Former House Speaker Paul Ryan departed from politics unceremoniously at the outset of 2019. But politics, it turns out, is still bankrolling the next chapter in his professional life.
Last fall, Ryan and a handful of top aides formed the American Idea Foundation, a nonprofit promoting Ryan’s thoroughly un-Trumpian vision of conservative politics, with its focus on poverty alleviation, civil society, and government by consensus.
The group hasn’t been around long enough for us to get a detailed look at its finances. But we do know, from the limited information out there, that Ryan’s formidable political operation has provided millions of dollars in seed funding for the foundation.
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Now, it’s fairly standard for a retired politician to steer leftover campaign funds to a post-politics charitable venture. What’s less common is the means by which the Ryan political machine—renowned in Washington for its fundraising prowess—has managed to establish a steady stream of funding for Ryan’s nonprofit that simultaneously allows him to boost his allies’ political prospects.
Central to the fundraising scheme are the large and lucrative lists of donors that Ryan’s political operation assembled as it raked in tens of millions of dollars for his Republican caucus during his time in office. Ryan has departed from politics. But those lists are still on the open market. And as different entities rent them, they are providing significant revenue for Ryan-aligned political groups. The money those lists are bringing in, public records indicate, is financing Ryan’s new nonprofit endeavor.
“Speaker Ryan will continue to remain involved in the major policy debates of our day through his nonprofit organization, the American Idea Foundation, and he will remain supportive of congressional candidates in a variety of ways, including through his leadership PAC, Prosperity Action,” said Kevin Seifert, who directed Ryan’s political efforts and now serves as AIF’s vice president and senior adviser.
The structure that Ryan has created effectively allows him to use political entities to raise money for an apolitical charity. But legal experts told PAY DIRT that the whole thing is aboveboard when it comes to the rules governing political fundraising, nonprofit politicking, and the nexus between the two. It’s nonetheless a clever workaround for a politician whose latter days in Congress were animated by a professed exasperation with politics as usual.
The American Idea Foundation was launched with the aim of partnering with academic institutions to develop policy proposals aligned with Ryan’s vision of government. It pledged to work with policymakers directly to craft and implement such policies, according to its website. The group seeks to advance a version of what pre-Trump pundits once described as “reform conservatism.”
“The American Idea means the condition of your birth does not determine the outcome of your life, and I am excited this foundation will educate individuals about solutions and efforts that give more people the opportunity to realize their versions of the American dream,” Ryan said at the founding of his new group in October. “I wholeheartedly believe the foundation can make a real difference and help those working to expand opportunities across the county.”
Though the AIF officially launched last fall, it was actually incorporated on Jan. 29, 2019, days after Ryan left office, according to documentation filed with charity regulators in New York. The group’s board is composed of some of Ryan’s top congressional aides: former chief of staff Jonathan Burke, former political director Jake Kastan, former press secretary AshLee Strong, former policy adviser Casey Higgins, and former legislative counsel Derrick Dockery.
Seifert was the executive director of Ryan’s formidable political operation. And after the foundation launched, that operation largely provided the seed money for AIF. In the first six months of 2019, Ryan for Congress, his campaign committee, and Prosperity Action, his leadership PAC, donated more than $7.2 million to the new nonprofit, according to Federal Election Commission records.
Subsequent FEC filings, though, indicate that the seed money wasn’t a one-off. Indeed, Ryan’s political operation appears to have developed a mechanism to provide a steady stream of funding to the AIF. And it’s a mechanism that allows Ryan to continue leveraging the potent political assets he developed atop the House Republican caucus—and accompanying nationwide political machine—to simultaneously keep a toe dipped in the waters of electoral politics.
Ryan’s reputation as a wonky policy thinker was perhaps surpassed, in his latter years in Congress, by his reputation as a mammoth political fundraiser. “Before Ryan took the speakership, there was a fear among some that he would not be as prolific a fundraiser as [his predecessor] John Boehner,” Politico’s Playbook newsletter noted in April 2018. “He’s proven to be far more prolific than Boehner. Ryan is by far the biggest cash cow by a mile for the House GOP.”
That blurb ran in Playbook two days before Ryan announced he would not seek re-election. His colleagues immediately fretted about what that would mean for future fundraising endeavors. “The Ryan campaign, one of the most prolific and battle-tested finance juggernauts in politics, will decide how to hand off the keys to a war chest worth millions of dollars,” CNBC reported at the time.
