ENTERPRISE FREEDOM ACTION COMMITTEE

The Enterprise Freedom Action Committee (EFAC) exists to fight unions and push back against legislation and politicians opposed by corporate interests. EFAC first appeared as a major spending vehicle for business to fight the pro-union-organizing Employee Free Choice Act, but later turned its focus to attacking health care reform. EFAC is the only nonprofit organization set up by Richard Berman to ever file with the Federal Election Commission (FEC), and was the third largest nonprofit spender during the 2008 elections. Incorporated as a 501(c)4 organization in 2007, the Enterprise Freedom Action Committee (EFAC) has morphed through various iterations. Originally formed as the Center for Union Facts Action Committee, according to the IRS application for tax-exempt status obtained by ProPublica,1 EFAC was also known at one point as the Employee Freedom Action Committee, changing to its current name in April 2010.2 The organization claims that its mission is to educate the public on issues that advance the concept of free enterprise and support the growth of the free market,3 but its main purpose appears to be running political attacks against prolabor legislation and health care reform. Berman serves as president and executive director of EFAC.4 EFAC was nearly inactive in 2011, but in 2010, EFAC paid Berman and Company, Inc. (BCI) almost $263,000, an amount equal to 14 percent of EFACs expenses that year.5 EFAC spent the third most of all nonprofit groups in the 2008 election. During the 2008 election cycle, the Employee Freedom Action Committee spent an estimated $20 million on federal elections, according to the Campaign Finance Institute.6 The only nonprofit groups that outspent EFAC during that campaign cycle were the U.S. Chamber of Commerce and Freedoms Watch.7 Then-BCI employee J. Justin Wilson, speaking on behalf of EFAC, told The Hill that the group didnt file disclosure paperwork with the FEC because they didnt run any ads during the two months before the election. We took a conservative bent on doing an electioneering communication and decided against it, Wilson said. We were one of the few groups who took their ads off the air 60 days before the election.8 One of the ads EFAC ran in 2008 included a testimonial from the late Sen. George McGovern (D-SD) against the Employee Free Choice Act.9 Sen. McGovern had a long history with Berman. He served on the Guest Choice Networks advisory committee10 and was a participant in Bermans First Jobs Institute.11

