its first direct-mail buy in support of Shannon for close to $102,000, FEC records show. This was followed on March 5 by $200,000 in spending for a television ad supporting Shannon, records show.

As of June 19, Oklahomans for a Conservative Future had spent nearly $1.3 million on ads or direct mail in the race.

Meanwhile, after the 2012 election, the Coalition for Oklahoma’s Future appeared to go dormant, with little financial activity and about $2,000 in its account early this year, according to state records.

Then, on Feb. 25, the Chickasaw Nation, of which Shannon is a member and from which he has received political support, made a $100,000 donation to the Coalition for Oklahoma’s Future. In March and April, the Coalition paid Alexander $33,000 for services performed.

The only other donation to the Coalition reported so far this year was $50,000 on June 6 from Tulsa-based Rooney Holdings Inc., owner of the construction company that employs Neira.

Both the Chickasaw Nation and Rooney Holdings had donated heavily to the Coalition for Oklahoma’s Future in 2012. The Coalition has not yet reported any new expenditures to benefit candidates in state races.

Alexander stepped down as executive director of the Coalition for Oklahoma’s Future after he was arrested May 13 during a traffic stop in which Oklahoma City police say they found cocaine and prescription pills. It’s unclear whether he is still involved with Oklahomans for a Conservative Future.

Days later, Oklahomans for a Conservative Future filed new incorporation documents removing Alexander and Neira as directors.

Charlie Spies, an attorney for the nonprofit, said he hopes scrutiny will also be applied to a similar “dark-money” group, Foundation for Economic Prosperity, which has spent around half a million dollars supporting Shannon’s opponent, Rep. James Lankford.

“Oklahomans for a Conservative Future has policies in place to ensure compliance with all coordination rules and is not aware of any violation of these policies,” Spies said.

Clif Adcock can be reached at cadcock@oklahomawatch.org

  • Brian Ridge

    Well, people that work in politics know each other….is that news? I see no evidence of a violation of the law by anyone associated with Shannon. Do you know of any such evidence? I will commend you on explaining the law much better than the Oklahoman did in their hatchet piece the other day.