It wasn’t long before donors and fundraisers got at least a partial answer. At some point between April 26 and May 28, 2018, a few new pages popped up on the website of Granite Lists, a prominent Republican email and direct-mail fundraising vendor. The pages advertised the availability of two Ryan direct-mail lists, dubbed Paul Ryan Donors and Paul Ryan Signature File. Together, they boast more than 240,000 names and addresses, primed for dollar asks.
“Speaker Paul Ryan’s tenure in Congress was marked by legislative victories based on the core tenets of the Republican Party: limited government, fiscal discipline, and personal freedom. He also happened to smash fundraising records,” Granite Lists boasts in its promotion of the Paul Ryan Donors list.
The firm charges political clients $135 per thousand names hit up through that list, with additional fees for mailers to donors with a history of giving in larger increments. The Paul Ryan Donors list has a total of 75,610 names—meaning for a mail piece sent to the entire list, it would cost at least $10,200, with upsells including geotargeting and higher-dollar donors.
The Signature File promotion, which Granite’s political clients can hit up for $100 per thousand recipients, advertises 165,603 “grassroots donors” who “were gleaned from letters signed by Speaker Paul Ryan on behalf of third-party organizations. They understand how important it is to support Republican candidates and entities and will donate generously to conservative, issue-oriented appeals. Hit them up with big picture messaging or a strong issue-specific piece. Either way, these generous and loyal GOP donors will respond.”
So far in the 2020 election cycle, just one federal political committee has reported renting lists from Granite: the Republican Party in Ryan’s home state of Wisconsin. But Granite has done a host of other work at the state level as well. And since September 2018, the firm has paid Ryan for Congress and Prosperity Action about $235,000 for the rights to access its voter files.
During roughly the same time period, the Ryan political operation has brought in even more in list-rental income, about $483,000, from Republican digital vendor Targeted Victory.
That income padded a financial bottom line for Ryan’s two political committees that helped provide the seed money for AIF. But in the second half of 2019, the financial links between Ryan’s political and nonprofit ventures grew even stronger.
Starting in July, Ryan for Congress and Prosperity Action began taking the list-rental income provided by Targeted Victory and Granite Lists and passing it along to AIF. In most cases, the transfers to the foundation were exactly the sums it reported receiving from the two vendors, down to the penny. And most of the transfers occurred just days after the two committees reported receiving the list-rental income.
In other words, the money paid to rent Ryan’s donor lists is now providing a steady stream of income to his nonprofit. And according to a source familiar with the arrangement, Ryan’s team maintains control over how the two vendors use the lists, and to whom they are rented. That means that Ryan is in a position to use those lists both to advance his allies’ political prospects and use the resulting revenue to finance his new nonprofit.
The former speaker has managed to work out a system that both finances his post-congressional policy group and simultaneously puts to work the significant political fundraising assets he built atop the House Republican conference.
The source familiar with AIF’s operations said the list-rental income from Ryan for Congress and Prosperity Action is not the group’s primary source of income. But it nonetheless represents a wellspring of financial support for both Ryan’s political and policy endeavors.
It’s an unorthodox fundraising strategy, campaign-finance experts said, but it appears to fall within legal bounds on both the political and the nonprofit side.
As a general matter, 501(c)(3) nonprofits like AIF are not permitted to restrict the use of their donor lists to particular political candidates or parties. But here, AIF does not actually own the lists at issue. They are still in the hands of Ryan’s two political committees, giving them far broader latitude to use them for political purposes.
“The policy behind the prohibition on c3 intervention in candidate elections is that people shouldn’t get a tax deduction for partisan political contributions, they should only get a tax deduction for funding legitimately charitable work,” explained Paul S. Ryan (no relation), the vice president of policy and litigation at the nonprofit Common Cause.
“Tax law doesn’t care where c3s get their money, so long as donors don’t end up getting a tax deduction for funding partisan political work,” Ryan added. “Here, I don’t think Ryan’s unconventional maneuver violates the letter or the spirit of the tax law prohibition on donors getting tax deductions for funding partisan political work.”
There is one additional restriction on the use of campaign funds in this manner, noted Brendan Fischer, the director of federal and FEC reforms at the Campaign Legal Center. “It would violate the personal-use ban to transfer campaign funds to a charity that is paying the former candidate a salary,” Fischer noted in an email. But Ryan is not drawing a salary from AIF, meaning there are no legal hangups there.
Fischer added, “It certainly looks like Paul Ryan is using his old political committee to help bankroll his post-congressional gig.” And with the mammoth fundraising operation at Ryan’s disposal, that guarantees his new group will be comfortably situated financially.
