Dark money group linked to Leonard Leo is dissolved

A dark money group tied to conservative judicial activist Leonard Leo was dissolved three days after POLITICO inquired about whether it helped to facilitate the multi-million-dollar sale of former White House senior adviser Kellyanne Conway’s polling company, paperwork filed in Virginia shows.

The BH Fund, which was formed in 2016 with an anonymous $24 million donation, has been a nerve center for distributing millions of dollars around Leo’s network of dark-money groups bolstering former President Donald Trump’s Supreme Court picks. On the day of the 2017 sale of Conway’s polling business to the firm Creative Response Concepts Inc., a lawyer filed similar liens with Virginia regulators for both CRC and BH Fund, which financial experts say suggested the dark money group played a role in financing the transaction, POLITICO reported in late December.

The deal, which Conway valued at between $1 million and $5 million on her federal filings, raised potential ethical concerns because Conway was simultaneously advocating with Trump for some of Leo’s favored judicial candidates.

But just three days after POLITICO’s inquiries, the BH Fund closed down, according to documents filed with the Virginia State Corporation Commission.

Adam Kennedy, a spokesperson for the firm now known as CRC Advisors, which had performed extensive consulting work for Leo in 2017 and is now led by him, said the BH Fund has been dormant since the end of 2021. He confirmed it was dissolved in October “as other organizations made it obsolete.”

Indeed, Leo now controls more than $1.6 billion in conservative donor funds, and he is erecting a new architecture of dark-money groups to administer it. Critics have long maintained that understanding how Leo has distributed his trove of anonymous funds is critical to understanding how the conservative legal movement claimed a majority of the U.S. Supreme Court.

“Nothing screams ‘efforts to conceal’ quite like folding up an organization just as you start getting questions about it,” said Saurav Ghosh, director of federal campaign finance reform for the Campaign Legal Center, a nonpartisan nonprofit founded by a Republican former commissioner of the Federal Election Commission.

Currently, a Senate committee is reviewing a new complaint requesting an investigation into whether federal ethics rules or criminal laws were broken in Conway’s sale of her business, Senate aides confirmed.

Since POLITICO first contacted Leo and CRC last fall, they have not disputed BH Fund’s involvement in the transaction. In 2019, when asked about BH Fund for a Washington Post documentary, Leo said: “um, BH Fund is a charitable organization. You can look it up.” He continued: “I don’t waste my time on stories that involve money in politics because what I care about is ideas.”

Under the current tax code, nonprofits like BH Fund can spend unlimited amounts of money on political activities without disclosing their donors — as long as they are deemed “social welfare” activities that do not primarily promote a political candidate. Legislative attempts to close loopholes allowing dark money in U.S. elections have repeatedly failed over the past decade.

Leo’s apparent role in the sale of Conway’s business underscores why “influence of dark money is doubly problematic once someone is in office because they’re [potentially] able to influence outcomes,” said Ghosh.

In its complaint addressed to Senate Homeland Security and Government Affairs Committee Chair Gary Peters (D-Mich.), the Campaign for Accountability, a liberal watchdog group, cited a law barring executive branch employees from participating “personally and substantially” in any government matter affecting her or his own financial interests.

“There are clear indications based on the facts at hand that Ms. Conway participated personally and substantially in advising President Trump to nominate Justices to the Supreme Court, and that her personal financial interests were affected,” the complaint submitted to the Senate said.

Conway responded to the complaint in a text message to POLITICO: “That’s what outside groups ‘fighting for law and justice’ do to get attention. Use reporters,” she said.

On the day of the 2017 sale of Kellyanne Conway’s polling business to the firm Creative Response Concepts Inc., a lawyer filed similar liens with Virginia regulators for both CRC and BH Fund, which financial experts say suggested the dark money group played a role in financing the transaction.