Media Matters for America founder David Brock reaped illegal profits through the transfer of millions from a nonprofit he founded to a for-profit entity under his control, according to an IRS complaint filed by a conservative watchdog group.
The complaint detailed how Brock’s nonprofit group American Bridge Foundation (AB Foundation) transferred $2.7 million in tax-exempt assets to True Blue Media, a for-profit company owned by Brock that is the parent company of ShareBlue, a for-profit media company now known as The American Independent. The transfers violated IRS rules that prohibit nonprofit organizations from using their tax-exempt resources to pay personal or private expenses of any key figures connected to the nonprofit, the complaint stated.
AB Foundation’s sister super PAC, AB PAC, announced plans in March to spend $50 million on ads targeting President Donald Trump. AB PAC also reportedly brokered an alliance in March with another super PAC, Unite the Country, which supports former Vice President Joe Biden’s presidential bid.
“David Brock, a leading leftwing political consultant, raises millions of dollars every year to influence the media, politics, and campaigns,” said Craig Robinson, the president of the Iowa-based Patriots Foundation that filed the complaint. “Behind the scenes, his network of organizations have engaged in very troubling behavior that warrants serious investigation.”
AB Foundation president Bradley Beychok told The Daily Beast that the group’s “investment” in True Blue Media was determined by its board of directors to further its nonprofit mission and that in return AB Foundation received stock in Brock’s for-profit company.
“To remove any potential conflict of interest, David Brock resigned as an officer and a member of the board of directors [of American Bridge] in 2016, before the first investment was made,” Beychok told The Beast.
However, AB Foundation referred to Brock as its chairman as recently as 2018, after the group began disbursing tax-exempt funds to True Blue Media, The Beast noted.
The complaint also cited AB Foundation’s audited financial statements, which show that Brock’s nonprofit group has transferred over $10 million to its sister super PAC between 2015 and 2018 under a cost-sharing agreement that didn’t formally exist.
The Daily Caller News Foundation previously reported that AB Foundation has pumped $17 million into AB PAC since 2010, according to Federal Election Commission records. Receipts for the transfers said they were to cover AB Foundation’s share of employee and office space expenditures, but no formal cost-sharing agreement exists between the two entities, according to AB Foundation’s audited financial statements for 2015, 2016 and 2017. (RELATED: David Brock’s Dark Money-Funded Super PAC Now Wants To Outlaw Dark Money)
The Patriots Foundation’s complaint against AB Foundation also highlighted how the nonprofit group made interest-free loans worth over $900,000 to an unnamed “individual” in an apparent violation of IRS rules that prohibit the use of tax-exempt resources for private benefit.
The Patriots Foundation also filed complaints against three other Brock-founded nonprofit groups. One complaint was filed against Media Matters alleging it is abusing its charitable status to achieve political aims. Another complaint was filed against the Franklin Forum and the Franklin Education Forum, two nonprofit groups founded by Brock that engaged in transactions with each other that the Patriots Foundation alleges were designed to skirt nonprofit rules.
“These complaints we filed provide a damning indictment of serious allegations about how his organizations have circumvented rules and exploited the tax-exempt status of the organizations for personal benefit and partisan political purposes, and potentially siphoning millions for improper purposes,” Robinson said.
He added: “We’re calling on the IRS to conduct a thorough investigation of Brock’s organizations and to hold them accountable for all violations.”
AB Foundation and Media Matters did not immediately return the Daily Caller News Foundation’s requests for comment.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com.