# Iowa Future Fund

Bleeding Heartland Year in Review: Iowa politics in 2008

Last year at this time I was scrambling to make as many phone calls and knock on as many doors as I could before the Iowa caucuses on January 3.

This week I had a little more time to reflect on the year that just ended.

After the jump I’ve linked to Bleeding Heartland highlights in 2008. Most of the links relate to Iowa politics, but some also covered issues or strategy of national importance.

I only linked to a few posts about the presidential race. I’ll do a review of Bleeding Heartland’s 2008 presidential election coverage later this month.

You can use the search engine on the left side of the screen to look for past Bleeding Heartland diaries about any person or issue.

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Help Iowa Democrats respond to the American Future Fund

The Des Moines-based American Future Fund is exploiting loopholes in rules governing political advocacy groups in order to run campaign advertising in targeted races without disclosing its donors.

The Des Moines Register provided the latest evidence in this article from Saturday’s edition: “National group airs ads on Iowa House.”

For background on the American Future Fund, a 510(c)4 organization “formed to provide Americans with a conservative and free market viewpoint,” you can read this piece by Iowa Independent’s Jason Hancock, this TPM Cafe story by Mrs. Panstreppon, or Paul Kiel’s report for TPM Muckraker.

The American Future Fund is associated with heavy-hitters in the field of campaign advertising. Its media consultant is Larry McCarthy (creator of the 1988 Willie Horton ad), and its legal consultant is Ben Ginsberg (who was involved with the Swift Boat Veterans for Truth in 2004).

Representatives for the American Future Fund deny that the group seeks to influence elections. For that reason, they are not subject to campaign disclosure rules governing political action committees and other groups that make independent expenditures during election campaigns.

However, the American Future Fund’s radio and television commercials this year have focused on candidates running in competitive Senate races, such as Republican incumbent Norm Coleman of Minnesota, Democratic candidate Mark Udall of Colorado, and Democratic candidate Jeanne Shaheen of New Hampshire. You can view many of those ads at the AFF’s You Tube channel. Note that while these commercials ostensibly are focused on generating phone calls in support of a particular issue position, they haven’t been aired in states without a contested Senate seat.

Now the AFF is weighing in on key Iowa legislative races. From yesterday’s story in the Des Moines Register:

On Wednesday [October 29], AFF launched television ads in Iowa that criticize Democratic Reps. McKinley Bailey of Webster City, Paul Shomshor of Council Bluffs, Elesha Gayman of Davenport and Art Staed of Cedar Rapids. All four are incumbents struggling to hold onto their seats in the face of strong Republican challengers.

Other ads that compliment Republican Reps. Doug Struyk of Council Bluffs, Jamie Van Fossen of Davenport and Dan Rasmussen of Independence. Struyk is a Republican leader whose opponent has spent little; the other two are dealing with strong Democratic challengers.

AFF’s spokesman explained the timing of the political messages by saying it took months to compile analysis on the legislative session, which ended in April.

What an amazing coincidence. Analysis about legislative action completed more than six months ago resulted in television ads that appeared six days before a general election.

In another amazing coincidence, the AFF’s ads happen to focus on candidates running in six battleground districts being targeted by both parties. Dozens of legislators who voted the same way on those issues, but represent uncompetitive districts, are not subject to AFF’s advertising blitz.

I could only find two of the American Future Fund Iowa’s tv ads on You Tube. One praised the Republican incumbent in Iowa House district 81, Jamie Van Fossen, and the other criticized the Democratic incumbent in House district 9, McKinley Bailey.

It’s worth noting that while urging viewers to call legislators, these ads give the phone number for the switchboard at the State Capitol. However, the switchboard is currently closed, because the legislature is not in session. The AFF spokesman explained that the law requires advertisements to use official phone numbers, but he is evading the issue.

These commercials cannot be intended to generate citizen communication with legislators if they are giving a phone number that no one is currently answering.

Clearly the AFF selected the subjects and timing of their advertising in order to influence the outcome of legislative elections in Iowa. (The Republican Party of Iowa is concentrating its resources on making gains in the Iowa House, where Democrats have only a 53-47 majority.)

The tv ads direct viewers to the web site of the AFF’s Iowa chapter: www.iowa.americanfuturefund.com.

