Massive donation of black money: New conservative group got $1.6 billion from a single donor

The nonprofit, Marble Freedom Trust, received the stock contribution and then funneled more than $200 million to other conservative organizations last year, according to a tax form obtained by CNN from from the IRS.

Marble Freedom is led by Leonard Leo, the co-chairman of the conservative Federal Society, which advised former President Donald Trump on his Supreme Court choices and leads a sprawling network of other right-wing nonprofits that don’t disclose. not their donors, who are often referred to as black money groups.

Robert Maguire, research director of Citizens for Responsibility and Ethics in Washington, called the donation “astounding” and “by far” the largest known contribution to a black money political group.

“I’ve never seen a group of this magnitude before,” Maguire said. “This is the kind of money that can help these political operatives and their allies start making a difference on issues like overhauling the federal justice system, making it harder to vote, a state-by-state campaign to redo electoral laws and lay the groundwork to undermine future elections.”

Leo said in a statement that “it is high time the conservative movement joined the ranks of George Soros, Hansjörg Wyss, Arabella Advisors and other leftist philanthropists, fighting shoulder to shoulder to defend our Constitution and its ideals. — referring to two liberal-leaning billionaires and a consulting firm that runs several small left-leaning black money groups.

Seid did not respond to requests for comment left on the phone numbers listed for him and his longtime assistant.

Huge anonymous donation has ties to Chicago executive

“Dark money” generally refers to nonprofits that engage in politics but do not disclose their donors, a practice that escalated significantly after the Supreme Court’s 2010 Citizens United decision. Many black money groups, like Marble Freedom, are 501(c)4 organizations — nonprofits that are allowed to participate in politics as long as it’s not their primary business.
Groups on both sides of the political spectrum have increasingly turned to dark money in recent years to sway voters or advance agendas without revealing their ultra-wealthy benefactors — but Marble Freedom’s donation drastically eclipses even the largest of the previously known groups.

Marble Freedom’s tax return covers its first year of existence between May 2020 and April 2021. The donation of just over $1.6 billion came in the form of 100% equity in a private company, which Marble Freedom then sold to another company, according to the tax form.

The arrangement likely saved Seid a large sum of money in taxes, according to Marcus Owens, an attorney and former director of the IRS’s division on tax-exempt organizations, which reviewed the form for CNN. If Seid had personally sold the shares of the company, he likely would have had to pay capital gains tax on the proceeds of the sale. By donating the shares to Marble Freedom, he avoided having to pay this tax, and the non-profit organization would be exempt from paying it.

Marble Freedom wrote that it was withholding information about the company that was donated and to whom it was sold, because “disclosing it would effectively reveal the identity of its donors”.

But details of the donation tie it to the sale of Chicago-based electrical appliance company Tripp Lite, whose longtime chairman was Seid.

After receiving the donated shares, Marble Freedom sold the business on March 17, 2021, according to the tax form. On the same day, according to Securities and Exchange Commission documents, Irish-American electric utility Eaton acquired Tripp Lite for $1.65 billion.
During the sale, “the sole shareholder of Tripp Lite” was represented by the New York law firm Sullivan & Cromwell, Law360 reported at the time. Less than two weeks later, Marble Freedom paid Sullivan & Cromwell $940,000 in legal fees, the tax form shows. An Eaton spokesperson said the company would not provide further details about the acquisition, and several attorneys involved in the transaction did not respond to requests for comment.
Seid served as president and CEO and listed as the “owner” of Tripp Lite in the 2008 federal campaign donation records. He worked at the company, which produces power strips, surge protectors and other devices, for more than 50 years, according to a Facebook post from Tripp Lite. He grew up in Chicago, the son of Russian immigrants, according to census records, and graduated from the University of Chicago.
Seid has a history of making anonymous donations to conservative political groups and causes. A 2015 internal document from the Bradley Foundation, a right-wing nonprofit, said the conservative think tank Foundation for Government Accountability received support from “Barre Seid (anonymous)”. The document was part of a trove of Bradley documents that was hacked and released, and was later included as an exhibit in Senate testimony.
Additionally, Salon reported in 2010 that “Barry Seid” appeared in tax documents as the identity of an anonymous donor who gave nearly $17 million to a group that produced an anti-Islam documentary and sent DVD of the film to millions of homes during the 2008 election. An aide to Seid told Salon that he did not help organize, although she did not say if he did. the donation by passing it through another group.
And leaked emails suggest Seid may also be the anonymous donor who pledged $20 million over five years to George Mason University’s law school to rename it for the former Supreme Court justice. Antonin Scalia in 2016. The emails were obtained via a public records request. and published by George Mason Law alumna Allison Pienta in 2019. The school declined to identify the donor but said Leo coordinated the donation.
Seid and his wife make public donations through another nonprofit, the Barbara and Barre Seid Foundation, which primarily funds Chicago-based cultural organizations and universities but has donated to conservative and libertarian groups. such as the Cato Institute, the Competitive Enterprise Institute and the Heartland Institute. . Seid also donated to various political campaigns in Illinois and elsewhere in the 1990s and 2000s.