Letter from IRS Director of Exempt Organizations Rulings and Agreements Robert Choi to the Center for Union Facts Action Committee, January 23, 2008, available at http://www.propublica.org/documents/item/404609-1024enterprise-freedom-action-committee. 2 Employee Freedom Action Committee, IRS Form 990, Initial Return 2009, filed November 9, 2010. 3 Enterprise Freedom Action Committee, IRS Form 990, Initial Return 2010, filed November 10, 2011. 4 Enterprise Freedom Action Committee, IRS Form 990, Initial Return 2011, filed November 12, 2012. 5 Enterprise Freedom Action Committee, IRS Form 990, Initial Return 2011, filed November 12, 2012; Enterprise Freedom Action Committee, IRS Form 990, Initial Return 2010, filed November 11, 2011. 6 Campaign Finance Institute, Table 1: 501(c) Groups Spending at Least $200,000 on Federal Elections in the 2008 Cycle, available at http://www.cfinst.org/interest_groups/pdf/np527/527_08_24M_Table1.pdf; Kevin Bogardus, Nonprofits Spending Was Dominated By Card-Check, The Hill, March 2, 2009. 7 Campaign Finance Institute, Table 1: 501(c) Groups Spending at Least $200,000 on Federal Elections in the 2008 Cycle, available at http://www.cfinst.org/interest_groups/pdf/np527/527_08_24M_Table1.pdf; 8 Bogardus, The Hill, March 2, 2009. 9 Video: George McGovern Opposes EFCA, LaborPains, October 6, 2008. 10 Guest Choice Network Advisory Panel, available at http://legacy.library.ucsf.edu/tid/nsu94a00/pdf.
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Launching a post-election anti-EFCA ad campaign, EFAC bragged that it had spent the most of any anti-EFCA organization in the 2008 election.12 EFACs millions in anti-union advertising were supported by business executives, including casino mogul Sheldon Adelson. In 2008, EFAC paid for television, radio, and print advertising criticizing the Employee Free Choice Act in Maine, Colorado, Kentucky, Louisiana, Minnesota, Mississippi, New Hampshire, and Oregon all states with high-profile Senate races that year.13 According to the New York Times, the people giving Berman the money for his campaign, which could total $30 million on its own, did not want to be identified because they feared possible retaliation.14 Berman described his ad strategy to National Journal: As Senate races firm up or collapse, we move our operatives around, Berman said.15 Our strategy is simple: Im trying to make this a defining issue for voters in their particular races. Though Berman refused to reveal his donors to National Journal, only saying that he received funding from a broad cross section of business people and some foundations, the magazine reported one of EFACs first major backers was casino mogul Sheldon Adelson.16 Berman has praised Adelsons opposition to EFCA elsewhere, telling The Jewish Daily Forward in 2009, In some ways, Sheldon Adelson is being more true to Jewish heritage than the guys who are pushing for the passage of this law.17 Additionally, former ambassador to Italy Mel Sembler, a Florida real estate developer, was shepherding Berman around to meet business executives who might support his anti-union effort.18 EFAC used state-based front groups to make their 2008 campaigns appear local, but ran them out of Washington, D.C. In 2008, EFAC ran ads against Democratic senators and Senate candidates in several states under different names tailored to each state, including Kentuckians for Employee Freedom and Oregonians for Employee Freedom.19 When EFAC ran ads in two Oregon newspapers criticizing Senate candidate Jeff Merkley,20 the ads listed a contact number with a local area code. When a reporter for Willamette Week called the number, however, EFACs then-spokesman, Tim Miller, answered the phone in DC.21 Additionally, press releases in the name of Minnesotans for Employee Freedom in 2008 were distributed by EFAC and listed Millers Washington, D.C. number as the contact number.22

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First Jobs Institute, archived at http://web.archive.org/web/20111012035744/http://firstjobs.org/profile.cfm?t=mcgovern_george. 12 EFAC Launches Anti-EFCA Campaign with National TV Ad, LaborPains November 21, 2008. 13 Carl Hulse, Advocacy Groups, in Big Ad Campaigns, Step Up Intensity of Senate Races, New York Times, August 20, 2008. 14 Id. 15 Peter Stone, Business Nervously Eyes The Senate, National Journal, July 26, 2008. 16 Id. 17 Nathaniel Popper, Which Side Are We On? Jews Lead Fight For And Against Key Labor Bill, The Jewish Daily Forward, May 6, 2009. 18 Stone, National Journal, July 26, 2008. 19 Will Evans, Group Uses Union Issue to Target Democrats, NPR, August 1, 2008. 20 Employee Freedom Action Committee, Willamette Week, May 28, 2008. 21 Id. 22 Press Release, Minnesotans for Employee Freedom, Minnesotans for Employee Freedom Challenges Brian Melendez to Debate on Card-Check, July 18, 2008.

