Mike Dubke is no stranger to the value of a good communications strategy: He’s provided advice, through his Crossroads Media firm, to House and Senate candidates, the Republican party and some of the biggest conservative outside spending groups.
But his new role, as White House communications director, is an unusually public one for him. Dubke cofounded a politically active nonprofit — aka “dark money” group — years before such organizations became the hot new thing in campaigning, able to spend money to sway elections while providing anonymity to its benefactors.
He’s also been central to a Koch operative’s political scheme and GOP strategist Karl Rove’s efforts to engineer his party’s comeback after he left the George W. Bush administration and Barack Obama won the presidency.
Dubke has two consulting firms; besides Crossroads Media, there is Black Rock Group, and both have made good money from Republican clients, including the mother-of-all super PACs that Rove started. But it is Dubke’s forays in the shadowy terrain of nondisclosing groups that has some questioning whether he’s suited for the White House job. And the dark money group he started long ago has run afoul of regulators more than once.
Dark money dealer
In 1998, Dubke co-founded one of the earliest bona fide dark money groups, Americans for Job Security (AJS). Long before Citizens United and other Supreme Court decisions helped trigger the proliferation of such outfits, AJS went around the country advocating for and against candidates at the state and federal level and promoting the pet issues of its wealthy corporate and individual donors — who, of course, could remain unidentified under IRS rules.
Over the years, AJS has pushed the boundaries of what many thought these groups could do in the political realm. In a landmark study of dark money in elections from 2000 to 2016, produced by the Center for Responsive Politics and the Wesleyan Media Project, AJS was one of the only politically active nonprofits active in the earliest cycles, running thousands of ads in presidential and Senate races as far back as 2000.
But AJS was never just a dark money group that aimed to elect or defeat certain politicians. The group has advocated for “basically anything we label a ‘pro-paycheck’ message,” as Dubke told the Washington Monthly in 2004. He may have been talking about his own paycheck: From the outside, these campaigns looked less like the general promotion of business friendly policies and more like the sorties of a group willing to jump into any fight its wealthy anonymous donors were bankrolling.
In 2008, for example, AJS paid the state of Alaska a $20,000 fine for spending $1.6 million on a referendum that sought to restrict development of the Pebble Mine, a gold and copper mine at the headwaters of Bristol Bay. Alaska regulators were surprised to see a secretive group out of Washington swoop in and oppose such a specific project, so they investigated and found that AJS had received $2 million from a financier named Robert Gillam, who owned a private fishing lodge in the area. Gillam had been in touch with Dubke before becoming an AJS “member.”
AJS funneled nearly all of Gillam’s money to a group called Alaskans for Clean Water, run by an AJS board member. That same year, Dubke handed over AJS’s reins to a young New Hampshire GOP operative named Stephen DeMaura, who said he made the decision to fund ACW “based upon his own research and judgement” — though the decision seemed contrary to the professed pro-business bent of a conservative group like AJS
Alaska officials weren’t convinced. AJS settled with them, paying $20,000 for acting as an improper conduit for anonymous money and promising not to do that in Alaska ever again.
This activity, year after year, was a part of AJS’ overall operations, which also included sizeable and mounting political spending in elections. While AJS had been active for more than a decade before the Supreme Court handed down its Citizens United decision in 2010, the decision — along with the earlier Wisconsin Right to Life v FEC ruling in 2007 — allowed AJS to more openly target candidates. From 2008 through 2012, AJS reported spending more than $34 million in congressional and presidential elections. The money all came from secret donors and other similarly opaque nonprofit organizations that got their money from secret donors; money twice laundered was less likely to give up the name of its true source.
While Dubke relinquished control of AJS to DeMaura in 2008, he remained a constant presence in the years that followed through his consulting contracts with the group he founded.
And the group continued to trigger regulators’ interest.
In 2012, Americans for Job Security was part of an elaborate “campaign money laundering” scheme in California, that led to historic fines in the state against two groups that served as conduits of AJS money into ballot initiatives in the state.
And last year, the FEC settled with AJS and two other dark money groups, 60 Plus and American Future Fund, for a total of $233,000 for not disclosing the source of money it spent on ads aired in congressional races in 2010. The funds for more than $2 million in ads run by AJS came from the Center to Protect Patient Rights, a 501(c)(4) that was then the hub for the distribution of Koch-controlled funds to like-minded groups, and the head of the hub group helped produce the ads and directed where they ran, according to the FEC conciliation agreement AJS signed.
AJS — which has never had more than a single employee — has long operated out of an Alexandria office space buzzing with interconnected Republican political consulting and media firms, at least two of which involve Dubke. They’ve received millions of dollars in fees from AJS.
Black Rock Group, a political consulting firm that Dubke runs with Carl Forti, has been paid a minimum of $1.7 million in the last three election cycles (CRP’s 2016 data only goes through early fall) by a variety of Republican candidates and groups. Forti was political director of American Crossroads, the group formed by GOP strategist Karl Rove and others that was the Goliath of super PACs for several years. And indeed, American Crossroads was among Black Rock’s biggest clients. In 2012, the group also did work for the pro-Mitt Romney super PAC Restore Our Future — which was run by Forti.
Crossroads Media LLC, also founded by Dubke, was paid hundreds of millions of dollars in the 2012 presidential campaign cycle, FEC and IRS records show — including $9 million by American Crossroads; more than $118 million by that group’s dark money arm, Crossroads GPS; and $15 million by AJS, the nonprofit Dubke started. (Note: Much of the money paid to media consulting firms is used to buy expensive TV time for their clients’ ads; it’s impossible to tell how much the firms keep.)
In the 2014 midterm cycle, the firm appeared to scale way back, taking in just $11.8 million from federal-level political clients (it may have earned more working in state races). But, according to tax documents filed in 2015, $4.7 million of that came from Carolina Rising, the dark money outfit that spent nearly all the money it raised working to get Republican Thom Tillis elected to the U.S. Senate from North Carolina. Long after votes were cast, tax filings revealed that Carolina Rising received nearly 99 percent of its funds from shadowy fellow traveler Crossroads GPS. Dark money being what it is, of course, the original donors are mostly unknown.
Critics waste no time
Given all this, Dubke’s appointment strikes some observers as ironic.
And it’s not going over well with transparency advocates. “This raises serious questions about what we’re going to know about what this administration is up to,” said Jordan Libowitz, spokesman for the watchdog group Citizens for Responsibility and Ethics, which filed the complaint that resulted in the FEC settlement with AJS last year. “Dubke is a luminary of the dark money world.”
Robert Weissman, president of Public Citizen, which has also filed complaints against AJS, expressed similar thoughts in a statement early on Friday, though he also commented what he said was a tangled web of Dubke-connected enterprises.
“(T)here is a sense in which he is a perfect fit for the Trump administration,” said Weissman. “With his self-enrichment…he embodies the administration’s signature amalgam of personal and political cronyism and insider dealing.”
Dubke could not be reached for comment at the time of publication.