Little-Known Force on the Left Tiptoes into 2016 Races
(Bloomberg) -- There’s a new, deep-pocketed liberal donor in town.
It’s called the Civic Participation Action Fund, and it’s run by a man named Stephen McConnell in Washington. Formed last year with $50 million, it’s donated to at least three different Democrat-aligned super political action committees this year, including $1.5 million to mobilize immigrant voters for Hillary Clinton.
The fund’s money comes from the Atlantic Philanthropies, which has given away more than $7 billion since its creation by a billionaire retailer in 1982. Atlantic affiliates have long backed left-leaning policy initiatives, from opposing the death penalty to advocating for President Barack Obama’s health-care law, but they’ve rarely supported or opposed candidates before now.
"It is increasingly difficult to avoid partisan politics if you want to bring about significant changes in public policy," McConnell said in an e-mail. "From my view, the world around us has changed more than we have."
McConnell’s group is unusual in the world of big-money politics, which, across the ideological spectrum, is dominated by the whims of individual wealthy donors. Its roots are more in the philanthropic world, where institutions tend to avoid politics because of tax laws and an aversion to controversy.
The fund owes its existence to the improbable career of a man named Chuck Feeney. Now 85, he grew up poor in New Jersey, made a fortune with a global chain of duty-free shops, and then set up Atlantic to give his wealth away quietly. His generosity was a closely guarded secret until 1997.
"The Billionaire Who Wasn’t," a biography of Feeney by Conor O’Clery, is a portrait of a man who shuns the spotlight, lives modestly and travels constantly, usually in coach class. He’s as ambitious in philanthropy as he was as an entrepreneur. He founded General Atlantic, a pioneering private-equity firm, to help manage his charitable funds. During the early 1990s, O’Clery writes, Feeney played a behind-the scenes role in the Northern Ireland peace process, bankrolling a Sinn Fein office in Washington.
Most of Atlantic’s money has always gone to apolitical projects, such as university buildings and medical research around the world. One current high-profile endeavor is a $350 million commitment to help Cornell University build a new high-tech campus in New York City.
But under Gara LaMarche, who became Atlantic’s president in 2006, the group expanded its efforts to influence public policy, putting more than $200 million into a dedicated advocacy fund. Such "social welfare" funds don’t offer donors a tax deduction the way a charitable foundation, hospital or university does. But compared with charities, they are freer to lobby the government or support political candidates.
"One of the things that made Atlantic most distinctive was its capacity to do the kind of grants" that charities can’t, LaMarche said in an interview. Before he joined Atlantic, LaMarche worked for the Open Society Institute, controlled by George Soros, the billionaire investor who is among the left’s top donors.
At Atlantic, LaMarche spent about $27 million to push for the Affordable Care Act, and played such a key role in the health law’s passage that he attended the signing ceremony at the White House, O’Clery writes. LaMarche later left Atlantic after a boardroom clash with Feeney, and now heads Democracy Alliance, a network of top liberal donors.
Atlantic aims to give Feeney’s money away within his lifetime, and it’s said it will complete the last of its grantmaking this year and prepare to shut down. That’s a problem for some groups that have come to rely on its largesse.
To help soften the blow, Atlantic set up McConnell’s fund as an independent social welfare organization last year, giving him $50 million and five years to spend it. McConnell was previously a top official at Atlantic and at the Alzheimer’s Association.
Feeney isn’t involved with the new fund, according to Christopher Oechsli, the current president of Atlantic. He declined to make Feeney available for an interview. In his book, O’Clery describes Feeney as politically liberal. He’s not a major partisan donor. According to the Center for Responsive Politics, his last disclosed political donations were to the Democratic party in the 1990s.
McConnell said his fund focuses on helping poor people and minorities get more involved in the democratic process -- the issues themselves are a means to that end. "We hope to make the electorate look more like the population," he said in an e-mail. Early grants have supported groups working to reduce incarceration, and this year it spent $500,000 on an effort to raise the minimum wage in Colorado.
The shape of the nation’s electorate is a charged issue this year. Republicans in several states, citing concerns about election fraud, have sought to impose new voter-identification restrictions and limit early voting. Democrats say these rules are intended to depress turnout among their supporters, especially minorities. In Wednesday’s presidential debate, Trump refused to commit to accepting the result of the Nov. 8 election by alluding to the fraud claims, referring at one point to "millions of people that are registered to vote that shouldn’t be registered to vote."
On its website, the fund says it doesn’t give money to groups that are "overtly partisan," and McConnell said in an e-mail the vast majority of its funds don’t involve electoral issues. But McConnell said that "we remain open to a candidate/partisan approach if it is the best way to engage the populations we care about (Latinos and African Americans), and if it helps build organizational strength in communities."
Some of the fund’s causes overlap with those of Soros. In February, the fund gave $300,000 to a Soros-backed effort to support Kim Foxx in the Democratic primary for state’s attorney in Cook County, Illinois. Foxx prevailed over an incumbent who faced criticism for her handling of the Laquan McDonald police shooting case in Chicago.
And in May, the fund gave the first part of what eventually became $1.5 million to another Soros-backed super-PAC, Immigrant Voters Win. That group pays canvassers to knock on doors in Latino neighborhoods in swing states, encouraging immigrants and their families to take part in the election and vote for Democratic candidates for national office.
The fund’s other super-PAC gift was $75,000 in April for a union-sponsored group in Florida. The purpose, McConnell said in an e-mail, was to conduct a controlled experiment. What would better motivate people to register to vote, "a candidate message (e.g. stop Trump) or an issue message (e.g. raise the minimum wage)?" He said the results were mixed.
With the fund set to exhaust itself by 2020, McConnell has been urging others in the nonprofit world to consider more overtly political projects. "Many foundations worry that associating with a high-profile cause will be controversial," he wrote in the Chronicle of Philanthropy in December. But, he went on, "the American policy-making environment is now so partisan and divided that it’s no longer enough to simply build a strong case and robust evidence to advance a policy view."