Arabella: The Left’s “Dark Money” Monster (Pt. 1)

by | Jul 24, 2023 | Dark Money

We dive into the Arabella network, the Left’s greatest “dark money” machine. Arabella’s billions and “pop-up” advocacy campaigns have helped Democrats win for years. It’s time for the Right to beat them at their own game.

The most powerful “dark money” force in the world works entirely in the shadows.

Cycle after cycle, this machine quietly pumps hundreds of millions of dollars into activist groups each year under the cover of “philanthropy”—manipulating our politics, electing Democrats, and turning America blue. Even when Republicans took control of the White House, this secret weapon ran sophisticated astroturf campaigns to destroy the Trump administration… without ever exposing its identity.

Conservatives have nothing like it. And all of this went unnoticed by our “watchdog” media for nearly 15 years—until I exposed the scheme in 2018. This is Arabella Advisors, the Left’s best-kept secret.

“Arabella” isn’t one organization, but six. At the top of the hierarchy is Arabella Advisors LLC, a for-profit company formed in 2005 by ex-Clinton White House appointee Eric Kessler to offer consulting services for left-leaning foundations. What sets it apart is the company’s hidden ace: A set of five in-house nonprofits, all established by senior Arabella officials, that “hire” the company to run their operations, for a hefty fee: $46.6 million in 2021. In total, Arabella Advisors has earned $230 million from its groups since 2008.

The network is designed to help liberal donors bankroll political causes while shielding them from public scrutiny. Instead of directly funding activism, “respectable” philanthropies like the Ford, Gates, and Buffett Foundations cut their checks to Arabella’s nonprofits, which pass the funds along—conveniently laundering the donors’ identities in the process.

From a journalist’s point of view, all we see is money entering the pot, and money exiting it—but not who funded what.

The scale of this system is immense. Across the 2019-2020 election cycle, this network collected $2.4 billion, nearly twice as much as the Republican and Democratic National Committees combined.

In just 2021, Arabella’s nonprofits raked in $1.6 billion—that’s $6.5 billion since 2006—virtually all of which went to political causes. Were these groups combined into a single charity, according to data from Forbes, it’d be the seventh-largest nonprofit in America, ahead of the YMCA and Goodwill. It’s a mockery of charity.

Simply put, the Arabella network is one of the biggest pipelines for moving money into politics, but not the way most conservatives understand it.

Besides acting as a conduit this network runs its own insider campaigns with generic names like Arizonans For Responsible Government, Fix Our Senate, Rocky Mountain Values, North Carolinians for a Fair Economy, the Hub Project, and Floridians for a Fair Shake. We call them “pop-up” groups for a reason: They’re little more than websites designed to look like fully independent, grassroots advocacy groups; yet they can be unplugged the minute a campaign wraps up.

These pop-up groups don’t file IRS disclosures, nor do they reveal their staff, boards, or budget. They often solicit donations from unsuspecting liberals, some of whom might be bothered to realize they’re in fact supporting the biggest “dark money” monster in politics and not a grassroots group.

For all intents and purposes, pop-ups aren’t real groups. Yet the political damage they cause to Republicans is very real indeed.

No one on the Right knows exactly how many such astroturf campaigns the network has spawned over the years, but estimates put it at well over 500 groups since 2006—all of them run from Arabella Advisors’ cushy office in downtown Washington, D.C.

Examples of Arabella’s pro-Obamacare, cookie-cutter “pop-up” websites. Credit: Capital Research Center

This network cloaks its activism in euphemisms: Consulting services for foundations and donors who want to engage in “impact investing” through “advocacy strategies,” launching “new initiatives,” and “augment[ing] their combined impact.”

In practice, Arabella’s empire shows the power of professional progressivism: Mega-donors and foundations pour limitless funds into the company’s nonprofit fleet, which each hire Arabella operatives to run slick attack campaigns on everything from packing the Supreme Court, to granting D.C. statehood, to smearing the character of Trump cabinet officials—without revealing the funders’ identities or threatening loss of tax exemption.

In a nutshell, this scheme lets progressive “philanthropoids” quietly bankroll radical activism without trading their Armani suits for Birkenstocks. It’s further evidence that nonprofits—a sector created to encourage charity, remember—now run our country’s politics, not the two parties.

There’s a truism every conservative must learn: You can’t shame the Left.

