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Florida opens investigation into dark-money group key to ‘ghost’ candidate scandal

Orlando Sentinel logoOrlando Sentinel 1/20/2022 Jason Garcia and Annie Martin, Orlando Sentinel
Florida Agriculture Commissioner Nikki Fried during a press conference at Florida Memorial University in Miami Gardens, Florida, on June 24, 2021. © Carline Jean/South Florida Sun Sentinel/TNS Florida Agriculture Commissioner Nikki Fried during a press conference at Florida Memorial University in Miami Gardens, Florida, on June 24, 2021.

ORLANDO, Fla. — A state agency that regulates charities has opened an investigation into a dark-money nonprofit that played a key role in Florida’s “ghost” candidate scandal.

Nikki Fried, the commissioner of the Florida Department of Agriculture and Consumer Affairs, said her department is probing whether the organization, known as “Let’s Preserve the American Dream,” has fully complied with state laws governing nonprofits that solicit funding in Florida.

Fried, a Democrat who is running for governor, declined to elaborate.

“As always, our department will enforce the law to the fullest extent to protect consumers,” Fried said in a prepared statement. “Our Consumer Services team is currently investigating whether this entity was previously operating in violation of Chapter 496, Florida Statutes, and we are unable to comment further at this time.”

The development comes as the Tallahassee-based nonprofit, which is closely associated with one of Florida’s biggest business-lobbying groups, also faces criminal investigation by prosecutors in Miami.

In an emailed statement, Erika Alba, an attorney for Let’s Preserve the American Dream, said the nonprofit “has not been contacted or notified by the Commissioner of Agriculture of any investigation.”

“We are very concerned that a state agency such as the Department of Agriculture would disclose the existence of an investigation to the press before it notified the entity in question,” she said. “LPTAD makes every effort to follow all laws in the state of Florida.

A “social welfare” nonprofit that was established “to educate citizens on the societal benefits of sound economic, regulatory and legal policies,” Let’s Preserve the American Dream has grown into a financial powerhouse. Tax records show it has raised and spent roughly $20 million in just the past three years.

The organization doesn’t have to disclose its donors, though it is closely linked to the lobbying group Associated Industries of Florida, whose members include businesses such as electric utility Florida Power & Light, sugar grower Florida Crystals and Walt Disney World.

Let’s Preserve the American Dream — which was originally named “Associated Industries for America’s Future” — is run out of AIF’s Tallahassee headquarters by a former AIF vice president.

But while dark-money nonprofits don’t have to reveal their donors, they are generally supposed to reveal the groups to which they themselves donate. And some legal experts said that Let’s Preserve the American Dream may not have fully complied with those rules.

“They appear to be engaging in less-than-forthcoming disclosure,” said Philip Hackney, a professor at the University of Pittsburgh School of Law who specializes in nonprofit law and who reviewed tax filings for Let’s Preserve the American Dream at the Sentinel’s request.

IRS rules require nonprofits to disclose every organization to which they give $5,000 or more in a single year. But Let’s Preserve the American Dream has reported more than $10 million in grants in recent years without identifying the recipients — by classifying them as grants to individual people and reporting only lump-sum totals.

In 2016, for instance, Let’s Preserve the American Dream told the IRS that it made $325,200 worth of grants to individuals and none to organizations. In 2018, it reported $9.93 million in grants to individuals and none to organizations. And in 2019, it reported $665,000 in cumulative grants to individuals and none to organizations.

But at least one organization reported funding from Let’s Preserve the American Dream in those years: In 2016, a group called “Consumers for Smart Solar” that was sponsoring a utility industry-supported constitutional amendment said it got $450,000 from Let’s Preserve the American Dream.

Then there’s another nonprofit called “Stop the Discharges Now,” which engaged in a campaign to get the U.S. Army Corps of Engineers to stop releasing water from Lake Okeechobee — an issue of importance to the state’s sugar industry.

On its 2019 tax return, Let’s Preserve the American Dream said it gave $250,000 to Stop the Discharges Now, classifying the transfer as a payment to a contractor, for which there are lesser disclosure rules.

