'I can't imagine attaching my name': How owners hide their political donations
The spotlight on political donations is bright, but there's a push among some ownership groups to avoid it.
Election 2020: How sports owners hide political donations from players and fans
The spotlight on political donations is bright, but there's a push among some ownership groups to avoid it. DARREN ABATE/EPA
7:00 AM ET
- Baxter HolmesESPN Senior Writer
DURING A RECENT weekend gathering, an NBA owner ranted to confidants about the upcoming presidential election. It was early fall, with the election between President Donald Trump and former Vice President Joe Biden still about a month away. The setting was idyllic: sunshine, the ocean, a ZIP code occupied by the affluent.
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"Listen," the owner mused, "I'm so worried about Biden's regulations, so I'm funding as much as I can privately and confidentially to get Trump reelected. I know he's crazy, and I hope Democrats take the House and the Senate, but then Trump can block stuff and protect us on the taxes and regulation."
The source who was present is involved in ownership groups across leagues, and that source relayed that moment in response to a question:
Are professional sports team owners making political donations privately, in ways that not only shield their identity but shield them from backlash from their own players, staffers and fans?
The answer was a resounding yes -- and it happens regularly.
"There's no question," the source said.
"The overwhelming majority of sports team owners are Republicans. And they are very concerned about taxes, obviously, and regulation for their businesses."
To drive the point home, the source, who spoke on the condition of anonymity, described attending NBA board of governors meetings, where politics has become a growing topic of conversation in recent years.
This is a group of 30 power brokers whose average net worth hovers in the neighborhood of about $2 billion. Their total wealth combined is upward of $140 billion -- more than the annual gross domestic product (GDP) of at least 130 countries. They're invested in a league whose annual basketball-related income, at least as of the 2017-18 and 2018-19 seasons, is more than $7 billion annually. But because of the coronavirus pandemic, the financial future of the league is murky. (And the same is true of the various industries that helped generate these owners' wealth.) If the adage about voting by pocketbook applies to anyone, it applies to these owners, perhaps more than ever.
How these team owners use those means has perhaps never been so scrutinized, especially with players calling for action from their team owners to push for social justice reform. The spotlight on political donations is bright; but according to the source involved with ownership groups, there's a push to avoid it, to donate privately and confidentially.
"Those conversations," the source said, "are happening daily."
MORE: What motivates billionaire owners to donate to campaigns?
Rockets owner Tilman Fertitta, right, is one of the NBA's biggest political donors, while Warriors' owner Joe Lacob hasn't made a publicly available contribution since 2012. Andrew D. Bernstein/NBAE via Getty Images
ACCORDING TO ESPN'S analysis of the available Federal Election Commission campaign donation data, professional sports team owners from the NBA, NFL, NHL and MLB have publicly contributed almost $45 million in disclosed donations to federal elections since 2015. That figure spans 144 owners and commissioners among 102 teams. Ten owners haven't made any such donations in that time frame, according to FEC data.
That is what is known.
But there is another way people can donate, and it's far more hidden: so-called "dark money" contributions, which are typically made via nonprofit organizations. A donator -- a team owner, for example -- who wishes to remain anonymous, can give to a nonprofit, which makes the donation in its name rather than that of the individual.
It's an avenue that is attractive to high-profile people who don't wish to alienate customers -- or fans and players, in the case of sports.
But like a regular citizen, a wealthy team owner cannot simply donate whatever he or she wishes. There are rules.
According to FEC guidelines, a person can give a maximum of $2,800 to a federal candidate in an election cycle -- or $5,600 total, including the primary and general election. The funds must be from a personal account, and the donation must be disclosed, which means the donator's name and the amount donated will become public.
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The donor could give to a super PAC -- a political action committee that can make independent expenditures to support that candidate and can accept unlimited donations -- but that too is publicly disclosed.
Enter dark money contributions.
People can donate funds -- as much as they would like -- to a 501(c)4 "social welfare organization." That's the IRS designation for the tax code that grants these groups nonprofit status; and unlike a candidate's campaign and super PACs, they don't have to disclose their donors. It is through these (c)4 groups -- the parlance used by those who study campaign finance -- that the majority of dark money flows.
