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How a Dem Dark-Money Group Is Invading the News

Lachlan Markay
Photo Illustration by The Daily Beast / Photos Getty

A new Virginia-centric news outlet backed by a deep-pocketed progressive group ran scores of stories about Commonwealth politics this year, even as a separate entity run by the group’s chief executive raked in tens of thousands of dollars in consulting fees from Virginia Democrats.

In August, the Democratic Party of Virginia paid the firm Lockwood Strategy $150,000 for digital consulting and advertising, according to state campaign-finance records. The payments came about a month after the nonprofit group ACRONYM, run by Lockwood CEO and veteran Democratic digital operative Tara McGowan, announced its financial backing for The Dogwood, a Virginia-focused digital news venture that extensively covered Virginia politics leading up to the election with an editorial line consistently favoring state Democrats.

ACRONYM is no bit player. Rather, its political arm, a Democratic super PAC called PACRONYM, is planning a massive $75 million digital advertising campaign in the runup to the 2020 election targeting the swing states of Arizona, Michigan, Wisconsin, Pennsylvania, and North Carolina. At the same time, Lockwood is staffing up a new local journalism venture in the same five states.

The confluence between those journalistic and political activities raises a myriad of ethical questions about political news coverage at organizations backed financially by explicitly political or ideological interests. And though the ACRONYM-backed newsrooms are part of a growing universe of such politically oriented news organizations, the sheer scale of its planned 2020 ad campaign may prompt new questions about journalistic ethics, disclosure, and the reliability of agenda-driven reporting.

The precise relationships between Lockwood, ACRONYM, and PACRONYM can be a bit confusing, but in effect they are all different legal entities under the same umbrella. McGowan, who’s run digital campaigns for high-profile Democrats including Barack Obama and Tom Steyer, told an interviewer last November that ACRONYM, a “dark-money” nonprofit group, “is the sole shareholder of Lockwood Strategy.” The nonprofit’s most recent tax filing describes Lockwood as a “controlled entity.” The group also describes PACRONYM as an “affiliated” political organization.

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Less clear is the precise operational relationship between ACRONYM and the news organizations that it’s backed financially. ACRONYM describes its role simply as that of a Dogwood investor. But it appears to have had some editorial input as well, at least early on.

The Dogwood describes itself as a straight news site focused on local issues. “We produce original reporting focused on everyday Virginians and the issues that matter to them,” its website says. “Our reporting is honest, to-the-point and in the service of our readers.”

When PAY DIRT first started looking into The Dogwood in late June, its website included author pages for three individuals listed as ACRONYM employees on the group’s website or on their own LinkedIn pages. An ACRONYM lawyer told us at the time that all three were Lockwood employees.

One of those Dogwood authors, Jordan Beyer, describes herself on her LinkedIn page as ACRONYM’s art director. She wrote a story on June 28 headlined “What the Democratic presidential candidates want to do for you.” That was about two weeks before ACRONYM announced its investment in the company.

ACRONYM’s press release described that investment as one of a number of financial commitments designed “to build sustainable, digital infrastructure for the progressive movement.” And while it’s not clear how much traffic or traction The Dogwood’s coverage has received, it has run more than 1,500 ads on Facebook at a cost of more than $275,000, according to the site’s political ad database.

ACRONYM’s investment also aligned Dogwood’s editorial line with that of Virginia’s Democratic Party, the firm’s eventual client. In early August, The Dogwood began publishing Virginia voter guides laying out the backgrounds and qualifications of Democratic and Republican candidates in ten races for Virginia’s state senate and house of delegates. The guides were subtly but recognizably favorable in tone and content to the Democrats in each of those races, frequently framing issues in terms that align with the Democratic position—Republicans are described as opposing reproductive rights, rather than supporting the right to life, or opposing gun-safety measures, not supporting gun rights.

The last of those voter guides was published on Aug. 12, according to an analysis of each page’s source code. That was the same day that Virginia Democrats wrote two checks to Lockwood, one for $125,000 and one for $25,000.

ACRONYM is not, legally speaking, a partisan organization. As a 501(c)(4) nonprofit, it can engage in issue advocacy and limited public communications about candidates for office. That’s not the case with PACRONYM, an explicitly political group that can raise and spend unlimited sums advocating directly for or against candidates for office.

The group’s planned $75 million digital ad campaign, which was first reported by Axios, is designed to boost Democrats’ electoral prospects next year. “How and where people get their information has changed dramatically over the past 10 years and Democrats have been slow to evolve their strategies to meet the demand for online information,” McGowan said of the plan. “We are now ready to take the fight to Trump directly.”

The five states that that campaign will target—Michigan, Wisconsin, North Carolina, Arizona, and Pennsylvania—are all states that Donald Trump carried by 4 percentage points or less in 2016.

They also happen to be the same states in which a new ACRONYM-backed news venture, dubbed Courier Newsroom, is staffing up. Lockwood is advertising a number of positions at state-specific Courier organs, according to the company’s page on the website of human resources management service Bamboo HR. Courier is also running a host of Facebook ads that largely target the same five states where it is hiring—and where PACRONYM plans its big digital blitz.

Courier’s polished website has the look of a savvy digital news startup. And its content, like that of The Dogwood, is reliably friendly to Democrats, with numerous stories adorning the homepage Thursday singing the praises of various Democratic members of Congress.

All of that overlap in structure and activity is likely to fuel concerns that have bedeviled similar news outlets backed by explicitly ideological or partisan organizations. Nevertheless, such organizations have sprouted up amid a fractured media ecosystem that often makes it difficult to trace the precise people or organizations behind a bit of digital reporting.

Republicans, for their part, have created similar projects in some of the same states where ACRONYM and its media properties are gearing up. Such projects have drawn calls from progressives to institute a similar infrastructure on the left, especially with the recent demise of ThinkProgress, the news site that was associated with the party’s top think tank, Center for American Progress. And that’s precisely what ACRONYM has set out to do.

Commenting on one such story on apparent efforts to seed a state-based conservative media front last month, progressive writer Matt Yglesias remarked, “Progressive donors should get smart and invest in media.”

McGowan responded, “We’re out here.”

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