Above all else, “progressives” desire power and they’ll do anything to get it. All the exposés and media coverage in the world won’t shrink the Arabella network or embarrass them into surrendering on “dark money.” History shows that the best way to beat the Left is to outplay them—and that may mean building a right-leaning Arabella-style network, one which obeys IRS nonprofit laws and uses the Left’s best tactics against them.

But consider that Congress has ultimate authority to subpoena tax-exempt nonprofits, and there’s plenty of reason to believe that the Arabella network is abusing the law. A Republican House majority has oversight over the IRS; a Republican president has the power to constrain political nonprofits.

Their goal should be clear: Strangle the Arabella network by cracking down on the abuse of nonprofits for partisan gain. In this report, Restoration of America provides the ammunition and strategy conservatives need to fight and win lasting victories. But it’s up to patriots to fire for effect.

Behind the Curtain

Perhaps the most amazing thing about the Arabella network is that it managed to remain so well-hidden for so long.

In 2018 I was reporting on the activist groups attempting to block the Senate confirmation of Justice Brett Kavanaugh. Standing outside the Supreme Court amidst a sea of garish, pre-printed picket signs, one group’s name stood out: Demand Justice. It didn’t show up in IRS archives. But the website privacy policy connected Demand Justice to an address on Connecticut Avenue—one that happened to be shared by dozens of other organizations, including the Arabella nonprofit I soon learned was running the anti-Kavanaugh charade, Sixteen Thirty Fund.

I spent the next four or so years mapping every inch of this empire, from its origins and board connections to its lobbying and donors. When I began this project, conservatives were losing the battle on “dark money.” Within a year we’d changed that narrative from defeat to victory by making Arabella Advisors—notthe Koch brothers or Bradley Foundation—the true poster child for “dark money.”

Even the legacy media was forced to acknowledge that the Left has outraised and outspent the Right using “dark money” by nearly 2-to-1 in recent years.

“The system of political financing, which often obscures the identities of donors, is known as dark money,” wrote the New York Times in 2021, “and Arabella’s network is a leading vehicle for it on the left.” Politico agrees, labeling the Sixteen Thirty Fund a “dark-money behemoth.” The Washington Post believes (wrongheadedly) the fund is reason enough for Congress to enact forced donor disclosure laws.

The Atlantic has called Arabella “the massive progressive dark-money group you’ve never heard of” and “the indisputable heavyweight of Democratic dark money.” That was in a 2021 interview with then-Arabella CEO Sampriti Ganguli, who tried to pass off the firm as a “relatively small business-services organization that does HR, legal compliance, etc.”

To her great credit, the Atlantic reporter would have none of it. By the end of the interview, Ganguli had to admit that Arabella’s “the left’s equivalent of the Koch brothers.” In short, the Right won that battle—now we must plan our counterattack.

Eric Kessler’s Excellent Adventure

The man at the top of the Arabella pyramid is Eric Kessler. Kessler’s career began over 30 years ago, not in philanthropy but in grubby eco-activism. Thanks to the work of the stellar Montana investigative journalist Dave Skinner—perhaps the first reporter to encounter Arabella’s earliest pop-ups, fifteen years ago—we know how.

In 1990, Kessler met famed greenie David Brower, a population control devotee who transformed the Sierra Club into a top advocacy group in the 1960s. Brower (with the help of a few martinis) convinced the young Kessler to hitchhike from his Colorado university to San Francisco to serve as a water conservation volunteer for one of Brower’s groups, the Earth Island Institute.

Arabella network founder Eric Kessler

In 1993, Kessler became national field director for another of Brower’s creations: the powerful environmentalist group League of Conservation Voters, which pours tens of millions of dollars into Democratic turnout each cycle. In 1996, he was appointed to President Clinton’s Interior Department under Sec. Bruce Babbitt, himself the former head of the League of Conservation Voters and a hardcore regulator.

Then came a turning point in 1998, when the Kessler family sold its fifth-generation auto parts manufacturer in Chicago, Fel-Pro, for a reported $750 million. Now a wealthy man at 26 years old, Eric Kessler entered philanthropy and in 2005 established Arabella Advisors.

