Dark money group linked to Leonard Leo is dissolved

Last updated on January 20, 2023

A dark money group tied to conservative judicial activist Leonard Leo was dissolved three days after POLITICO inquired about whether it helped to facilitate the multi-million-dollar sale of former White House senior adviser Kellyanne Conway’s polling company, paperwork filed in Virginia shows.

The BH Fund, which was formed in 2016 with an anonymous $24 million donation, has been a nerve center for distributing millions of dollars around Leo’s network of dark-money groups bolstering former President Donald Trump’s Supreme Court picks. On the day of the 2017 sale of Conway’s polling business to the firm Creative Response Concepts Inc., a lawyer filed similar liens with Virginia regulators for both CRC and BH Fund, which financial experts say suggested the dark money group played a role in financing the transaction, POLITICO reported in late December.

The deal, which Conway valued at between $1 million and $5 million on her federal filings, raised potential ethical concerns because Conway was simultaneously advocating with Trump for some of Leo’s favored judicial candidates.

But just three days after POLITICO’s inquiries, the BH Fund closed down, according to documents filed with the Virginia State Corporation Commission.

Adam Kennedy, a spokesperson for the firm now known as CRC Advisors, which had performed extensive consulting work for Leo in 2017 and is now ledby him, said the BH Fund has been dormant since the end of 2021. He confirmed it was dissolved in October “as other organizations made it obsolete.”

Indeed, Leo now controls more than $1.6 billion in conservative donor funds, and he is erecting a new architecture of dark-money groups to administer it. Critics have long maintained that understanding how Leo has distributed his trove of anonymous funds is critical to understanding how the conservative legal movement claimed a majority of the U.S. Supreme Court.

“Nothing screams ‘efforts to conceal’ quite like folding up an organization just as you start getting questions about it,” said Saurav Ghosh, director of federal campaign finance reform for the Campaign Legal Center, a nonpartisan nonprofit founded by a Republican former commissioner of the Federal Election Commission.

Currently, a Senate committee is reviewing a new complaint requesting an investigation into whether federal ethics rules or criminal laws were broken in Conway’s sale of her business, Senate aides confirmed.

Since POLITICO first contacted Leo and CRC last fall, they have not disputed BH Fund’s involvement in the transaction. In 2019, when asked about BH Fund for a Washington Post documentary, Leo said: “um, BH Fund is a charitable organization. You can look it up.” He continued: “I don’t waste my time on stories that involve money in politics because what I care about is ideas.”

Under the current tax code, nonprofits like BH Fund can spend unlimited amounts of money on political activities without disclosing their donors — as long as they are deemed “social welfare” activities that do not primarily promote a political candidate. Legislative attempts to close loopholes allowing dark money in U.S. elections have repeatedly failed over the past decade.

Leo’s apparent role in the sale of Conway’s business underscores why “influence of dark money is doubly problematic once someone is in office because they’re [potentially] able to influence outcomes,” said Ghosh.

In its complaint addressed to Senate Homeland Security and Government Affairs Committee Chair Gary Peters (D-Mich.), the Campaign for Accountability, a liberal watchdog group, cited a law barring executive branch employees from participating “personally and substantially” in any government matter affecting her or his own financial interests.

“There are clear indications based on the facts at hand that Ms. Conway participated personally and substantially in advising President Trump to nominate Justices to the Supreme Court, and that her personal financial interests were affected,” the complaint submitted to the Senate said.

Conway responded to the complaint in a text message to POLITICO: “That’s what outside groups ‘fighting for law and justice’ do to get attention. Use reporters,” she said.

On the day of the 2017 sale of Kellyanne Conway’s polling business to the firm Creative Response Concepts Inc., a lawyer filed similar liens with Virginia regulators for both CRC and BH Fund, which financial experts say suggested the dark money group played a role in financing the transaction.

CRC spokesperson Kennedy said “liberal watchdog groups” who filed the complaint should instead urge hearings on a company that ran administration and management for a liberal dark money network that fought Trump’s judicial nominations and spent millions around the 2020 election.

At the time of its purchase of Conway’s polling firm, CRC was also bringing in millions of dollars from Leo’s network of dark money nonprofits to promote his preferred court candidates, including at least $400,000 from BH Fund for “consulting.”

In 2020, Leo officially joined a newly rebranded CRC Advisors as a chair.

In an Oct. 21 email, POLITICO first approached CRC Advisors with a series of questions about the lien statements. Three days later, on Oct. 24, Jonathan Bunch, CRC Advisors president, signed articles of dissolution for BH Fund, according to documents filed with the Virginia State Corporation Commission.One day after the Dec. 20 story, an unsigned amendment terminating BH Fund’s 2017 lien was also filed with the commission.

Leo’s network of outside groups built successful advocacy campaigns around the nominations of Chief Justice John Roberts, Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett and blocked President Barack Obama’s nomination of Merrick Garland. BH Fund operated alongside two other Leo-linked entities to promote Trump’s nominees.

A flurry of House investigations into the Biden administration and the president’s son, Hunter, is expected to take center stage in the new Congress.

Yet Democrats still control the Senate and its oversight committees. And concerns about the role of dark money in shaping the court’s new conservative majority are growing louder after the new conservative majority overturned the 50-year precedent of a federal right to abortion.

The Conway transaction “is further evidence of the troubling role that Leonard Leo and the Federalist Society played in driving Donald Trump’s judicial selection process,” Sen. Dick Durbin (D-Ill.) said on Dec. 20 following POLITICO’s report.

The complaint sent to Sen. Peters, which stresses the importance of a quick response, also put the issue on the radar of law enforcement as it cc’d Department of Justice Public Integrity Section Chief Corey Amundson.

“It is all the more urgent that [the committee] investigate this matter because it is possible criminal charges against Ms. Conway may be precluded by the general five-year statute of limitations governing most federal crimes,” said the complaint.

Regardless, the matter should not be ignored, said Michelle Kuppersmith, the liberal watchdog group’s executive director.

“We want the Senate to make it clear you don’t operate like this” as a government official, she said in an interview. “Just like firefighters go in when they see smoke, it’s the Senate’s duty to investigate – for all the reasons we outlined in our complaint – to make it clear to government officials everywhere that potential wrongdoing will be investigated.”