Spending target: At least $10 million
American Encore, formerly known as the Center to Protect Patient Rights, is an Arizona-based 501(c)(4) “social welfare” organization that has ties to billionaire businessmen David and Charles Koch. CPPR was formed in April 2009 in opposition to the Affordable Care Act. Its stated mission was to “protect the rights of patients to choose and use medical care providers, promote the relationship between patients and their medical care providers, [and] advocate the rights of patients to independence and autonomy.” In February 2014, it changed its name to American Encore, stating more broadly that it “advocates limited government and free enterprise and is committed to protecting individual liberty, including the rights of patients to choose and use their desired medical care providers.”
American Encore is led by Sean Noble, who also headed CPPR. Before signing on as executive director to CPPR in 2009, Noble was chief of staff to Republican Rep. John Shadegg of Arizona for 10 years. Although Noble did not take a salary as director of CPPR, the group paid $23.4 million to three of his consulting firms.
According to a press release, American Encore plans to spend $10 million in 2014 on an online and TV ad campaign targeting politicians who it believes are infringing on the free speech of their political opponents by advocating new IRS rules that would limit the political activity allowed by 501(c)(4) groups like American Encore. It said it would spend $300,000 on an ad targeting Minnesota Sen. Al Franken for supporting these new rules. The group also spent $30,000 on a similar ad aimed at Senate Majority Leader Harry Reid. CPPR was one of 60 conservative organizations to sign a letter in February to Congress urging a yes vote on legislation to block the IRS for one year (until after the 2014 elections) from implementing new rules to define and limit political activity by “social welfare” nonprofits.
Most of CPPR’s spending and income has been in the form of grants. Between 2009 and 2012, CPPR distributed more than $182 million in grants, including $167 million to conservative advocacy groups, such as the American Future Fund (more than $63 million), Americans for Responsible Leadership (more than $25.5 million), 60 Plus Association (nearly $16.7 million), Americans for Prosperity (nearly $16 million) and Americans for Limited Government (more than $7 million).
The Center for Responsive Politics has called CPPR the “linchpin in one of the most complex networks of dark money in the country,” a network spearheaded by the Koch brothers. The network — which is charted in this graphic — included 17 allied conservative organizations that together raised at least $407 million for the 2012 elections. The Center for Responsive Politics’ OpenSecrets Blog won a 2013 Sigma Delta Chi public service award from the Society of Professional Journalists for its reports on dark money groups.
American Encore does not have to disclose its donors. However, the Center for Responsive Politics discovered some of the group’s funding by sifting through the 990 tax forms for the 501(c) groups that must disclose the names of organizations to which they make donations. It found that CPPR has received most of its donations from other nonprofits, including TC4 Trust and Freedom Partners. Freedom Partners — which has current and former Koch Industries officials on its board — funneled $115 million of the $236 million in grants that it distributed to conservative organizations in the 2012 cycle to CPPR. Between August 2009 and June 2012, CPPR received nearly $28 million from TC4.
In 2012, CPPR was caught up in a legal controversy when California’s Fair Political Practices Commission and the state attorney general launched an investigation of campaign contributions made to the Small Business Action Committee, which opposed Gov. Jerry Brown’s tax plan and supported an anti-labor union ballot measure in the 2012 election. A state investigation found that CPPR funneled $11 million to SBAC and $4.08 million to a group called California Future Fund.
The Fair Political Practices Commission called the $11 million donation “the largest contribution ever disclosed as campaign money laundering in California history.” A settlement reached a year later required CPPR to pay $1 million to the state for not disclosing independent expenditure contributions. In addition, the two California groups were required to pay the state $15.08 million, the amount they had received from CPPR without disclosing the source.