But on its own tax return, Stop the Discharges Now told the IRS that all of its funding came from contributions and grants.

Representatives for Stop the Discharges Now did not respond to requests for comment.

The reporting discrepancies raise “at least yellow flags,” said Lloyd Hitoshi Mayer, a nonprofit expert and professor in the University of Notre Dame School of Law.

Let’s Preserve the American Dream initially reported an aggregate total for its grants on its 2020 tax return, too. But it later filed an amended return that revealed it made nearly $3 million in grants to 13 different organizations in 2020 — including the money it gave to Grow United, the dark-money group that funded the ad campaign promoting apparent spoiler candidates in three state Senate races that year.

It’s not clear what prompted the group to amend its tax return. But investigators in Miami have obtained detailed records about Let’s Preserve the American Dream’s finances in 2020, including documents identifying some of its donors. The organization has asked a judge to keep that information from being released to the public.

The revised 2020 tax return showed Let’s Preserve the American Dream also gave $150,000 to a St. Petersburg-based nonprofit called “Friends of American Water,” whose stated mission is to “build water champions across Florida leadership and affect more sustainable water policies that reduce nutrient loading.”

That matched with Friends of American Water’s tax return, which showed a single donation for 2020 of $150,000 from a donor with the same Tallahassee zip code as Let’s Preserve the American Dream.

Friends of American Water also reported a single donation in 2019 from a donor with that same zip code. But Brandon Shuler, the president of Friends of American Water, declined to say whether that 2019 donor was also Let’s Preserve the American Dream.

Representatives for Let’s Preserve the American Dream declined to answer questions about its transactions with Consumers for Smart Solar, Stop the Discharges Now or Friends of American Water.

Alba, the attorney for Let’s Preserve the American Dream, said the organization’s “tax attorneys and accountants work to ensure proper compliance” and that its financial activities are independently audited every year.

She would not say whether the group has properly disclosed its grants in previous tax returns, which are often referred to as “990s.”

“LPTAD has relied, and will continue to rely, on its tax professionals to ensure full IRS compliance,” Alba said. “LPTAD has already provided the Orlando Sentinel copies of its Form 990s and has no further information to provide to you.”

Mayer, the Notre Dame law professor, said proper disclosure is crucial for members of the public to be able to follow the trail of dark money.

“The whole point of the reporting requirements is that if the public or government wants to trace the dollars, they can without having to open an investigation or do audits and all that sort of fun stuff that takes a lot of time and energy,” he said.

Let’s Preserve the American Dream has come under heightened scrutiny in recent months as more has emerged about its role in Florida’s 2020 ghost candidate scandal, which involved independent candidates who ran in three battleground Senate races in Central and South Florida.

The independent candidates did no campaigning themselves but were promoted by $550,000 in mailers designed by Republican consultants that depicted the independent candidates as progressive alternatives. Prosecutors say it was a ploy to siphon votes away from the Democratic candidates in the three races, all of which were won by Republicans, helping the GOP retain its majority in the 40-member state Senate.

Records obtained in the criminal investigation in Miami show that money Let’s Preserve the American Dream gave to Grow United paid for the mailers. And the political committees that sent them out were controlled by a Let’s Preserve the American Dream contractor.

In addition, another Let’s Preserve the American Dream contractor — former Republican state Sen. Frank Artiles — helped arrange the candidacies of two of the three independent candidates, both of whom ran in Miami-area Senate races. Prosecutors have charged Artiles with bribing one of those candidates to run; Artiles has pleaded not guilty and is awaiting trial.

Let’s Preserve the American Dream itself has not been accused of wrongdoing, though prosecutors recently revealed they are investigating the organization for possible election-law and campaign violations.

Let’s Preserve the American Dream Executive Director Ryan Tyson, who sat for an interview with prosecutors in September, has said that his organization complies with all laws and has cooperated with investigators.

He said his group canceled its contract with Artiles after he was arrested.

“During the 2020 election cycle, LPAD also worked with networks of non-profits from around the country to further issues and perspectives,” Tyson said earlier this month. “This work has drawn scrutiny; however, such work by non-profits is protected under the 1st Amendment and complies with both state and federal law.”

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