Documents found in Colorado meth house reveal inner workings of Montana dark money group

By Kim Barker, ProPublica, and Rick Young and Emma Schwartz, Frontline

This post was co-published with PBS' Frontline.

The boxes landed in the office of Montana investigators in March 2011.

Found in a meth house in Colorado, they were somewhat of a mystery, holding files on 23 conservative candidates in state races in Montana. They were filled with candidate surveys and mailers that said they were paid for by campaigns, and fliers and bank records from outside spending groups. One folder was labeled "Montana $ Bomb."

The documents pointed to one outside group pulling the candidates' strings: a social welfare nonprofit called Western Tradition Partnership, or WTP.

Altogether, the records added up to possible illegal "coordination" between the nonprofit and candidates for office in 2008 and 2010, said a Montana investigator and a former Federal Election Commission chairman who reviewed the material. Outside groups are allowed to spend money on political campaigns, but not to coordinate with candidates.

"My opinion, for what it's worth, is that WTP was running a lot of these campaigns," said investigator Julie Steab of the Montana Commissioner of Political Practices, who initially received the boxes from Colorado.

The boxes were examined by Frontline and ProPublica as part of an investigation into the growing influence on elections of dark money groups, tax-exempt organizations that can accept unlimited contributions and do not have to identify their donors. The documents offer a rare glimpse into the world of dark money, showing how Western Tradition Partnership appealed to donors, interacted with candidates and helped shape their election efforts.

Though WTP's spending has been at the state level, it's best-known nationally for bringing a lawsuit that successfully challenged Montana's ban on corporate spending in elections, extending the provisions of the U.S. Supreme Court's landmark Citizens United decision to all states.

The tax code allows nonprofits like WTP to engage in some political activity, but they are supposed to have social welfare as their primary purpose. As reported previously by ProPublica and Frontline, when WTP applied for recognition of its tax-exempt status, it told the IRS under penalty of perjury that it would not directly or indirectly attempt to influence elections u2014 even though it already had.

The group is now locked in an ongoing dispute with Montana authorities, who ruled in October 2010 that the nonprofit should have registered as a political committee and should have to disclose its donors. WTP sued. A hearing is set for March.

In the meantime, the group has changed its name to American Tradition Partnership, reflecting its larger ambitions. This month, it sent Montana voters a mailer in the form of a newspaper called the Montana Statesman that claimed to be the state's "largest & most trusted news source."

The front page accused the Democratic gubernatorial candidate of being soft on sex offenders.

Donny Ferguson, American Tradition Partnership's spokesman and executive director, did not specifically address the documents found in Colorado or allegations of coordination made against WTP.

"American Tradition Partnership always obeys every letter of every applicable law," he wrote in an emailed response to questions. "ATP does not, and never will, endorse candidates or urge voters to vote for or against candidates. ... These false allegations are old hat."

On its website, the group says its primary purpose is issue advocacy and combating radical environmentalists, whom it sometimes calls "gang green." It describes itself as a grassroots group backed by a broad membership of small donors.

When asked about the documents found in Colorado, Jim Brown, a lawyer for the group, said he was unfamiliar with them.

After being shown some of the documents by Frontline, Brown, in a follow-up email, said his review indicated that they appeared to belong to a company called Direct Mail. Direct Mail and Communications is a print shop in Livingston, Mont., run by a one-time key player in WTP and his wife.

Brown urged Frontline to turn over the documents. "If the documents are purported to be what you say they are, then you may knowingly be in possession of stolen property," Brown wrote.

The records are in the hands of the Montana Commissioner of Political Practices, which considers them public and reviewable upon request.

* * *

In the anything-goes world of modern campaign finance, outside groups face one major restriction: They are not allowed to coordinate with candidates. That's because contributions to candidates and parties are still capped to limit donors' direct influence, while contributions to outside groups are unlimited.

The Federal Election Commission has a three-pronged test for proving coordination: Did an outside group pay for ads, phone calls or mailers? Did these materials tell people to vote for or against a candidate, or praise or criticize a candidate in the weeks before an election? Finally, did the candidate, or a representative, agree to the expenditure?

