A coalition of left-leaning and nonpartisan campaign finance groups appear on the verge of filing lawsuits and complaints aiming to force the well-heeled centrist group, No Labels, to reveal its donors as it prepares to back a third-party bid for the presidency, according to a letter obtained by HuffPost.
In the letter, sent Thursday night to No Labels CEO Nancy Jacobson, the groups ― including End Citizens United, Black Voters Matter, the League of Women Voters, and the Campaign Legal Center ― suggest they are giving No Labels a final chance to voluntarily reveal their donors.
“No Labels’ refusal to disclose its funders is disturbing and unlawful. Secret political spending is one of the most corrupting influences in politics and having a secret money organization impersonating a political party severely undermines the democratic process as a whole,” the groups wrote in the letter, adding: “If you continue to deprive voters of the information to which they are entitled, our organizations will consider legal action to vindicate American voters’ legal right to know who is using No Labels to try to buy the 2024 presidential election.”
The letter is both a reflection of how No Labels seems to be skirting the law surrounding nonprofits and political activity by failing to register as a political party, and to how Democratic-aligned groups remain worried about the possibility No Labels will possibly tilt the presidential election toward Republican Donald Trump.
No Labels did not respond to an email sent Thursday night requesting comment. The group has suggested it does not need to disclose its donors because the candidate it eventually chooses to support will have to file with the FEC and reveal their financial backers.
“There’s nothing nefarious going on here,” Jacobson insisted to NBC News last year when asked about donor disclosure.
No Labels is registered with the Internal Revenue Service as a 501(c)4 nonprofit. Such groups do not have to disclose their donors, but are supposed to focus on promoting “social welfare” and not have politics as their primary purpose.
The watchdog groups and others have suggested No Labels is violating IRS and Federal Election Commission rules by essentially acting as an unregistered political party. Even though it has not yet chosen a candidate to back, it has spent heavily to gather signatures and qualify for the ballot in 13 states, including the swing states of Arizona, Florida and Nevada.
Last March, the Arizona Democratic Party filed a complaint with the Secretary of State office there arguing No Labels should be kicked off the ballot because it does not follow the same donor disclosure rules as the Democratic and Republican parties. There has yet to be a ruling on the complaint.
What is known of the group’s funding suggests it is mostly backed by wealthy political donors and business interests. The letter notes conservative megadonors Peter Thiel, Harlan Crow and David Koch have all given to the group in the past. The group, which backs the Congressional Problem Solvers’ Caucus, is known for pushing a centrist, business-friendly line on the vast majority of issues.
The rumored candidates for No Labels’ backing broadly fit that ideological profile. The most likely seems to be former Maryland Gov. Larry Hogan, who resigned from the group’s leadership on Thursday in what The Associated Press described as potential prep for a run. Other rumored candidates include Sen. Joe Manchin (D-W.Va.) and former New Jersey Gov. Chris Christie, who ended his run for the GOP nomination earlier this week.
Strategists aligned with the group also launched a super PAC dubbed New Leaders ’24 earlier this week. The New York Times reported the group already has pledges of $2 million and could raise up to $300 million if their eventual ticket is viable.
Democrats have long worried about No Labels’ impact on the election, fearing it would steal the votes of moderates who were crucial to President Joe Biden’s 2020 coalition. Democratic groups, led by an alliance between the moderate Third Way and the progressive MoveOn, have waged a rhetorical war against No Labels, aiming to dissuade donors and politicians from signing on to the group’s efforts.
Other groups who signed on to the letter include Public Citizen, Defend The Vote, Democracy SENTRY, People For The American Way, and Stand Up America. The groups could potentially file complaints with the IRS or FEC, or file a lawsuit seeking to compel donor disclosure.
“At the crux of a healthy democracy is disclosure, accountability and the rule of law,” the groups wrote in the letter. “But No Labels is the embodiment of what’s wrong with Washington: a secretive special interest group using unethical practices in an attempt to install politicians who will help the most powerful and wealthy benefit at the expense of working Americans.”