A major Democrat super political action committee, the PAC for America’s Future, is investing heavily in Arizona this election year. PAC for America’s Future is not only the largest PAC in Arizona; it is a top donor to the Democratic Party.
PAC For America’s Future has focused on Arizona, one of the more contentious of the six key swing states for the election, alongside Wisconsin, Pennsylvania, Michigan, Georgia, and Nevada. According to the Arizona secretary of state’s campaign finance portal, the PAC is the second-largest in the state with over $9.5 million in income and $4.2 million in expenditures, after Arizona for Abortion Access ($12.3 million income, $9.6 million expense). However, PAC for America’s Future has the highest cash balance in the state: over $8.3 million.
These funds are from out-of-state interests, not Arizonans. AZ Free News reviewed all finance reports and found that total funds from Arizonans amounted to slightly less than $13,500 across 122 donations (some of whom were recurring donors). That’s .0014 percent of total donations since last year.
Most of the other funds come from sizable contributions by wealthy out-of-state Democrats. Jonathan Soros, heir to father George Soros’ $25 billion empire, has given $2 million to PAC for America’s Future this year and remains their single-highest donor.
Other top donors from last year to this year include:
$500,000 from Lynn Schusterman, an Oklahoma billionaire and wife of the late oil and gas founder Charles Schusterman
$1 million from Wendy and Barry Munger, Californians and children of former Berkshire Hathaway vice chair and late Charles Munger
$400,000 from Indiana philanthropist Deborah Simon, daughter of billionaire shopping mall magnate Melvin Simon
$400,000 from Steven Laufer, economist with the Federal Reserve Board
$300,000 from Debra Ann Efroymson, a New Mexico descendant of the wealthy Efroymson dynasty
$250,000 from New York property management tycoon Gideon Friedman
$245,000 from billionaire California philanthropist John Pritzker, son of Hyatt Corporation founder Jay Pritzker
$200,000 from David Karp, former CEO of major social media platform Tumblr
$100,000 from a Paul Karp (Paul Haahr), a Google software engineer out of California
$100,000 from Linda Schlein, the wife to venture capitalist Ted Schlein out of California
$170,000 from multiple members of the billionaire Pigott family out of Seattle, Washington
$75,000 from Juan Sebastian Scripps, an angel investor out of Kentucky
$75,000 from Andrew Beck, a New York-based philanthropist
$50,000 from Steven Spielberg, the acclaimed Hollywood director
$50,000 from Kate Capshaw, a Hollywood actress
$50,000 from Jacqueline Asplundh, the Asplundh Tree Expert Company scion out of Florida
$50,000 from Brian Rosenthal, the engineering director for Facebook residing in New York
$50,000 from Lorin Silverman, the New York descendant of business tycoon Marty Silverman
PAC for America’s Future’s affiliates have also brought in millions for the cause. These affiliates serve as holding entities for transferring funds to the PAC.
PAC for America’s Future formerly went by the “Future Now Fund” up until 2021. It’s a repository for funds from major Democratic dark money donors like George Soros and funder to one of the state’s leading dark money nonprofits, Progress Arizona, the outfit led in part by Governor Katie Hobbs’ former press secretary Josselyn Berry. (She rejoined after resigning from the governor’s office due to her posted gun violence threat to “transphobes” last year within hours of the Nashville elementary school shooting.)
Given its most recent name, it should come as no surprise that PAC for America’s Future is listed as “related” on tax returns to two similarly named 501c4 nonprofit entities: Future Now Action and Future Forward USA Action. The two nonprofits also operate a super PAC, Future Forward PAC, which has received nearly $19 million so far this year from Future Forward USA Action ($12 million in 2022).
This network of millions is a critical resource for the Democratic Party during election years.
Jennifer O’Malley Dillon, White House deputy chief of staff and Biden’s 2020 campaign manager, told The New York Times that the Future Forward ecosystem was “critical” in the 2020 presidential election, and would be again this year.
The Biden team directed his 2020 campaign finance director and White House deputy assistant Katie Petrelius to join the Future Forward team.
The Soros family’s Open Societies Foundation gave $15 million to Future Forward USA Action in 2022 and $5.5 million in 2021. The Arabella Advisors dark money network has also given millions to PAC for America’s Future and the two related “Future” nonprofit entities.
Although few of this mega PAC’s funds come from Arizonans, the Arizona Democratic Party, its candidates, and close-knit organizations have benefitted. In this most recent quarterly campaign finance report, as well as the last, the Arizona Democratic Party received nearly $300,000.
In the last campaign finance report, PAC for America’s Future reported spending over $140,000 on Arizona’s Democratic candidates, with all candidates receiving $10,800 boosts each. AZ List PAC also received $27,000.
For the State House, these donations went to candidates Deborah Howard, Stephanie Simacek, Oscar De Los Santos, Brandy Reese, Nicholas Gonzales, Matias Rosales, Mariana Sandoval, Karen Gresham, and Kevin Volk. For the State Senate, these donations went to Christine Marsh, Analise Ortiz, John McLean, and Stacy Seaman.