Many concerns have been raised about coordination in this election because of close ties between outside groups and campaigns. Super PACs supporting President Barack Obama and Republican nominee Mitt Romney are run by their former staffers. Super PACs and campaigns have used the same consultants, who insist in interviews that they have firewalls.

Proving coordination is extremely difficult, however. Since 2007, the FEC has investigated 64 complaints of coordination, but found against candidates and groups only three times, fining them a total of $107,000, a review of FEC enforcement actions shows.

Montana, which has similar rules, also receives few complaints about such activity, Steab said.

The boxes from Colorado contained a mixture of documents from candidates and outside groups.

Folders labeled with the names of Montana candidates held drafts and final letters of support signed by candidates' wives and drafts and final copies of mailers marked as being paid for by the campaigns. The folders often appeared to have had an accounting of what had been sent and paid for scrawled on the front.

Several folders included copies of the signatures of candidates and their wives. "Use this one," someone wrote in red pen next to a cut-out rectangle on a page with five signatures from one candidate.

Steab, the Montana investigator, said she believed these cut-out signatures were then affixed to fliers from the candidates.

Besides material from the campaigns, the boxes also contained mailers on 2008 and 2010 races in Colorado and Montana from Western Tradition Partnership and six other groups. There were bank statements for several groups, including the Coalition for Energy and the Environment, the Alliance of Montana Taxpayers and the Conservative Victory Fund.

In all the documents, one name repeatedly popped up: Christian LeFer. Even though two Montana Republican politicians founded WTP, investigators determined that LeFer was the man behind the scenes.

LeFer, who is described as WTP's director of strategic programming in memos in 2009, said in an email that the documents "appear to be stolen property" and that, as he'd had no access to them, he couldn't respond to most of ProPublica's questions, "which seem to be based on an erroneous and fanciful interpretation of what they mean."

LeFer did not address whether WTP had coordinated with candidates. Although former employees and candidates said LeFer helped his wife run Direct Mail and Communications u2014 the printing company that Brown, the lawyer, suggested was the owner of the boxes of documents found in Colorado u2014 LeFer said he did not "run or direct the activities" there.

Direct Mail listed its principal office address in Montana filings as being the same Colorado address WTP initially used.

Two outside groups with documents in the boxes u2014 the Montana Committee to Protect the Unborn and Montana Citizens for Right to Work u2014 listed their addresses on bank statements as the same post-office box in Livingston used by LeFer and Direct Mail. LeFer was also the executive director of Montana Citizens for Right to Work, an anti-union group.

Former state Rep. Ed Butcher said LeFer and Western Tradition Partnership aided candidates with no experience.

"They'll come in, if candidates want some help, they'll come in and help them," said Butcher, who described LeFer as "a Karl Rove type political strategist" who "stays in the background."

Butcher's file in the Colorado boxes was labeled "Butcher Primary '08 mail samples." It included an email from LeFer to Butcher with a survey about unions. There was a campaign donation form, and drafts of fliers and a letter from Butcher's campaign.

A "wife questionnaire" for Butcher's wife Pam said she met her husband "on a blind date arranged by his buddy that neither of us wanted." The questionnaire listed her children's names and that she had been taking care of her disabled mother for five years.

A letter on pink paper from Pam Butcher was in a file marked "wife letters." The letter, which contained much of the information in the questionnaire, was marked as being paid for by Butcher's campaign.

Butcher said his wife might have run her letter past LeFer. "He may have asked, 'Do you need any help?' and she said, 'Yeah, I need to get this family letter out,'" said Butcher, who won the Republican primary in 2008 by 20 votes.

A folder for another successful candidate, Mike Miller, included a fax cover sheet from Miller to LeFer, forwarding Miller's filled-out Montana candidate surveys for two outside groups, the National Gun Owners Alliance and the National League of Taxpayers. It also held a candidate survey asking Miller if he had any research about his opponent, including "any recent scandals."

Miller confirmed to Frontline that LeFer was an unpaid adviser on his campaign, but would not elaborate further.

Trevor Potter, a former federal election commissioner who now runs the Campaign Legal Center, a watchdog group that advocates for more restrictions on money in politics, reviewed the documents found in the boxes.

"This is the sort of information that is, in fact, campaign strategy, campaign plans that candidates cannot share with an outside group without making it coordinated," Potter said.