AFF spokesman Tim Albrecht

told The Des Moines Register last month that AFF is a group that focuses solely on national issues. “At that time we were, but after a lot of analysis and reviewing what had occurred in the last legislative session, we decided to open an Iowa chapter,” he said.

It is AFF’s first state-based chapter in the country, said Albrecht, who is a former spokesman for Iowa Republican legislative leader Christopher Rants and AFF’s only paid staff member.

Earlier this year, the Iowa Future Fund was incorporated by the same people behind the American Future Fund, and the Iowa Future Fund ran television ads criticizing Democratic Governor Chet Culver. (Here is one of the Iowa Future Fund’s ads against Culver.) In March, the Iowa Democratic Party called for an investigation into the Iowa Future Fund’s advertising campaign and failure to disclose donors. In April, a press release announced the creation of the Iowa Progress Project to replace the Iowa Future Fund. In theory, the the Iowa Progress Project was going to focus on state issues, while the American Future Fund focused on national issues.

It is unclear why the American Future Fund decided to create an Iowa chapter, rather than have the Iowa Progress Project pay for television commercials about Iowa House incumbents. If anyone has any information regarding the Iowa Progress Project or the decision to create an AFF Iowa chapter, please post a comment or send me a confidential e-mail (desmoinesdem AT yahoo.com).

Can anything be done to force the AFF to disclose who is paying for these commercials? Charlie Smithson, executive director of the Iowa Ethics and Campaign Disclosure Board, told the Des Moines Register that his office had received a complaint about the ads, but that campaign disclosure laws do not apply because the AFF ads do not urge viewers to vote for a candidate.

Mr. desmoinesdem has extensively researched election law and tells me that one relevant case in this area is Federal Election Commission v. Wisconsin Right to Life. Wisconsin Right to Life was running ads urging people to contact their senators about judicial filibusters. Senator Russ Feingold was up for re-election, and the ads did not urge people to vote against him, but the FEC considered them “sham issue ads” that were intended to influence an election and therefore were subject to regulation by the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold).

The Supreme Court had previously upheld McCain-Feingold’s provisions on political advocacy ads (in the McConnell vs. FEC case), so the key question was whether Wisconsin Right to Life’s ads were the kind of political advocacy Congress can regulate. With Chief Justice John Roberts writing for the majority, the court

held that McConnell v. FEC did not establish the test that any ad intended to influence an election and having that effect is express advocacy. Such a test would be open-ended and burdensome, would lead to bizarre results, and would “unquestionably chill a substantial amount of political speech.” Instead, the Court adopted the test that “an ad is the functional equivalent of express advocacy only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.” The Court further held that the compelling state interests invoked by the government to regulate advocacy did not apply with equal force to genuine issue ads. Neither the interest in preventing corruption nor the goal of limiting the distorting effects of corporate wealth was sufficient to override the right of a corporation to speak through ads on public issues. This conclusion, the Court held, was necessary in order to “give the benefit of the doubt to speech, not censorship.” The dissent by Justice Souter called WRTL’s ads indistinguishable from political advocacy ads and accused the majority of implicitly overruling McConnell v. FEC.

I agree with Souter’s position that so-called issue ads targeting candidates in key races shortly before elections are really political advocacy ads subject to McCain-Feingold. If the American Future Fund were mainly trying to influence Iowans’ views on issues, they wouldn’t be running their commercials only in battleground districts. Also, the timing of the ads only makes sense in the context of this Tuesday’s election. As I mentioned above, no one is currently answering the phone number AFF asks viewers to call.

But Smithson has to look at the AFF’s Iowa advertising from a narrow legal perspective. Clearly the ads are promoting favorable opinions about some Republican incumbents and unfavorable opinions about some Democratic incumbents. But as long as the ads urge people to call a telephone number (even a non-working one), courts would probably not hold that the commercials have “no reasonable interpretation other than as an appeal to vote for or against a specific candidate.”

I am not an expert on election law or disclosure requirements for 501(c)4 organizations. Perhaps there is some way Congress could require more financial disclosure of 501(c)4s so that they would not be able to run campaign ads with no accountability.