Big spend and opaque groups

Even in its early days, Marble Freedom Trust has already funneled hundreds of millions of dollars to other black money groups.

Leo, president and director of Marble Freedom, is one of the most influential figures in the world of conservative black money. A longtime executive of the Federalist Society, a national network of right-wing lawyers, Leo has led or served on the board of more than a dozen different nonprofit organizations. Several of his groups have been associated with political campaigns promoting conservative Supreme Court nominees, operating in complex spending webs.

The new $1.6 billion donation “solidifies Leo as an absolute gravitational force within the conservative political and legal world,” Maguire said. “He was already the man behind the scenes raising money to reshape America’s justice system, and this amount of money takes him to a stratospheric level.”

On Marble Freedom’s tax form, Leo is listed as receiving an annual salary of $350,000 for working 25 hours a week for the band.

The form states that the group’s mission is to “maintain and extend human freedom consistent with the values ​​and ideals set forth in the Declaration of Independence and the Constitution of the United States.” While politics may not be its primary focus, it can at least use some of its enormous resources to influence this year’s midterm or future elections.

“It’s such a large amount that it would be a game-changer if they decided to spend even a portion of it on election-related expenses,” said Anna Massoglia, head of editorial and investigations at OpenSecrets. , a group that studies campaign finance.

Marble Freedom said it made four donations to other nonprofits – transactions that appear to have taken place between the sale of the shares in mid-March 2021 and the end of April 2021.

The biggest contribution was a $153 million donation to the Rule of Law Trust, a nonprofit led by Leo that has funded other conservative organizations. The group’s tax returns show it received just under $80 million in donations in 2018 and no contributions in 2019 or 2020, so Marble Freedom’s donation represents a massive funding boost for the organization. .

Marble Freedom donated $41.1 million to the Donors Trust, a non-profit organization that distributes money to conservative and libertarian groups in addition to non-political organizations. The group is a donor-driven fund, meaning its contributors can recommend where their donations to the fund are sent.

In the past, Donors Trust has funneled millions of dollars to groups that have amplified false claims of voter fraud and advocated for more restrictive voting rules. The group has previously said its donations are intended to “serve the public good”.
Marble Freedom also donated $16.5 million to the Concord Fund, a nonprofit that has advocated for conservative candidates for the Supreme Court and other judicial positions and is associated with a group that has pushed for restrictive election laws. Concord, which was previously known as the Judicial Crisis Network, raised $20.4 million from July 2019 to June 2020, according to its latest earnings statement.

In addition to the three groups with political ties, Marble Freedom donated $18 million to the Schwab Charitable Fund, another donor-advised fund.

Marble Freedom lists two other board members besides Leo, both unpaid. One is Tyler Green, the former Utah solicitor general who has represented the Republican National Committee and other GOP groups in several vote-related lawsuits in recent years. Green, who is listed as an administrative trustee of Marble Freedom, is also a former clerk to Supreme Court Justice Clarence Thomas. The trust’s address is listed as a home in North Salt Lake, Utah, which Green owns.

The third council member is Jonathan Bunch, a former vice president of the Federalist Society who has been involved in various groups led by Leo. Bunch is listed as Marble Freedom’s successor trustee. Green and Bunch did not respond to requests for comment.

At the end of April 2021, Marble Freedom had over $1.4 billion in assets, positioning it to play a major role in conservative causes, potentially for years to come.

“This group is emblematic of the corrosion and collapse of our campaign finance system,” Maguire said — and how it gives “wealthy donors, whether corporate or individual, a far greater access and influence over the system than any ordinary American can ever imagine.”

CNN’s Yahya Abou-Ghazala contributed to this report.

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