Thursday, October 10, 2013

How NOM is washing transactions through ActRight

On November 8, 2011 Joe Solmonese, then president of the Human Rights Campaign, sent a letter to Jay Rothman, CEO of the law firm Foley & Lardner (see below). Therein, Mr. Solmonese advised Rothman that the corporate equality rating of Foley & Lardner was destined to drop from 100 in 2011 to 60 in 2012 due to the firm's engagements on behalf of National Organization for Marriage. Foley's CEI rating did, in fact, decline to 60 in 2011. In 2013, Foley & Lardner received a 100 rating in HRC's CEI.

According to campaign disclosures, on June 30. 2013 Foley & Lardner received $20,000 (presumably a retainer) from an affiliated organization, ActRight Fund, which is run by Brian Brown out of NOM's office. This sum was financed directly by a donation to ActRight from the Castor Family Fund. The Castor family were among the largest donors to the Proposition 8 campaign. Foley's fee might as well have come directly from NOM. Castor was the only significant donor for the six month period with a $30,000 contribution. Total contributions amounted to only $36,000.
I am a retired CEO. I realize that a $20,000 retainer is relatively inconsequential. At a firm like Foley it might cover 20 to 30 hours of actual work. Nevertheless, I think that that it appears as if Foley & Lardner is trying to do business with NOM without taking their money directly.

Cleta Mitchell
Cleta Mitchell
As Solmonese pointed out, Cleta Mitchell, a Foley partner, not only did legal work for NOM but was also their registered lobbyist in Minnesota. In other words, the firm can be doing work for NOM in, say, Illinois without naming NOM as their client.

Cleta Mitchell is the lead counsel for NOM's suit against the IRS along with two other attorneys from Foley. If used for that purpose, why cycle it through ActRight? Why, in fact, would Foley accept a check from ActRight for representation of NOM. Furthermore, this would demonstrate that NOM intended to sue the IRS three months before they did so. ActRight Legal Foundation is also representing NOM in the IRS suit. How many lawyers does NOM require? Why augment the Foley firm, which has an office in DC, with lawyers from Indiana? It just makes no sense unless NOM has a vested interest in the success of ActRight Legal Foundation. Meanwhile, donors are picking up the tab. That $20,000 might not even cover the costs of drawing up the summons & complaint and filing the suit.

ActRight Legal Foundation

Things get rather incestuous. ActRight Legal Foundation seems to have been formed by Barry Bostrom. Bostrom had been a name partner at Bopp, Coleson and Bostrom (now the Bopp Law Firm) in Terre Haute, Indiana. Bopp had represented NOM as recently as 2012 in a number of matters, including the release of donors in Maine and Minnesota. Kaylan Phillips who handled the Maine case for NOM (on behalf of Bopp) is also now with ActRight Legal. ActRight Legal lists two consulting attorneys. They are Cleta Mitchell and NOM's board chairman, John Eastman. ActRight Legal is a 501(c)3 non-profit.


There are at least three ActRight entities with significant transactions that are seemingly neither political organizations nor 501(c)3 non-profits. These include ActRight Action, ActRight Engagement and ActRight Services — all out of NOM's office. In the first quarter of 2012, Terrence Castor donated $500,000 to ActRight Fund. $400,000 of that went to ActRight Action.  Where did that money go?

In addition to ActRight Fund there are three other political organizations; ActRight Wisconsin Conduit, ActRight Non-federal Fund and ActRight Virginia.

Two other entities are listed as affiliates or "connected" in the initial filings of the political organizations. These are ActRight Educational Trust Fund and simply ActRight which is listed alongside ActRight Fund indicating that it is a separate entity. I can find no additional information on these two.

Questionable Transactions:

There are many transactions that stand out. For example, over $100,000 has gone to RBM Strategies with a PO box in Chicago. The initial payment of $85,000 was for website design. I am not the world's most proficient Googler but I cannot find anything for RBM strategies, which is odd for a web developer. Could that be "Robby, Brian, Maggie?"

In October. 2012, ActRight Fund paid ActRight Action (now with an Indiana address) $40,000 as a loan repayment. $30,000 went to ActRight Engagement in August of 2012 to design and build a website for Catholics2012 which, of course, doesn't seem to have filed as a political organization.

While it could be part of a group filing, if ActRight Engagement is not a 501(c)3 nor a political organization then is it a for-profit? Is it possible that Brian and others are padding their checking accounts at the expense of NOM's donors? Paul Bothwell is (see next paragraph). Why not Brian Brown?

Another little tidbit:

Turns out that Paul Bothwell, Brian Brown's "executive assistant" and (I believe) Maggie Gallagher's brother-in-law, is receiving an additional $1,200 a month out of ActRight for some time in addition to his NOM salary.

In summary, it appears as if NOM has deliberately created a financial maze. Once caveat to all of this is that most of this information comes from the IRS. Not finding an entity listed as a 501(c)3 or political organization is not dispositive due to the many known failures related to the IRS database.

Joe Solmonese Letter Foley and Lardner by David Hart
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