Monday, July 10, 2023

THE NEO-FASCISM OF THE DEMOCRAT PARTY - Documents Provide Rare Glimpse Into How Arabella Advisors Exerts Centralized Control Over a Vast Left-Wing Advocacy Network

Documents Provide Rare Glimpse Into How Arabella Advisors Exerts Centralized Control Over a Vast Left-Wing Advocacy Network

July 10, 2023

The Student Experience Research Network sounds innocuous enough. The organization says it exists to "advance the research, relationships, and capacity necessary to build an education system in which every student experiences respect as a valued person and thinker."

In reality, the group funds research with the goal of promoting DEI practices in education and partners with other left-wing organizations to promote "inclusive mathematics environments" and push universities to abandon standardized tests. Earlier this month, the Student Experience Research Network took a victory lap after the University of California system said it would toss out the SAT in its admissions process.

The Student Experience Research Network and hundreds of other left-wing activist groups like it are controlled from the top down by Arabella Advisors, a for-profit consultancy that plays an integral role in Democratic causes, fueled by donations from billionaires including George Soros and Pierre Omidyar. The company, which distributes billions to Democratic pet projects, has established five tax-exempt nonprofit groups that pay Arabella a hefty fee—ostensibly for back-office work—and in turn operate a vast array of left-wing advocacy groups including the Student Experience Research Network.

In fact, the Student Experience Research Network’s ostensible employees don’t even work there. They are employees of an Arabella offshoot, the New Venture Fund. The average citizen would have no idea who’s pulling the strings.

This is the first of two reports based on internal Arabella documents obtained by the Washington Free Beacon. They provide a rare window into the inner workings of the Left’s dark-money network, revealing just how centrally controlled a vast swath of activist organizations are by a central clearinghouse based in the nation’s capital—as well as the lengths to which Arabella’s leaders go to disguise that control and create the illusion of grassroots political activism.

This is hardly the sort of relationship that Arabella and two of its offshoots, New Venture Fund and the Sixteen Thirty Fund, described to the IRS when seeking tax-exempt status.

The agency challenged New Venture Fund when it first applied for that status in 2006, over its obvious conflicts of interest with Arabella. At the time, Arabella founder and sole owner Eric Kessler served as both New Venture Fund’s chairman and president, and the New Venture Fund proposed paying Arabella a 5 percent overhead fee to handle administrative tasks. Arabella’s current ownership is unclear: It is owned by a Delaware business called Arabella Acquisition, LLC, which doesn’t disclose its ownership.

The IRS had concerns that New Venture Fund didn’t seek competing bids for the contract and that Kessler would reap illegal profits from his own charity. But the feds ultimately relented, granting the fund nonprofit status after Kessler claimed New Venture Fund’s contract with Arabella would last only a year, or until New Venture Fund could run its own human resources department.

"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," New Venture Fund told the IRS. "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."

Suffice it to say, the services are still flowing. What is true for the Student Experience Research Network is also true for hundreds of other activist groups, including Stop Deficit Squawks, Americans for Tax Fairness, the Institute for Responsive Government, Defend American Democracy, Fix our Senate, the Voter Engagement Fund, the Scholarly Publishing and Academic Resources Coalition, and hundreds of other groups—they are controlled by the Democratic elites who staff Arabella Advisors.

"If the New Venture Fund anticipated their agreement with Arabella Advisors to only be temporary when seeking a tax exemption, why has this arrangement continued for nearly two decades?" said Americans for Public Trust executive director Caitlin Sutherland. "For Arabella to collect over $200 million in fees for a ‘temporary’ agreement warrants a second look from the IRS."

Arabella’s five funds serve as fiscal sponsors of the network’s pop-up groups, organizations that exist for a brief period and then disband, often rallying support for or opposition to a particular political objective. Fiscal sponsorship is a unique arrangement that allows the initiatives to operate as nonprofit entities without disclosing their board members and obfuscates the sources of their revenue, expenses, or to whom they distribute grants. From protest movements to lobbying, if there is a new liberal pet cause, there is usually an Arabella group to advocate on its behalf.