PAC for America’s Future is technically a “hybrid” committee — or “Carey” committee — meaning it’s capable of making independent expenditures as well as direct contributions to candidates.
A donor’s first $5,000 goes to a contribution account per PAC for America’s Future’s donor site. All funds beyond that $5,000 cap go into a non-federal account. That latter account is for PAC for America’s Future’s 527 committee, a tax-exempt type of committee that allows for unlimited donations to support or defeat political candidates but requires disclosure of all donors and expenses.
PAC for America’s Future’s 527 Committee then funnels the donations in excess of $5,000 — estimated to amount to tens of millions — to PAC for America’s Future’s joint initiative with Future Now Action, “The States Project” (TSP).
TSP took credit for moves undertaken to flip the Arizona legislature blue, dating back to their initial claim of victory in 2018 with four seats flipped for Democrats in the state House; then two new seats in the House and one new seat in the Senate in 2020; and then defense of won seats in 2022.
“Flipping both chambers in Arizona is possible in 2024. In the Senate 1,500 voters changing their minds would have shifted the balance of power in 2022. And in the House, we see a clear path to governing power, as less than 1,000 voters shifting would have ended rightwing control. Investing in the districts where we see the opportunities to shift power now gives us the strongest shot at achieving our goals in the state.” – TSP
Based on the influx of funds through their various PAC for America’s future tributaries, it appears that wealthy out-of-state interests have a vested interest in ensuring Arizona goes from a swing state to a firmly blue stronghold.
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Benjamin Franklin once famously said, “[I]n this world, nothing is certain except death and taxes” — true, unless you’re a leftist political nonprofit. For many of them, taxation isn’t certain, even if they run afoul of tax-exempt status requirements.
Funding sources, expenditure recipients, and even those operating these nonprofits may remain secretive under the current state of lax federal enforcement. These tax-free and opacity perks are possible through two interrelated federal tax classifications: 501(c)(3), or “C3,” and 501(c)(4), or “C4.” There are over 27,000 C3s and just over 1,200C4s registered in Arizona. The big difference between the two classifications is that donations to IRS-recognized C3 organizations are deductible under our income tax code. And the Left has learned how to exploit this tax status for their political benefit.
In Arizona, many liberal C3 and C4 nonprofits work in tandem, each executing symbiotic duties while coordinating their activities and sharing data and resources. Sometimes, these C3 and C4 duos are “sister” organizations — meaning, they’re affiliated rather than independent entities allied over common goals.
These arrangements are legal so long as clear distinctions are made between charitable and non-charitable activities. Over the last several months, AZ Free News has conducted an extensive review of over a dozen different liberal nonprofits in the state, examining their websites, tax documents, and social media accounts. Our research has found that many of these organizations have blurred the lines on their political activities via various C3 and C4 groups. In some cases, there appeared to be no distinction at all, with some C3 organizations providing completely different accounts of their tax-deductible program activities to the IRS compared to what they shared publicly.
How the IRS Intended for C3 and C4 Organizations to Operate
C3s have two major qualifiers: they’re supposed to be nonpartisan and apolitical—meaning, they can’t expend funds or use resources to coordinate with political activity being conducted by C4s.
C3s must organize and operate exclusively for purposes that are one or more of the following: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.
The IRS defines “charitable” as relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights; and combating community deterioration and juvenile delinquency.
The IRS expressly prohibits C3s from being an “action organization”: those engaging in political or legislative activities. Political activities include the direct or indirect participation or intervention in any political campaign on behalf of or in opposition to any political candidate. The IRS also prohibits political campaign fund contributions or public statements of positions, either verbal or written, on behalf of the organization in favor of or opposing any candidate.
The IRS does condone voter education activities, such as get-out-the-vote (GOTV) efforts like voter registration. However, any evidence of political bias is forbidden: favoritism of a candidate, opposing a candidate in any way, or “hav[ing] the effect of favoring a candidate or group of candidates.” Lobbying is also largely forbidden.
Comparatively, the IRS classifies C4 organizations into one of two categories: social welfare organizations or local association of employees. The former concerns civic leagues or organizations organized exclusively for social welfare promotion, not profit. The IRS clarifies that social welfare promotion doesn’t include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate. Those that do must not render that activity as their primary activity, and risk being subjected to taxation. The latter concerns membership-based organizations with net earnings devoted exclusively to charitable, educational, or recreational purposes.
How Leftist C3 and C4s Operate in Arizona
Our review of leftist C3s in Arizona appears to indicate that their activities are overtly partisan and political. They coordinate with politically active C4s to achieve shared, partisan goals, and receive political action committee (PAC) funding while doing so. Often, these leftist C4s have either direct or indirect participation or intervention in political campaigns on behalf of or in opposition to one or more candidates.
Progressive activists leading these C3s have effectively mastered the art of exploiting the IRS code for partisan advantage, helping to maximize liberal donor partisan impact with their dollars while still hiding their identity. The C3s will claim that their allowable vote (GOTV) efforts, such as voter registration, are nonpartisan. They will claim they’re reaching out to certain, “marginalized” demographic groups; however, these groups turn out to be known Democratic voter bases.
