One of the largest Democratic money operations in the United States approved a six-figure consulting contract for a firm owned by one of its board members, fitting into a broader pattern of insiders profiting from left-of-center philanthropy.
Priorities USA is a 501(c)(4) advocacy organization that has spent well over $100 million since 2016 supporting liberal nonprofits, running political advertisements and funneling money into its affiliated super PAC in a way critics claimed was done to skirt disclosure requirements. While operating as part of the national Democratic money machine in 2022, however, the nonprofit gave a $342,000 contract to a consulting firm owned by board member Kimberly Kauffman, according to the organization’s tax filings.
Similar arrangements have led to at least one nonprofit losing its tax-exempt status, according to a law firm that specializes in tax law. The Internal Revenue Service (IRS) in 2023 revoked the tax-exempt status of a foster care charity because it had been using charitable funds to financially benefit insiders, even though compensation was never alleged to be excessive and the transaction was approved by the organization’s board.
“IRS urges tax-exempt organizations to develop and disclose the process a board uses to identify and handle potential conflicts of interest,” Capital Research Center vice president of research and communications Kristen Eastlick previously told the Daily Caller News Foundation. (RELATED: Never-Trump Group Paid Millions To Firm Run By Its Executive Director, Records Show)
Details about the transaction with Kauffman’s firm are sparse, with Priorities USA’s tax forms only specifying that that nonprofit paid The Kauffman Group for “fundraising consulting” services and that payment was rendered “at or below fair market value.” Priorities USA’s 2022 tax forms state that the organization makes its conflict of interest policy available to the general public upon request, however, the organization did not respond to the DCNF’s request for that document nor the DCNF’s request for comment regarding the transaction.
The Kauffman Group’s LinkedIn page describes it as a firm “dedicated to the advancement of Democratic U.S. Senators.”
The GOP is the party of voter suppression, and the Democrats are the party of voting rights.
This #BlackHistoryMonth, we reaffirm our commitment to mobilizing Black voters in every election. pic.twitter.com/5hqe4XYw7H
— Priorities USA (@prioritiesUSA) February 20, 2024
In addition to serving as a Priorities USA board member, Kauffman has also worked as the deputy executive director of Priorities USA Action, the nonprofit’s affiliated super PAC, since 2015, according to her LinkedIn.
Priorities USA Action has paid over $610,000 to Kauffman’s firm since 2015 for line items ranging from consulting services to reimbursements for travel and meals, according to Federal Election Commission records.
During its early years, between 2011 and 2013, Priorities USA spent millions disbursing funds to liberal groups like Planned Parenthood and the League of Conservation Voters while promoting goals like defending Obamacare, pushing green energy and advocating for immigration reform. The organization’s PAC relaunched itself in 2017 to serve as a nexus for the movement opposing then-President Donald Trump.
Since its relaunch, Priorities USA has spent millions on public relations campaigns aimed at opposing Trump, at times with the support of George Soros’ Democracy PAC and the Democratic-aligned House Majority PAC. In 2023, the organization pivoted away from television ads, reinventing itself this time as a purely digital organization and pledging to spend $75 million to help President Joe Biden and other Democrats win elections, The New York Times reported.
Other liberal nonprofits, Media Matters and the Black Lives Matter Global Network Foundation (BLMGNF), for instance, have also used charitable funds to pay out large contracts to insiders.
Media Matters, similar to Priorities USA, paid $105,000 to a firm owned by one of its board members for “consultant advisory services” in 2022, according to tax filings. BLMGNF, meanwhile, has engaged in a multi-year pattern of approving lucrative contracts to firms owned by its leaders and their family members.
BLM PAC, the political arm of BLMGNF, has also paid over $200,000 to a consulting firm owned by its treasurer.
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