How does it help your candidate? One example goes like this:
You donate $1 million to, say, America First Policies, a 501(c)4 that does not disclose its donors. America First Policies could then give $1 million to America First Action, a super PAC that does disclose its donors and is spending 100% of its money supporting Trump. At the end of this transaction, all the public knows is that America First Policies gave America First Action $1 million. The original source of the money is never disclosed, but the donor has been able to help the candidate by proxy.
Another option, according to U.S. Sen. Sheldon Whitehouse, a Democrat from Rhode Island who is a staunch critic of undisclosed spending, are "donor-advised" funds.
"These entities have no purpose other than as a screening intermediary through which funds flow," Whitehouse wrote in an email to ESPN. "In go huge contributions from a donor, with instructions on how the money should be spent; out the money goes to electioneering groups that can spend it with no true record of where the money originated."
The reasons to remain anonymous are many.
On one hand, a donor might simply want privacy. A donor might want to avoid being bombarded by calls to donate from other candidates within a certain political affiliation. A donor might want a candidate to do them a favor, and the donor would much prefer that it appear as if the candidate did such an act out of the goodness of his or her own heart rather than have the appearance that it was, in fact, transactional.
In today's climate, a donor also might want to avoid a boycott from customers and staffers -- and sports owners needn't look far for an example.
This is the era of high-profile boycotts, after all. Nike faced calls for a boycott after launching a national advertising campaign featuring former San Francisco 49ers quarterback Colin Kaepernick, who sparked a nationwide controversy by kneeling during the national anthem. An Oklahoma state representative, Sean Roberts, a Republican, warned the Oklahoma City Thunder that he would reexamine the team's tax benefits if their players kneeled. San Antonio Spurs coach Gregg Popovich told The New York Times in June that his anti-Trump comments after the election led to some Spurs fans canceling their season tickets.
On the other side of the aisle, Facebook has faced boycotts from advertisers and civil rights groups over its stance on political ads and its unwillingness to take down pages that spread misinformation. Florida shoppers planned boycotts of the supermarket chain Publix in 2018 after it donated $670,000 to a gubernatorial candidate who supported the National Rifle Association. California fast-food chain In-N-Out faced calls for boycotts after it donated $25,000 to the California GOP in 2018.
"[Take donating to] a cause like Planned Parenthood," a co-owner of an NBA team told ESPN, speaking only on the condition of anonymity. "There'll be a lot of people in the South that don't like that organization and a lot of people in the North that are fine with it. If you own a team in Oklahoma City, is donating to that gonna cause you issues?
"On most political issues in America," the co-owner continued, "50% of the people support the issue and 50% don't. And so do you want to alienate 50% of your fans potentially?"
DARK MONEY IS a hot trend, but it's by no means new. Undisclosed political donations started to rise in the wake of the Buckley v. Valeo U.S. Supreme Court case in 1976, which, in part, ruled that nonprofits could spend unlimited and undisclosed amounts of money on "issue advocacy" as a form of free speech. But a turning point came in 2010 in the Supreme Court's landmark Citizens United v. FEC case, which allowed the creation of super PACs, by ruling, in part, that political groups that did not coordinate with a candidate's campaign could raise and spend unlimited funds to influence voters near an election -- from corporations, CEOs and others.
"Once that dam broke, it just unleashed this massive amount of money into our political system," said Lisa Graves, executive director of True North Research and a former deputy assistant attorney general in the Office of Legal Policy at the U.S. Department of Justice.
Tracking owners' political donations
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Since that 2010 decision, roughly a billion dollars of undisclosed capital has flowed into election cycles. An estimate from the Center for Responsive Politics and the Wesleyan Media Project on Sept. 11, 2020, found that dark money groups have spent more than $182 million in political ads in the 2020 election cycle.
The person who spoke with ESPN who is close to several ownership groups said owners are quietly hoping for the status quo.
"Dark money and holding on to the opportunity to have silent money come into the system is what they're dreaming about," the person told ESPN. "That's the most important thing, and so they're like, 'We've got to get this nomination through.'"