"You need to know more, but certainly if I were back in my FEC days as a commissioner, I would say we had grounds to proceed with an investigation and put people under oath and show them these documents, and ask where they came from and where they were."

* * *

After the 2008 election, Montana started investigating whether WTP should have disclosed its donors.

The inquiry progressed slowly until 2010, when a former WTP contractor handed over internal fundraising records, saying she was worried about what the group was doing.

The documents showed that the group raised money specifically by telling people and corporations that they could give unlimited amounts in secret.

"The only thing we plan on reporting is our success to contributors like you who can see the benefits of a program like this," said one document, a 2010 election briefing to read to potential donors. "You can just sit back on election night and see what a difference you've made."

A target list of potential donors included an executive at a talc mine, the Montana representative of an international mining group and a Colorado executive for a global gold-mining company.

One note about a potential donor advised: "Married rich, hard to get a hold of. Have a beer with him." Another said: "Owns big ranch, signed a hit piece I wrote on cty cmms'r last year (don't mention), should give $$ $10,000 ask."

Other notes suggested that solicitors "See Christian" or "Talk to Christian," apparently references to LeFer.

The documents cited the group's success in 2008, saying in a confidential grassroots membership development proposal that 28 Montana state legislators "rode into office in 100% support of WTP's responsible development agenda."

By 2010, the partnership was active in state races in Montana and Colorado.

That October, Montana authorities said Western Tradition Partnership had violated campaign-finance law and should be fined. They said the group's purpose in 2008 was "not to discuss issues, but to directly influence candidate elections through surreptitious means."

The Montana investigation also said the evidence was overwhelming that WTP had established the Coalition for Energy and the Environment, known as CEE, as a "sham organization" to act as a front for expenditures actually made by WTP.

But the investigation also found that "sufficient evidence has not been disclosed to establish coordination between WTP/CEE and any candidate. Concern and healthy skepticism is warranted, however."

That was before the boxes from Colorado turned up.

A convicted felon named Mark Siebel said he stumbled on them inside a known meth house near Denver at some point in late 2010.

It's not clear how they got there. Siebel said a friend found them in a stolen car. After reading through some of the documents, he reached out to people he thought might be interested in them u2014 primarily Colorado candidates attacked by Western Tradition Partnership. A lawyer married to one of the candidates shipped the boxes off to Montana investigators.

By that time, however, the Montana probe into the group's activities in the 2008 election was over. Steab also said that there was no way to determine for certain where the documents were from and who owned them. There was no whistleblower, and no information about how the records ended up in Colorado.

Despite this, Steab said, she found the documents very telling.

"It looks to me that there was a lot of coordination u2014 but I don't know that it's coordination that everyone is aware of in all cases," she said. She said she spoke to one candidate who told her he was upset about all the negative mailers against his opponent.

This year, American Tradition Partnership is as active as ever. It's suing to try to overturn contribution limits in Montana, so far unsuccessfully. The group sent out mailers attacking candidates before the June primary in Montana, reporting none of them to the state as political expenditures. It later put out a press release saying that 12 of the 14 candidates it backed had won.

For the general election, the group appears to be targeting Montana's attorney general, Steve Bullock, the Democratic candidate for governor. As attorney general, Bullock fought the partnership's lawsuits against the state, including the one that ended up in the Supreme Court.

The first issue of the partnership's Montana Statesman newspaper, dated Oct. 7, which a group press release said was sent to 180,000 voters, featured four photographs on the front page: Three of registered sex offenders, and one of Bullock, accusing him of allowing one in four sex offenders to go unregistered. "Bullock admits failure," the headline announced. A full-page ad accused Bullock of taking illegal corporate contributions and of "criminal hypocrisy."

The Statesman's editor and publisher is none other than Ferguson, the partnership's executive director, described as an "award-winning newspaper veteran" who has been "commended by other newspapers for his 'honest, intelligent and issue-oriented' approach."

Ferguson didn't respond to a question about his journalism credentials.

"Conservative group American Tradition Partnership now one of nation's biggest media outlets," said a press release on the group's website, adding that the newspaper would publish "several" editions through Election Day and into 2013.