One example of this is Mi Familia Vota Education Fund, the C3 sister organization of Mi Familia Vota, the C4. The former admitted on their 2020 tax filing to coordinating political activity with the latter. The executive director of Mi Familia Vota Education Fund, Hector Sanchez Barba, has publicly advocated for the losses of Republican candidates.
“We will keep working to keep extremism, Trump and MAGA out of our democracy,” wrote Sanchez Barba. “@MiFamiliaVota.”
In response to a Politico article documenting the GOP’s underperformance in last year’s midterm elections, Sanchez Barba thanked Latino voters for having Democrats win.
Meanwhile, their partner C4s pay for media and partisan activities like ad campaigns for candidates. It’s uncertain whether the funding for these activities comes from their C3 partners since those grant or cost-sharing agreements aren’t public. The IRS requires that C3 funds given to C4s be restricted to charitable uses — not electioneering activity.
The C3-C4 duo targets certain voter demographics to achieve a partisan outcome. They contact Democrat-leaning voters to get their vote cast, convince newly registered voters to vote Democratic through mailers and ads supportive of Democratic candidates and causes, and publicly support certain partisan ballot initiatives.
The C3-C4 sister organizations thinly veil their efforts that a division exists between them. For example, Mi Familia Vota spent tens of thousands on TV advertising that advocated for the election of Reginald Bolding ahead of last year’s primary. However, they listed a staffer for their C3 sister organization, Mi Familia Vota Education, as the point-of-contact on that campaign filing.
As AZ Free News reported in Part One of this series, Mi Familia Vota receives funding from One Arizona, a C3, which in turn receives its funding from the Tides Foundation, George Soros’ Open Societies Foundation, and several different organizations under Arabella Advisors.
.@RealMarkFinchem, a MAGAmigo, lies, & says that the 2020 election was fraudulent. If elected, he would use his position to help Trump. We are fighting for free and clear elections this cycle. Our democracy is at stake in Arizona, we must fight back. We say #BastaFinchempic.twitter.com/WPVSjflt2L
Ahead of the midterm election last June, One Arizona advertised a job opening for an independent expenditure (IE) campaign manager. The position appears to be one for a political staffer, which would constitute prohibited electioneering.
While not a complete pitcure, the above graphic illustrates some of the connections in the left’s secretive infrastructure and how they relate to Arizona elections.
Leftist C3s also hire for both the C3 and C4, resulting in shared jobs and salaries. One Arizona (C3) and Arizona Wins (C4) co-hired staff including a field director, field program coordinator, and finance and compliance director. That shared salary should not be used for political work. One recent example of this was a job listing by Arizona Coalition for Change (C3) and Our Voice Our Vote (C4) for a data manager that would work within the duo’s political and grassroots lobbying arms.
These blurred lines surrounding co-hires don’t just apply to staff. Arizona Center for Empowerment (ACE, a C3) and LUCHA (C4) share an executive director, Alejandra (Alex) Gomez, as well as staffers. This relationship is further complicated by the fact that ACE listed LUCHA as its “Employer of Record” on their latest tax return. Under Gomez, both organizations have expressed their partisanship.
Last year, LUCHA launched an initiative to get Democratic candidates elected: “LUCHA Blue.” The nonprofit pledged to prioritize certain races and voter bases in its GOTV efforts. On its hiring page for the initiative, LUCHA disclosed that it would staff between 70 and 105 people.
“We believe that not all candidates align with the mission of LUCHA, and this is why we created a campaign not only to flip Arizona Blue — but LUCHA Blue!” stated LUCHA. “Overall, the goal of the campaign is to win these targeted races, increase Latin/Hispanic voter turnout, and educate voters on the voting process.” (emphasis added)
In one post following Sen. Mark Kelly (D-AZ) winning re-election last November, LUCHA appeared to affirm that both it and ACE assisted in organizational efforts to assure Kelly’s victory.
Wealthy dark money donors have a greater financial incentive to back C3s. 75 percent of their donations can go to politics and qualify as tax deductible — effectively maximizing their gift-giving while affording them a tax break. C4 donations aren’t tax deductible.
The IRS has long been aware of the disparity between the lawful intent for C3 and C4 entities, and the current reality of C3-C4 relationships. As ProPublica revealed in 2019, the IRS essentially gave up on holding nonprofits accountable.
The following are some of Arizona’s liberal C3-C4 nonprofit duos: One Arizona and Arizona Wins, Arizona Center for Empowerment and Living United for Change in Arizona, Mi Familia Vota Education Fund and Mi Familia Vota Victory, Chispa AZ/League of Conservation Voters Education Fund and League of Conservation Voters, Arizona Coalition for Change and Our Voice Our Vote, Instituto Lab and Instituto Power, Rural Arizona Engagement and Rural Arizona Action, and Voto Latino Foundation and Voto Latino.
The relationships between these nonprofits and the awareness of their straining tax law will be further explained in the next installment of this series.
This is Part Two in a series on the Left’s secret infrastructure to turn Arizona blue. Be sure to sign up for our newsletter to be notified of Part Three in the series.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