Some of Arabella’s more prominent pop-up groups, such as Demand Justice, end up breaking away from the network and establish themselves as independent nonprofits. Others, such as Kansans for Secure Elections, SoCal Healthcare Coalition, and Justice March exist for a brief period and then disband.

Arabella’s former CEO, Sampriti Ganguli, has described the company as a humble business that provides human resources, accounting, and legal guidance to clients. However, the New Venture Fund’s employee handbook, obtained by the Free Beacon, paints a different picture of centralized control.

It reveals that Arabella controls New Venture Fund and its various pop-up groups with management teams of Arabella employees.

"NVF’s board of directors has hired Arabella Advisors, to provide staffing and management services," the handbook states. "Arabella Advisors provides support to NVF projects via dedicated oversight by a managing director (MD), an account manager (AM), accounting and financial services, and human resources support."

The account manager serves as the "first point of contact at NVF for all transactions and inquiries related to the project," according to the handbook. In some cases the manager has a team of Arabella employees assisting in the operations of a pop-up group.

Those teams, including the manager, are considered contractors. Therefore they are hidden from IRS disclosure forms and not listed as staff members of New Venture Fund or its pop-up groups.

New Venture Fund’s pop-up groups do not operate within typical nonprofit parameters outlined by federal law. They are effectively departments of the New Venture Fund and each of their employees are on the fund’s payroll. That means a group like the Student Experience Research Network or the Institute for Responsive Government doesn’t have its own employees, but rather, New Venture Fund employees under the guise of the Institute for Responsive Government. The same goes for the Compassion Project, the Alaska Venture Fund, the Healthy Voting Project, and countless other New Venture Fund "pop-up" groups.

IRS does not require New Venture Fund to report how many pop-up groups operate under its wings, let alone the names of the groups or how many of its employees work at each initiative. The fund employed 986 people in 2021, according to its tax return that year.

And the staff of New Venture Fund’s pop-up groups are prohibited from discussing their ties to the broader network, according to the fund’s employee handbook, which, according to the document’s metadata, was prepared in April 2019 by Arabella senior director Gideon Steinberg.

"In general, only staff with designated authority may represent NVF or its projects externally," the handbook states. "NVF staff should always clearly state the project they are representing and not imply that they are representing all of NVF unless explicitly authorized to do so."

New Venture Fund does not hide the ball from its employees. The handbook refers to itself as well as the network’s other funds—the Sixteen Thirty Fund, the Hopewell Fund, and the Windward Fund—as "managed organizations," each of which is overseen by a team of Arabella staffers.

The benefits of Arabella’s centralized control over the network are made clear to New Venture Fund employees. With Arabella in control, it can "coordinate collaborative initiatives between donors" and gain access to "expert philanthropic strategy development, execution, and evaluation support services."

In practice, this means Arabella can shuffle around big money between its funds, and it does: The network’s five funds passed a combined $189 million between themselves those two years, according to their tax returns.

Arabella’s funds hauled in a combined $3.3 billion in 2020 and 2021. Its primary political arm, the Sixteen Thirty Fund, doled out $61 million to Democratic Super PACs during the 2020 election cycle, second only to Majority Forward, a dark money group associated with Senate Democrats. The Sixteen Thirty Fund spent so much on politics in 2020 that the Federal Election Commission’s general counsel urged the commission in June 2022 to "find reason to believe" the fund violated federal law by failing to register as a political committee. The FEC, however, went against its attorney’s recommendation and closed the case in September.

More than a decade after New Venture Fund and the Sixteen Thirty Fund filed for nonprofit status, Arabella still controls the funds. Its management fee for some of them has increased to 15 percent. New Venture Fund ended 2021 with assets exceeding $1.2 billion and funneled nearly $30 million in service fees to Arabella. The Sixteen Thirty Fund, which ended 2021 with more than $97 million in the bank, paid Arabella more than $5 million the same year.