Super PAC Men: How Political Consultants Took a Texas Oilman on a Wild Ride

by Robert Faturechi ProPublica, March 19, 2015, 5 a.m.

This story was co-published with the Daily Beast and the Houston Chronicle.

Throughout the booms and busts of his Fort Worth oil empire and during his brother’s notorious murder trial, Kenneth W. Davis Jr. largely kept to himself. At 89, he still does. He puts in full workdays at his small downtown office, with drapes drawn against the North Texas sun. He usually dines at an exclusive club across the street, often alone, using distinctive silverware set aside just for him.

Davis has long shut out politics, too. He remembers voting only three times 2013 for Eisenhower, Goldwater and Reagan. Yet last year he thrust himself into the public eye by starting his own super PAC.

His group, Vote2ReduceDebt, aimed to move the needle in eight key U.S. Senate races by energizing disengaged conservative voters. It spent almost $3 million to boost Republican candidates in the 2014 midterm election 2013 ranking it among the top right-leaning groups of its kind.

But now it’s dead in the water, with its main operatives expelled amid questions about where the money went.

Even within the free-wheeling world of U.S. campaign finance, Vote2ReduceDebt stands out as a cautionary tale for donors, activists and voters.

Since the Supreme Court helped open the gates with the Citizens United ruling, unprecedented millions have flowed into super PACs, groups that can accept political donations of unlimited dollar amounts.

But, as Davis discovered, federal election laws do little to ensure these contributions are used as donors intended.

In addition to escaping donation limits, no rules prevent the people running super PACs from using contributions to hire themselves or companies owned by their relatives and other insiders.

The story of Vote2ReduceDebt is an egregious example of what can happen in the absence of such controls, but similar scenarios have played out on a smaller scale at dozens of PACs in the last three election cycles.

Vote2ReduceDebt collapsed amid allegations of faked campaign events, destroyed records, fabricated expenses, contracts routed to cronies and a plot to siphon the Texas oilman’s money to a reality TV show. The characters in the melee include a former top Republican strategist, a onetime TV news anchorman, a peanut-truck magnate with dreams of becoming a NASCAR star and a refugee from an infamous Washington corruption scandal.

Until now, the debacle has remained hidden from public view. In an interview, Davis would say only that he wasn’t prepared for the reality of modern politics. He declined to discuss details and said he’d ordered his subordinates to keep quiet. ProPublica obtained internal records and e-mails, reviewed campaign filings and court records and interviewed participants, some of whom spoke on condition of anonymity.

Founded in May of last year, Vote2ReduceDebt raised its nearly $3 million almost entirely from Davis, and spent just about all of it. Its filings with the Federal Election Commission list ads, phone banks and rallies for candidates in tight races, including Joni Ernst in Iowa and Cory Gardner in Colorado.

The routine filings give no hint of turmoil. But inside the PAC’s Fort Worth headquarters, the group’s director, Randy Hill, and its senior political consultant, Patrick Davis (no relation to Kenneth), were accusing each other of gross misconduct, according to documents and interviews.

Patrick Davis, 47, was a one-time political director for the National Republican Senatorial Committee, a professorial type who has worked on dozens of national and local campaigns. Hill, also 47, is a gregarious Fort Worth native known in the trucking industry for inventing a trailer that dries peanuts during transport.

The allegations of fraud started in dueling memos that went to the older Davis and the group’s board of directors. Hill claimed Patrick Davis was faking expense reports and trying to award contracts to phantom companies. Davis’ camp said Hill was hatching a plan to defraud the oilman out of $4 million, and alleged the PAC’s attorney may have been in on a cover-up.

Both sides denied all wrongdoing, leaving it to their elderly patron to figure out if someone was trying to swindle him. The PAC imploded before he could.

“What you have here is a pretty classic case of the sort of problems one can run into when they’re not familiar with politics and arrive with a pot of money,” said Trevor Potter, a former Republican FEC chairman.

“Consultants are attracted like bees to honey to situations like these,” Potter said.

Ken Davis was only one in a throng of wealthy people who tried to influence national politics after the Supreme Court signaled that many of the past restrictions on independent political spending violated free speech guarantees.

While super PACs don’t have to abide by the $5,000 limit on individual contributions that applies to regular PACs, they do have to disclose their donors, unlike the political nonprofits that have become known as dark money groups.

In all, super PACs spent nearly $1.5 billion in the 2012 and 2014 elections. They accelerated the surge of money into politics and stoked confusion among donors and voters alike. Many are short-lived groups with similar sounding names and fund-raising appeals crafted to arouse fury at the opposition.

Some super PAC operatives have spent portions of the donations on their own businesses or have illegally coordinated with candidates. Last month, a former campaign manager for a Republican congressional candidate in Virginia admitted to prosecutors that he got an ostensibly independent super PAC he helped run to pay his mother’s company $138,000 for work that was never performed.

Attempts to more strongly regulate super PAC spending have foundered. The FEC has repeatedly urged Congress to ban organizers from using donor money for personal purposes. In those recommendations, the FEC said that while current campaign finance laws “are sometimes adequate to address these types of unauthorized disbursements, sometimes they are not.”

Larry Noble, the FEC’s former top lawyer, said such abuse “adds to the cynicism the public has about politics.” He said that lawmakers are wary about cracking down on super PACs for a simple reason 2013 they depend on the groups to help their reelection campaigns, despite numerous examples of donors getting fleeced.

“It hasn’t yet reached the critical mass where people are screaming about it,” said Noble, now senior counsel at the Campaign Legal Center, a nonpartisan group that advocates for strong enforcement of campaign finance laws.

“Ironically, what could do something about it is a number of wealthier donors getting ripped off,” he said. “They have more clout with legislators.”

While Ken Davis donated to political causes over the years, those around him never expected him to jump into the fray as he did in 2014.

Davis hardly comes off like an oil tycoon. He’s slight and mild mannered, with a reputation for frugality. One of his few concessions is the fedora he always sports in public, a throwback to the decorum instilled by his father and namesake, who started out in the oil business as a laborer before striking it big selling supplies to wildcatters. The father became one of the richest men in Texas.

Vote2ReduceDebt had its origins in an open letter Ken Davis passed around early last year among people he knew. He warned that U.S. debt was “a looming crisis that needs to be recognized.” The

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