Investigative Group

Legal Group Files Complaint Against Pro-Doug Jones Super PAC For Concealing Donor Identities

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• Highway 31 spent $4.4 million in support of Doug Jones and against Roy Moore in Alabama’s special U.S. Senate election in December
• Campaign Legal Center filed a complaint against Highway 31 on Monday alleging the Super PAC failed to disclose its contributors in its reports to the Federal Election Commission
• “I think it’s very likely that national Democrats wanted to create the appearance of Highway 31 being a local organization,” CLC attorney told the Daily Caller News Foundation

A super PAC that supported Democrat Doug Jones in Alabama’s special U.S. Senate election in December misled the public about the identity of its contributors, a complaint filed Monday with the Federal Election Commission charges.

Highway 31 Super PAC burst onto the scenes in Alabama just one month before election day in the deep-red state right when it appeared Jones had a chance to win over his opponent, Republican Roy Moore.

The Super PAC outspent all other outside groups between its date of formation on Nov. 6 and election day on Dec. 12, spending $4.4 million in support of Jones and against Moore.

But prior to election day, it was unclear who was funding Highway 31’s operations. The way in which the group left Alabama voters in the dark regarding the identity of its contributors violated campaign finance law, according to a complaint the Campaign Legal Center filed Monday.

In its only report prior to the special election, Highway 31 reported it had received no contributions. But despite not raising a penny, the group had been extended $1.2 million in credit from a variety out-of-state media consulting firms for advertising production and media buys.

At the time, it was reported that Highway 31 was utilizing a little-known loophole to hide the identity of its contributors by operating entirely on credit.

It took more than five weeks after Jones’ election victory for Highway 31 to reveal its funding sources in a post-election report filed with the FEC.

The report revealed that the Super PAC was funded primarily by three outside groups — $3.2 million from Senate Majority PAC, a Super PAC with ties to Senate Minority Leader Chuck Schumer, $910,000 from the Democrat-aligned Priorities USA Action Super PAC, which is backed by billionaire George Soros, and $250,000 from the League of Conservation Voters.

Highway 31 apparently had no purpose after Jones’ election victory. The same day it revealed the identity of its contributors, Highway 31 filed a termination report with the FEC. The Super PAC was in business for less than three months.

Highway 31 spokesman Adam Muhlendorf said prior to the election that the group followed “every appropriate rule and regulation” in its reporting to the FEC

But the CLC accuses Highway 31 of intentionally gaming the system, pointing to the suspicious timing of when the group received its contributions and when it repaid its debts.

“The reason that this scheme is so problematic is because Highway 31 gamed the reporting schedule to keep voters in the dark about the sources of its funding until after election day,” CLC attorney Brendan Fischer told The Daily Caller News Foundation.

The CLC’s complaint questions why out-of-state media consulting firms trusted Highway 31 enough to extend the group millions of dollars in credit within days of its founding and despite the fact it had appeared to have raised no money.

“For some reason, these Washington D.C.-based vendors were willing to extend this newly-created committee, that had not raised a penny, $1.2 million in credit,” Fischer told TheDCNF.

Highway 31 began paying off its $1.2 million debt the same day it received a $1.2 million contribution from Senate Majority PAC, which just so happened to occur just two days after filing its only pre-election report.

“The effect of that is that voters didn’t know who was funding this group until well after election day,” Fischer said.

The timing provides a reason to believe that Senate Majority PAC gave Highway 31 some sort of guarantee it would be able to pay off its debt, according to CLC’s complaint.

A guarantee is a loan, and the FEC considers a loan to be a contribution. Therefore, CLC argues that Highway 31 should have reported a contribution from Senate Majority PAC prior to the election. Failure to report a contribution is a violation of campaign finance law.

More issues arose with Highway 31’s reporting even after it disclosed the identity of its donors following the election.

Highway 31 reported it received $910,000 from Priorities USA Action in November. But Priorities USA Action did not report giving any funds to Highway 31 anytime in 2017, let alone November.

This means that Highway 31 reported a contribution it did not receive, according to CLC’s complaint.

Josh Schwerin, the communications director for Priorities USA, clarified the discrepancy in an email to TheDCNF, saying the contributions actually came from Priorities USA, a social welfare 501(c)(4) nonprofit.

It’s unclear why Highway 31 reported it received the contributions from Priorities Action USA Super PAC. Highway 31 didn’t immediately respond to a request for comment from TheDCNF.

Fischer told TheDCNF that he has faith the notoriously-deadlocked FEC will be able to resolve the clear discrepancy.

“Even if the FEC takes its time on some of these other matters, I would expect they would at least try to resolve this one and get Highway 31 to correct their report or get Priorities USA to correct their report,” Fischer said.

Democrats’ use of dark money called into question

Jones, now representing Alabama in the U.S. Senate, ran on a platform of bringing “integrity back to Washington.”

“We are all tired of politicians who have been bought and paid for by special interests and who view the world through a partisan lens instead of considering the best interest of those they are supposed to represent,” he said on his campaign website.

The 2016 Democratic Party Platform called for an “overhaul” of the FEC “so that there is real enforcement of campaign finance laws.”

“And we need to fight to eliminate super PACs and outside spending abuses,” the 2016 Democratic Platform stated.

But the tactics utilized by Highway 31 during Alabama’s special U.S. Senate election shows that Democrats are willing to utilize “dark money” when it serves to further the party’s interests.

“I think it’s very likely that national Democrats wanted to create the appearance of Highway 31 being a local organization and wanted to disguise the fact that the true sources of the group’s support were coming from out of the state and national Democratic donors,” Fischer told TheDCNF.

Chris Hayden, the communications director for Senate Majority PAC, told the Center for Public Integrity in February that national Democratic organizations will continue to utilize dark, untraceable money in the 2018 midterm elections.

“Until Republicans come to the table to discuss real campaign finance reform, we will continue to play by the current rules as we try to compete with the seemingly unlimited resources of the Koch brothers and other corporate special interests that fund Republican dark money groups,” Hayden said.

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