Liberal dark money giant faces IRS complaint for alleged bait-and-switch.

Watchdog Asks for Investigation‍ into Arabella Advisors Following Free Beacon Report on ⁣Group’s Alleged Misdeeds

A watchdog group is demanding an investigation into the liberal ‌dark​ money⁤ behemoth Arabella Advisors​ after a ⁤ Washington Free Beacon report exposed the shadowy organization. Americans for Public Trust has filed an IRS complaint ‌accusing ⁢Arabella ⁢and its founder, Clintonworld insider Eric Kessler, of deceiving authorities to gain⁣ control of ⁢five dark money​ funds that have since funneled billions of dollars ⁤into Democratic pet projects. Despite claiming to offer only‌ temporary administrative support, Arabella has maintained​ control over these funds for ​nearly two decades, pocketing a staggering $330 million in management fees.

“Eric Kessler has created one of the most intricate and sophisticated⁣ dark money networks influencing ‌U.S. politics and policy‍ today,” stated Caitlin Sutherland, executive director of Americans for Public Trust. “Now,‍ it seems ⁤he misled ‍the IRS and⁤ may have illegally ​profited by redirecting nonprofit funds back​ into‌ his ⁢own pocket through Arabella Advisors.”

In 2006, when the ⁤charity sought a tax-exempt charter, the​ IRS expressed concerns that Kessler would derive illegal profits from the largest of Arabella’s funds,⁣ the New Venture Fund. The IRS⁣ questioned why the charity didn’t seek bids from other administrative support contractors,​ considering Kessler’s control over both Arabella and ​the‍ fund. However, the IRS eventually approved the arrangement after the New Venture Fund claimed its ⁢contract with Arabella would expire after a year.

“The Advisors are providing management and administrative ​support services until such time as the Organization⁤ has sufficient financial resources to⁤ make the operation of its own back office cost-efficient,”‌ stated the New Venture Fund in its application for tax-exempt status.⁤ “Further, the ⁤Agreement is anticipated ⁣to⁤ be temporary and, indeed, only​ has a one-year term. As⁢ soon after this period as the Organization ‍has adequate funding, it would ​no longer require the⁣ services of the Advisors.”

In hindsight, Americans for Public Trust finds these ‍claims “laughable⁢ and disingenuous.” The​ New Venture Fund has since paid Arabella $166 million in ⁢management fees. According to its tax returns, the fund raised nearly a billion dollars in 2021 alone.

“The substantial revenue sums reported by​ NVF in ‍recent years are somehow deemed insufficient to finance the group’s in-house administrative support services, which is both‌ laughable and disingenuous,” stated the watchdog in its IRS‌ complaint.

This complaint ‌follows the Free Beacon‘s revelation of internal Arabella records, which exposed ‍the consultancy’s top-down control over its ‍dark money funds, contradicting the company’s public claim of being a⁣ humble back-office support contractor.

Arabella spokesman Steve Sampson dismissed the complaint as “meritless”​ and accused Americans for Public‍ Trust of having​ an ‌agenda. He stated, ​”We pride ourselves on​ helping our clients identify efficiencies, saving them tens⁣ of‌ millions of dollars in operational⁢ costs and allowing them to focus their resources on their intended‌ impact. We ⁣are ⁤compensated in ⁢exchange for a series ⁤of robust‍ administrative and operational ‍services, including HR, compliance, accounting, and grants ⁢management, and‌ our success over the years is ⁣a testament to the services and ⁢expertise⁢ we provide.”