I don’t know the solution, but I do know that we can help Democrats fight back against the American Future Fund’s ad campaign by giving to the Iowa House Democrats’ Truman fund or to the following individual candidates:

McKinley Bailey (incumbent in House district 9)

Art Staed (incumbent in House district 37)

Elesha Gayman (incumbent in House district 84)

Paul Shomshor (incumbent in House district 100)

Phyllis Thede (challenger in House district 81)

Gene Ficken (challenger in House district 23)

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Are Bruce Rastetter and the Iowa GOP laying a trap for Tom Harkin?

(I'm skeptical than any prominent Republican would want to take on Harkin this year, but this diary has original research and is worth promoting. - promoted by desmoinesdem)

A number of signs indicate that Rastetter has been be quietly gearing up for a campaign for quite awhile. His involvement in Iowa Future Fund, the shady 501(c)(4) that ran anti-Culver ads, was my first clue. (I first posted about Rastetter and IFF/IPP at Bleeding Heartland here.)

Another clue was that someone privately registered “brucerastetter.com” and “brucerastetter.org” in early December 2007. 

An even bigger clue was that Rastetter hired Nicholas T. “Nick” Ryan in January 2007. Ryan had just come off a stint as campaign manager for Jim Nussle's failed gubernatorial bid.

Bruce Rastetter is CEO of  Hawkeye Energy Holdings, Iowa's largest ethanol producer and the third largest in the nation. In September, the Cyclone Conservative commented that “a Rastetter candidacy would also be attractive because Rastetter would carry a tremendous amount of gravitas on renewable fuels and agriculture issues.”

CC also speculated that Rastetter's $1.75 million gift to Iowa State University was a political ploy to garner favorable publicity for Rastetter, the candidate. Sounds plausible to me.

If Rastetter runs, Iowa Dems can expect an enormous amount of money to be poured into his campaign, both on and off the books. The  probable reason for the secrecy about Rastetter's intentions is to catch Tom Harkin and Iowa Dems off guard about how stiff Harkin's competition will be in terms of the candidate and money.

Richard O. Jacobson, founder of Jacobson Companies, is chairman of Hawkeye Energy. Jacobson kicked in $50k to Nussle in '06.

Rastetter is very close to Peter M. Castleman, chairman of J. H. Whitney & Company, a private equity firm based in Connecticut. Rastetter is also linked to Whitney partner, Russell Stidololph, through Altenergy LLC. Nick Ryan uses nryan@alternergyllc.com

Thomas H. Lee Partners, a Boston private equity firm, has a majority stake in Hawkeye Energy. Expect financial support for Rastetter from the THL partners.

At one point, Rastetter and his partners at J. H. Whitney planned to make a $200 million investment in Iowa wind farms but not much as been mentioned about it recently. I am particularly curious about the wind farms because I read yesterday that T. Boone Pickens is investing $10 billion to create a chain of wind farms that stretches from Texas through the Great Plains. 

If Pickens is behind Rastetter, Iowa Dems are in big trouble. In 2004, Pickens contributed $1 milion to Swift Boat Vets and $2.5 million to Progress For America, another 527, that raised $48 million. The DCI Group, the premier Republican slime shop, was behind PFA.  

I strongly suspect that Iowan, Brian Kennedy, is managing Iowa Future Fund/Iowa Progress Project. Kennedy, a DCI Group exec, is co-founder of PFA. More on the link between the DCI Group, the Iowa Future Fund and its affiliate, the American Future Fund here.

Kennedy made a failed primary bid for an Iowan congressional seat in 2006. He is also the former chairman of the Iowa Republican Party.   

The brucerastetter.com website lists 400 Locust Street, Suite 330, Des Moines, IA 50309 as its address. I checked the online phonebook and couldn't find an organization specifically listed in Suite 330 but I did find Summit Capital Group at Suite 480.

Summit Capital, a Rastetter company, is the one that employs Nick Ryan. Although Ryan claimed he was first employed by Summit Capital in January 2007, Summit Capital was only registered with the Iowa Secretary of State on February 21, 2007.

The Arag Group, curiously enough, is also listed at 400 Locust St, Suite 480.

That's it for me and Bruce Rastetter for the moment but first a question. If I am right about Rastetter running, did Rastetter violate any campaign laws by raising money without declaring his candidacy? Me, I'd go after Rastetter with a chainsaw if I were an Iowa Dem.