His influence has only grown. Fast forward to May 2023, when it was revealed that Kessler has access to the top echelon of the Biden administration and “plays an intimate role in shaping [the] administration’s agenda” as an unofficial—perhaps illegal—lobbyist. Kessler, a known foodie, was the only non-USDA individual on an email chain led by Agriculture Department Sec. Tom Vilsack discussing how to “transform” the U.S. food system and crack down on high meat prices. Arabella Advisors LLC also owns the “Good Food” initiative, which critics note is “poised to benefit from Kessler’s wide-open access to USDA.”

“The President was extremely appreciative of your effort,” Vilsack told Kessler.

Passing Through

Kessler’s model is an evolution of the pass-through grantmaker dating back to the mid-1970s, when it was pioneered by Drummond Pike’s Tides Foundation, which both “launders” donor grants to political groups and fiscally sponsors new organizations. (The idea for Tides reportedly came to Pike after he helped a wealthy New Mexico couple route funds through his nonprofit to a political group, thus avoiding the spotlight.)

There’s one key difference: the groups that Tides sponsors usually spin off into independent groups, such as People for the American Way. Arabella’s pop-up groups, however, never leave the nest. Even exceptions like Demand Justice, which became a separate nonprofit in 2021, probably did so to distance Arabella Advisors from its spawn (a rare victory for the Right).

And this simple but innovative model was present at the beginning. Early filings show that almost immediately after creating the company Kessler formed the 501(c)(3) New Venture Fund—then called the “Arabella Legacy Fund”—now the largest nonprofit in the network. Since then, Kessler and Co. have added four more spokes: the 501(c)(3) Hopewell Fund and Windward Fund; and the 501(c)(4) Sixteen Thirty Fund and North Fund.

All share Arabella’s address (North Fund excepted), were founded by senior Arabella officials, pay the firm impressive management fees, and promote left-wing causes. Recall, too, that Arabella Advisors LLC makes its money from foundation clients and fees for managing its nonprofit fleet. It’s the only company in the world that created its own clients.

The Arabella nonprofit network’s finances from 2006-2021 (the latest year for IRS disclosures).

A graphic obtained from a confidential donor presentation reveals the advantages in using both 501(c)(3)—whose contributions are tax-deductible—and (c)(4) groups, which may spend significantly more on lobbying and may aid candidates.

Donor presentation showing pop-up groups run by Arabella’s top 501(c)(3), New Venture Fund, and top 501(c)(4), Sixteen Thirty Fund. Credit: Capital Research Center.

Why run so many separate funds? There’s an advantage in having multiple pots to direct donor funds to… and they help throw off nosy journalists. An outside contribution to an Arabella group can potentially be routed through as many as three nonprofits before exiting the system, further obscuring the network’s activities. In 2021 alone, Arabella’s nonprofits shuffled over $98 million between themselves in exactly this fashion—money that will never be traced to its original donors.

As to the source of these funds, only private foundations must publicly report their donors. IRS Form 990 disclosures reveal these nonprofits’ budgets and lobbying sums as well as any grants they pay out—$930 million across the network in 2020, up 134 percent from 2019, an off-cycle year—but there’s no requirement to disclose the pop-up websites.

And each group plays a slightly different, if fuzzy, role in the system. New Venture Fund acts as a paymaster for its “sister” nonprofits and is the biggest (c)(3) grantmaker. Sixteen Thirty Fund, the oldest 501(c)(4), was created with seed capital from ACORN and the Sierra Club to run Arabella’s most politically hot campaigns or pass money to other (c)(4) groups. In 2019 it seeded North Fund, which focuses on state ballot measures and runs even more extreme pop-ups like 51 for 51, Arabella’s push for D.C. statehood. Hopewell Fund runs many of the pro-abortion campaigns, while Windward Fund specializes in “green” causes.

The best evidence of the network’s bias comes from its top grant recipients.

Between 2019 and 2021, Arabella’s Sixteen Thirty Fund granted $138 million to America Votes, the self-described “coordination hub of the progressive community” and one of the Left’s top get-out-the-vote machines. The fund gave $26 million in that span to Kessler’s old outfit, the League of Conservation Voters, and another $10.5 million to Bill Kristol’s NeverTrump group Defending Democracy Together.

Who’s New Venture Fund’s top recipient? The Sixteen Thirty Fund, at $147 million since 2019. Number two: America Votes at $54 million, followed by Arabella’s North Fund at $24 million.

In Part Two, we dive into how the Arabella network is pushing the country to the left with tens of millions of dollars in political spending.

(PDF version available here)