Until then, the spending only increases. One Congressional campaign finance expert who spoke on the condition of anonymity estimated that the last election raised about $6 billion in spending -- a portion of which was undisclosed -- and that this upcoming election might nearly double that amount.
"It's not Republican or Democrats," said Charles Lewis, who founded the Center for Public Integrity, a nonprofit investigative journalism organization. "It's both. It's ugly, and it's uglier than ever."
"For me, I never wanted any impact [that] I do or don't have to be driven by money," Mavericks owner Mark Cuban, at right, told ESPN. EPA/ERIK S. LESSER
MAVERICKS OWNER MARK CUBAN has long been a heavy follower of politics, as vocal as perhaps any NBA owner. He has blogged about politics, and in 2016, he called a potential presidential run a "fun idea to toss around." He tweeted that he might run for Speaker of the U.S. House of Representatives. He formally endorsed Hillary Rodham Clinton for president at a rally in Pittsburgh. This past May, he voiced support for Biden during an appearance on Fox News and then endorsed him in June. Cuban frequently spars on Twitter with U.S. Sen. Ted Cruz, a Republican from Texas.
Yet when it comes to spending money on politics, Cuban is far more circumspect, according to ESPN's analysis of FEC campaign donation data. He made two donations totaling $6,000 in 1996 to support U.S. Sen. Orrin Hatch, a Republican from Utah, and he donated $1,000 in 2002 to support U.S. Rep. Zoe Lofgren, a Democrat from California.
That's it.
Cuban is among the aforementioned 10 owners in ESPN's analysis of FEC data -- and one of only four in the NBA -- who haven't made any such donations since 2015. Cuban said he hasn't made any undisclosed donations, either.
"No, never," he wrote to ESPN in an email. "For the same reason I don't donate to politicians. There are far better places to invest."
"I do find value in investing to get results for issues that are important to me," Cuban wrote in a separate email. "There are many charities and causes I give to. Sometimes I let them use my name. Most times I do not. There are many things in this life bigger than the NBA. Some things bigger than business. So I can see why other owners, like myself, would make choices that may not be popular today, hoping to achieve a desired goal, such as ending or at least reducing racism."
As Cuban suggests, there is, in the end, the question of value: What does a donation earn a donor anyway? To many experts, it's as simple as having some measure of influence, a proximity to power, the ability to develop a relationship with a politician.
"You'll have some access," one NBA owner said. "Somebody will pick up your call. Now will they do what you tell them? No."
There are ways to support candidates and causes beyond money, as Cuban has done. But historically, according to Lewis, a journalism professor at American University in Washington, D.C., who has studied campaign finance for decades, few things propel causes and candidates like the almighty dollar.
"The bottom line," Lewis said, "is money talks."
For those who own teams, such connections can be helpful if there are particular measures or policies that might affect, say, the building of a new arena.
It also can help yield a potentially prestigious post. Woody Johnson, the New York Jets owner, who has long donated to Republican candidates and causes, endorsed Trump in 2016 and became one of six finance vice chairmen tasked with helping raise $1 billion for Trump. In 2017, Trump named Johnson the U.S. Ambassador to the United Kingdom.
But there also is cachet, said Richard Briffault, a professor at Columbia Law School who specializes in election law. The chance to be invited to a dinner with the elected official, to take a photo with the official that looks nice framed on an office wall, to be kept in the loop on matters of import to the donor.
These donations are, in the end, a personal decision, as Cuban said.
"Every American citizen has to make their own choices about how they do or don't participate in the political process," he wrote in an email. "For me, I never wanted any impact [that] I do or don't have to be driven by money. Either there is value in the conversations I have with politicians or there isn't. There isn't [anything] much slimier than a politician undertaking an effort because I effectively paid them. I don't want any part of that."
For Cuban, it's simple. For others, such a decision has arguably never been more complicated.
"I can't imagine attaching my name to such a polarizing topic in terms of donations," said one member of an NBA ownership group. "At the end of the day, if I want to get my beliefs out there, I'm going to vote. I think that's ultimately contributing to change more than anything. If I put my name on something, how much influence is that really going to get me?
"And what's that worth when it's going to put my name out there in the press?"