(Crossposted at TPM Cafe)  

Update: As senateguru noted in the comments, the deadline to register for the June senate primary has passed. But let's take a look at the candidates who did register: George S. Eichhorn, Christopher Reed and Steve Rathje.

Steve Rathje is the only candidate to register his campaign committee with the FEC. Since he registered in September 2005, he has raised $123k which came mostly from relatives, friends and Rathje personally. At 3/31/08, Rathje had a whopping $7k in cash on hand.

Compare Rathje's fundraising to that of Harkin's 2002 opponent, Greg Ganske. At 3/31/02, Ganske had $1.3 million in cash on hand and had spent $800k in the first quarter of 2002 alone. Ganske ultimately spent a total of $5 million vs Harkin's $8 million.

Interesting that Rathje's website is on the National Republican Party's server of choice, Smartech. Smartech was host to the off-record email accounts of many White House staffers and many of the so-called “missing” emails went through Smartech's servers.

Conventional Iowa wisdom is that the Republicans won't run a strong candidate against Harkin but this field of candidates is so pathetic, it lends strength to my argument that Rastetter could very well make a surprise run. I just don't know enough about election law to know if it is doable.  What if all three primary candidates dropped out?

If anyone can tell me more about Harkin's likely opponent, I'd appreciate it. I'd appreciate it even more if anyone knows how the prospective candidate will raise a few million bucks to run a respectable race.   

Iowa Progress Project is the new Iowa Future Fund!

(Thanks to Mrs. Panstreppon for researching this subject and keeping us up to date.   - promoted by desmoinesdem)

Late yesterday, Dave Kochel issued a press release announcing the formation of Iowa Progress Project, a 501(c)(4) which will replace Iowa Future Fund. Iowa Future Fund is the mysterious organization running anti-Chet Culver ads. Iowa Progress Project is so new, it was only registered with the Iowa Secretary of State on 4/10/08.

Why Iowa Progress Project? Because it is similar to Iowa Policy Project, a respectable undertaking. Iowa Future Fund was the name of a lapsed Iowa Democratic PAC. In 2006, Republican operative Roger Stone sent out pro-Rick Santorum campaign mailers to Pennsylvania voters using Progressive Policy Council which was very similar to the left-leaning Progressive Policy Institute. 

Replacing Iowa Future Fund with Iowa Progress Project might be a direct response to recent questions here in Bleeding Heartland and elsewhere in the blogospehere as to whether wealthy Iowan businessman, Bruce Rastetter, funded IFF.

Bruce Rastetter is president of Hawkeye Renewables which owns and operates four ethanol plants in Iowa. He also is invested in the wind energy industry. From what I have learned so far, Rastetter is partners with some very wealthy private investors on the East Coast through AltEnergy LLC, located in Royaton, Connecticut. Russell Stidolph, head of AltEnergy, has been operating in Iowa since at least 2003 and probably provided the financial backing for Hawkeye Renewables.

Nicholas T. “Nick” Ryan, Jim Nussle's long time campaign manager, now works for Bruce Rastetter. Ryan  is somehow connected to AltEnergy LLC and uses the email address, nryan-at-altenergyllc.com. Ryan's p.o. box was listed on an American Future Fund ad buy in Minnesota.

From the IPP website

“Des Moines, IA — Iowa Progress Project announced today its formal organization and outlined its goals and objectives in the near and long-term.

President David Kochel said, “Iowa Progress Project is the direct result of the response thousands of Iowans have had to ads and issues highlighted by the Iowa Future Fund. While the Iowa Future Fund has been very effective at highlighting important issues in our state, what was also abundantly clear is that a grassroots-centered conservative issues organization is also needed in this state. IPP will provide citizens from all corners of Iowa a voice in their community and state.”

IPP announced the following Board of Directors for the organization:

President: David Kochel
Director: Kathy Pearson
Director: Gary Grant

Gary Grant is possibly the vice-president of Public Affairs Co.

Kathy Pearson is possibly the former president of the Iowa Federation of Republican Women and the president and sole employee of Kaas Employment Services in Cedar Rapids.

