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Where nonprofit, for-profit and super PAC met

Friday, Apr 6, 2018

* The Tribune published a long and meandering story today - which is really three or so stories in one that jump back and forth - about Dan Proft, Brian Timpone, John Tillman and others who were involved in one way or another with those ubiquitous Proft papers we’ve been discussing for months. Here’s part of the not-for-profit angle

Recently obtained documents and interviews show that an organization called Think Freely Media helped fund the operation that produced the [2016 article about a Liberty Principles PAC-backed statehouse candidate’s pitch to voters] for the East Central Reporter’s website. As a nonprofit, Think Freely is forbidden by federal law from engaging in politics, and it has described the articles it funded as news.

But State Board of Elections records also show a political committee, Liberty Principles, paid the same private company to publish the story in a print newspaper and mail it. That group, which state law says must spend its money on politicking, has labeled such content political ads. […]

Since 2015, thousands of articles have been published in more than two dozen print and online publications tied to Proft, who in addition to heading Liberty Principles has served as a [reported $100,000 annual] consultant to Think Freely Media. […]

[The Illinois Policy Institute’s John Tillman] also created Think Freely Media with the aim of touting the “benefits of limited government,” according to its IRS filing. In August 2015, the nonprofit began funding [Brian] Timpone’s Newsinator. Tax filings show that first round of cash amounted to $346,660. […]

“None of the content that was funded by TFM was political or electioneering in nature. To imply otherwise would be wrong,” [Think Freely Media’s president, Eric Tubbs] wrote.

But one group did say otherwise: Proft’s political committee, Liberty Principles. […]

The content complies with legal requirements for nonprofits and “TFM is not responsible for how a PAC uses it, characterizes it or otherwise mischaracterizes it as Ms. Svenson did,” Tubbs wrote in an email.

Essentially, if I’m reading this right, Tillman’s Think Freely paid for non-campaign stories run by Timpone’s Newsinator company. Newsinator paid for campaign-related stories. Proft, who has been a Think Freely consultant, then had his Liberty Principles PAC mail newspapers containing those one-sided Newsinator campaign stories to voters’ homes in races targeted by his PAC.

The papers have since been turned over to a new private company, Local Government Information, which is apparently controlled by Proft. Tipone’s Locality Lab now creates the content. The Tribune did not say whether Think Freely is currently involved.

Before the change, the operation appeared to be a cleverly intertwined web of a nonprofit social activist group, a for-profit business and a super PAC. The question, I suppose, is whether all the actors stayed strictly within their lanes back then and everybody remained independent and on the up and up. The Trib story doesn’t specifically answer either way.

* You may recall Think Freely from this February story

For example, in addition to his role as chief executive officer at the institute, Tillman is the board chairman and former president of Think Freely Media, another small-government nonprofit that once shared office space with the institute and received hundreds of thousands of dollars from it in grant money.

In 2015, Think Freely Media made a $49,400, no-interest loan to a for-profit data and marketing company called Crowdskout. That came a few months after the nonprofit loaned Crowdskout $60,000 plus interest. At the time, Tillman had “majority unit control” of the entity that owned Crowdskout, according to a financial audit of Think Freely Media.

Experts say such transactions raise ethical questions and could violate the federal tax code for nonprofits. A zero-interest loan would benefit the for-profit company at the expense of the nonprofit. […]

“Obviously, these are all fully disclosed transactions, all at fair market value as they should be,” Tillman wrote. “And yes, people and companies are paid for providing services. When I have had a role with an organization, that relationship must be properly disclosed to the board and I recused myself regarding any decisions made.”

- Posted by Rich Miller        

  1. - Annonin' - Friday, Apr 6, 18 @ 12:01 pm:

    It was fun to see the line that indicates Proft used the Tribbies direct mail unit to send the papers out.
    Surprised to see Katrina and Kassamoron no quoted on how wonderful these little newsoids are to hav around.

  2. - Profteering - Friday, Apr 6, 18 @ 12:04 pm:

    Did Putan base his operations on Proft or vice versa?

  3. - Honeybear - Friday, Apr 6, 18 @ 12:25 pm:

    Perfidy, perfidy,perfidy

    Eventually the truth gets out

  4. - Hamilton - Friday, Apr 6, 18 @ 12:52 pm:

    I respect the reporting here and more attention needs to be given to the relationship between not-for-profits (specifically 501c3s, 501c4s) for-profits, and various forms of PACs or 527s. That said, if the suggestion is that Proft is operating outside the law, then the Trib is chasing a something not all that remarkable. These practices and types of institutional relationships are common across the not-for-profit sector, liberal and conservative, and Tillman/Proft seem to be using common legal strategies to navigate them for their purpose.

    Again, highlighting the reality is an important topic for the press, but there isn’t anything compellingly unique here to Proft and friends.

  5. - anonymous - Friday, Apr 6, 18 @ 1:08 pm:

    == but there isn’t anything compellingly unique here to Proft and friends. ==

  6. - In Praise Of Long And Meandering - Friday, Apr 6, 18 @ 1:22 pm:

    Great piece, I think. If it seems long and meandering, that’s because these folks appear to have used every trick in the book to find loopholes and skirt the spirit, if not the letter, of the law. You have to go down rabbit holes if you want to catch a rabbit.

    End of day, rich Republicans and their henchmen appear to have gotten in bed with the brainchild behind Journatic, which was a proven purveyor of fake news–even traditional media, which should have known better, fled when the truth came out about that outfit.

    We need more stories like this, especially now.

  7. - Rich Miller - Friday, Apr 6, 18 @ 1:24 pm:

    === If it seems long and meandering, that’s because these folks appear to have used every trick===

    That’s an excuse, not a reason.

  8. - wordslinger - Friday, Apr 6, 18 @ 1:38 pm:

    Woof, that’s a lot of wandering around the barn. This desperately needs a seasoned editor to sharpen and focus.

    Any left in troncslyvania? Or did they all get canned to make room for the Audience Engagement Studio (is that like, photos for wedding announcements?) and the Quick Response Team (as opposed to the Lazy Procrastinator Unit?).

    Sounds like tronc management these days is thinking out of the box to provide synergy to buy in to core competency and shift paradigm to empower vertical integration.

    Translation: continuing to gut the newsroom.

  9. - Hamilton - Friday, Apr 6, 18 @ 3:34 pm:

    @anonymous 1:08 show your work, please; I might be missing something. Because even if I disagree with the purpose of their work, I do, even if I don’t like it, I don’t - it doesn’t make it unique or illegal. What should surprise us is that this approach is legal and fair play and that it is so common. That’s where the reporting is better focused.

  10. - anonymouss - Friday, Apr 6, 18 @ 3:56 pm:

    Don’t worry, I think your answer is coming. With every report, more is revealed. The stench is terrible.

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