The man who engineered the takeover of the U.S. Supreme Court by far-right extremists now has an unprecedented amount of dark money at his disposal to steal the whole damned country. The New York Times reports on a stunningly corrupt deal Leonard Leo, the mastermind and former leader of the Federalist Society, set up last year to obtain a $1.6 billion—billion—windfall for a new political group. It’s a deal that’s legal thanks to the Supreme Court, and it’s funding a group that could help Republicans erase their fundraising deficit this election.
The deal Leo cooked up is super shady, which is no surprise. Here’s how it worked: Barre Seid, “an electronics manufacturing mogul,” donated 100% of the shares of Tripp Lite, his electrical device manufacturing company, to Leo’s new dark money group, Marble Freedom Trust. Right after the donation of those shares, the company sold to an Irish-American conglomerate called Eaton for $1.65 billion. Tripp Lite is a private company that doesn’t have to disclose financials. Eaton is publicly traded multinational that is headquartered in Dublin, Ireland. The proceeds of the sale went entirely to Marble Freedom Trust, which allowed Seid to avoid paying taxes on that $1.65 billion.
Which is likely the largest one-time, single-source political donation ever made. As Brendan Fischer, deputy director of investigative news project Document, says, Leo “now controls an astonishing $1.6 BILLION that he can use to reshape our political system. With this fortune, Leo can maintain and even grow his singular influence in near perpetuity.”
Sen. Sheldon Whitehouse of Rhode Island, who has been fighting a losing battle against dark money and its influence—particularly on the judiciary—tweeted: “The dark money machine heats up, and of course around the guy who used dark money to capture the Supreme Court for big special interests. All the more need for DISCLOSE vote.” That’s his legislation to require more disclosure of political donations by corporate entities.
“When this money lands in races,” Whitehouse added, “you can bet it will be well hidden behind phony front groups.”
“After stacking the federal courts with conservative friends and allies, Leonard Leo has single-handedly amassed a $1.6 billion dark money slush fund that will dwarf Democratic spending for years to come,” Mark Joseph Stern, Slate’s court reporter, tweeted. “An extraordinary manipulation of loopholes in tax and campaign finance law.”
“This is how you could drive a convoy of trucks through the prohibition on foreign money in US elections,” Michael McDonald wrote. He’s an American election specialist and professor at University of Florida. “Create a shell corporation, have Putin buy for $1 billion and then transfer the company to a dark money Super PAC before the sale finalizes.”
Because as of right now, in large part thanks to Leo’s Supreme Court, this whole scheme between Leo and Seid is legal. Ray D. Madoff, a professor of tax law at Boston College who is the director of the school’s Forum on Philanthropy and the Public Good, confirmed that it was allowed, even though it stinks of a tax avoidance scheme. “These actions by the super wealthy are actually costing the American taxpayers to support the political spending of the wealthiest Americans,” Madoff told the Times.
The Times points out that “the $1.6 billion that the Marble trust reaped from the sale is slightly more than the total of $1.5 billion spent in 2020 by 15 of the most politically active nonprofit organizations that generally align with Democrats.” One group, Leo’s group, will have all that money and can leverage all that money for the foreseeable future, unless Congress does something about it.
What Congress needs to do goes way beyond passing the DISCLOSE Act. They also need to fix the Supreme Court that opened the floodgates to this chicanery in the first place with the Citizens United decision. All those justices that Leo got onto the court—and the lower courts that he helped Sen. Mitch McConnell pack—are going to stop any legislation a Democratic Congress and president could enact. This is precisely the system they intended to create.
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