I'm not an Iowan but I am interested in IFF and IPP because they are linked to a well-organized national Republican program to misuse 501(c)(4)s during the upcoming election. 501(c)(4)s do not have to disclose their donors and can accept unlimited contributions.

American Future Fund and Iowa Future Fund were registered on 8/7/07 by top Republican operatives at Holtzman Vogel, a Virgnia law firm. AFF has been running pro-Norm Coleman ads in Minnesota and the Dems there have already filed an FEC complaint.

In the comments section of a TPM Cafe post about another Republican 501(c)(4), we are working out who, besides Bruce Rastetter, is behind American Future Fund.

I'll keep you posted!

Interesting piece on the group running anti-Culver ads

Remember that Republican group, Iowa Future Fund, which has been running advertisements against Governor Chet Culver since last summer?

Mrs. Panstreppon alerted me to an article she wrote at TPM Cafe: American Future Fund & Iowa Future Fund, GOP Fronts. You should read the whole thing, but here are some excerpts (the embedded links did not come through–you’ll have to click over to TPM Cafe to see those):

American Future Fund (AFF) is running ads in support of Senator Norm Coleman (R-Minnesota) and Iowa Future Fund (IFF)is running ads against Governor Chet Culver (D-Iowa)and there has been speculation in the media as to who is behind AFF and IFF. Paul Kiel at TPM Muckraker posted about AFF and IFF and the Des Moines Register and Minnesota NPR among others have run stories about the two entities.

Last week, Minnesota Democrats filed an FEC complaint against American Future Fund.

I reviewed AFF and IFF documents filed with the Iowa Secretary of State on 8/7/07 and the incorporator is Jessica Young at 98 Alexandria Pike, Ste 53, in Warrenton, VA. That is the address of Holtzman Vogel, a law firm owned by two very influential and well-known Republican operatives, Alex N. Vogel and his wife, Jill Holtzman Vogel.


On 2/7/08, an Eric Peterson filed a fictitious name resolution in order for Iowa Future Fund to do business as “IFF”. Peterson listed himself as IFF president, secretary and director but no address or phone number was provided.

Jessica Young as IFF incorporator has the power to appoint directors so I assume she appointed Eric Peterson. But Young isn’t talking. I called her at Holtzman Vogel and was referred instead to an attorney named Teresa who told me that it was the firm’s policy to keep client matters confidential. When I pointed out that HV seemed to be the client, she refused to comment.[…]

According to Stu Rothenberg at the Rothenberg Report, Republican operatives Ben Ginsberg and Edward T. Tobin III are also involved in IFF and AFF. Ginsberg, former counsel to the Bush-Cheney campaign, is a partner in Patton Boggs’s public policy and lobbying group. Tobin, former executive director of the Republican Governors Association, is a partner in Wilmer Hale’s fairly new Public Policy and Strategy Group.

David Kochel has acknowledged that he is an IFF advisor but refuses to say anything more. Kochel, a former Iowa Republican Party director, was most recently an advisor to the ill-fated Romney campaign and he advised Lamar Alexander in 2000. Kochel, along with Jennifer Dean, owns JDK Marketing and Public Affairs.

Who is Eric Peterson, Iowa Future Fund president, secretary and director? One guess is that he is Eric Peterson, Summit Farms business manager. A 2007 Iowa State U. grad, Peterson donated $2k to Rudy Giuliani in December as did other Summit Farms employees along with Peterson’s employer, wealthy Iowan businessman, Bruce Rastetter.

Bruce Rastetter, a big Republican donor, owns Hawkeye Renewables which owns and operates four ethanol plants in Iowa.


Rastetter himself is politically ambitious and considered running against Senator Tom Harkin this year.


Is Bruce Rastetter, a least in part, funding Iowa Future Fund and American Future Fund? It would certainly suit him politically to do so because he can keep the extent of his financial support of the Republican Party secret. Rastetter seems to be a practical guy in that he just made his first ever contribution to a Democrat, $25k to Gov. Culver. I doubt if Rastetter would want the governor to know he is funding ads criticizing him.

Bleeding Heartland readers, do you know anything more about Eric Peterson or other people behind the Iowa Future Fund?  If so, please put up a comment or e-mail me confidentially: desmoinesdem AT yahoo.com.

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