EFACs Committee to Rethink Reform had to apologize for an anti-health care reform newspaper ad it ran featuring photo of a congressmans daughters. According to its 2009 tax forms, EFAC spent almost $3 million dollars on the Committee to Rethink Reform, which was an effort to oppose health care reform.23 In March 2010, the Committee to Rethink Reform paid for a full-page ad in the Cincinnati Enquirer featuring a photo of then-Rep. Steve Driehaus (D-OH) and his two young daughters.24 Following outrage over the inclusion of Rep. Driehaus daughters in a political attack, both the committee and the newspaper issued apologies.25 BCI employee Sarah Longwell said it was a mistake to feature the children.26 EFAC spent nearly $1.8 million supporting the Committee to Rethink Reform in 2010, according to its tax forms.27 EFAC was forced by a federal court to take down an ad misrepresenting the position of medical groups. In December 2009, the American College of Surgeons (ACS) requested that EFAC remove its name from a list of Doctors Against The Plan in an anti-health care reform ad run by EFACs Committee to Rethink Reform.28 BCIs Longwell publicly resisted ACSs request, saying EFAC accurately characterized ACSs position.29 After ACS requested EFAC remove its name, another medical group, the American Society of Plastic Surgeons (ASPS), also requested EFAC remove its name from the ad.30 ACS filed a legal complaint against EFAC, claiming that the Berman organization violated their trademark and defamed the group by including them in the ad.31 Soon after, a federal district judge sided with ACS and ordered EFAC to remove the ad citing ACS from television and the Internet.32 BCIs Longwell told Politico that they would remove ACS and ASPS from the ads, but that they would continue to highlight doctors groups public opposition to the current health care reform proposal.33 In 2010, EFAC ran ads opposing two Democratic senators up for re-election. In 2010, EFAC filed two reports with the FEC, one for electioneering communication34 and one for independent expenditures.35 In the electioneering communication filing, they reported spending $37,000 to place radio ads targeting Sen. Harry Reid (D-NV) and $32,000 for radio ads targeting Sen. Patty Murray (D-WA).36 EFAC reported paying BCI over $5,500 for placing and producing the ads.37 In the independent expenditures report, EFAC said they paid Google $10,000 to purchase online ads against Sen. Reid and $15,000 to purchase online ads against

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Employee Freedom Action Committee, IRS Form 990, Initial Return 2009, filed November 9, 2010. Dan Sewell, Steve Driehaus, Ohio Congressman, Outraged By Newspaper Ad Showing Daughters, Associated Press, March 18, 2010. 25 The Enquirers Apology, CityBeat, March 18, 2010. 26 Sewell, Associated Press, March 18, 2010. 27 Enterprise Freedom Action Committee, IRS Form 990, Initial Return 2010, filed November 10, 2011. 28 Ben Smith, Surgeons Groups Want Names Pulled From Ad (UPDATED), Politico, December 16, 2009. 29 Id. 30 Id. 31 Ben Smith, Court Forces Health Care Foes Ad Off Air, Politico, December 17, 2009. 32 Id. 33 Id. 34 Enterprise Freedom Action Committee, FEC Form 9, 24 Hour Notice, October 27, 2010. 35 Enterprise Freedom Action Committee, FEC Form 5, 24 Hour Notice, October 25, 2010. 36 Enterprise Freedom Action Committee, FEC Form 9, 24 Hour Notice, October 27, 2010. 37 Id.

Sen. Murray.38 EFAC reported paying BCI almost $5,000 for online ad production and placement opposing the two senators.39 EFAC ran web ads in October 2012 opposing President Obamas re-election. On October 24, 2012, EFAC filed a 24-Hour Report for independent expenditures with the FEC, disclosing $50,000 in payments to Google for online ad placement for their Obamacin ad, which they said was in opposition to President Obamas re-election.40 The ad attacked President Obama on the issues of debt, unemployment, and health care costs, ending with an actress saying, #%^ Obamacin and hitting a pill bottle off a table. 41 The FEC filing also disclosed more than $7,000 in payments to BCI for production and placement of the Obamacin ad.42 Obamacin.com was hosted by EFAC, though it has since been taken down. The website featured the web ad. In June 2013, EFAC amended its filings with the FEC, increasing the amount paid to Google to $59,990.38 and the amount paid to BCI to $10,710.60.43 EFAC maintains the following websites: EFAC co-runs LaborPains.org with CUF. EFAC used to run EmployeeFreedom.org, RethinkReformAction.com, Crony-2012.com, EmployeeRightsNow.com, and Obamacin.com.

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Enterprise Freedom Action Committee, FEC Form 5, 24 Hour Notice, October 25, 2010. Id. 40 Enterprise Freedom Action Committee, FEC Form 5, 24 Hour Report, October 24, 2012. 41 Id. 42 Video, Obamacin Side Effects, September 18, 2012, available at http://www.youtube.com/watch?v=McW90W_9Iws. 43 Enterprise Freedom Action Committee, FEC Form 5, 24 Hour Report, Amended, June 12, 2013