Obama Campaigners Spent $468k Against Roy Moore Through Shell Group in One Day, Total Now More Than $4M

FAIRHOPE, AL - DECEMBER 05: Republican Senatorial candidate Roy Moore speaks during a campaign event at Oak Hollow Farm on December 5, 2017 in Fairhope, Alabama. Mr. Moore is facing off against Democrat Doug Jones in next week's special election for the U.S. Senate. (Photo by Joe Raedle/Getty Images)
Joe Raedle/Getty Images

Highway 31 is a shell independent expenditure group used by three secretive D.C.-based consulting firms run by former Obama campaign staffers as a vehicle to fund attacks on Roy Moore in the Alabama U.S. Senate special election. The group spent another $468,000 on credit extended by one of these firms Friday to buy a massive one-day media attack against the conservative Republican candidate.

The total spent by Highway 31 since its formation on November 6 to attack Roy Moore now exceeds $4 million, all of it funded either as an in-kind donation from these three firms founded by Obama campaign staffers or by unknown donors.

Friday’s extraordinary one-day expenditures were made by a secretive Washington, DC, consulting firm with offices on K Street, Waterfront Strategies, a wholly owned subsidiary of GMMB Consulting, which was founded and is still run by former Obama campaign staffer Jim Margolis.

According to a report filed by Highway 31 with the Federal Election Commission late Saturday and signed by its treasurer, activist left-wing attorney Edward Still, a total of $374, 855 was spent by Waterfront Strategies on behalf of Highway 31 for a media buy in opposition to Roy Moore on December 8. That same day, $93,713 was spent by Waterfront Strategies on behalf of liberal Democrat Doug Jones. The total spent by Waterfront Strategies on behalf of Highway 31 on Friday for media buys, either in opposition to Roy Moore or in support of Doug Jones, was $468,569.

Friday’s expenditures bring the total spent on behalf of Highway 31 since its formation on November 6 to more than $4 million. The exact total spent on behalf of the shell group for the 38 days of its existence between November 6 and December 8 is $4,034, 350, or $106,850 per day.

With three full days between Friday and election day on Tuesday, and the liberal coastal elites who have provided the entire financing for the shell group desperate to try and stop Moore, who currently leads in the most recent polls, the final tally spent on behalf of Highway 31 in this election campaign may well exceed $5 million.

On Wednesday, the Moore campaign sent a “cease and desist” letter to all the major television stations in Alabama requesting they stop airing a “patently false” ad purchased on behalf of Highway 31 by Waterfront Strategies, which read, in part:

1. Specifically, the ad entitled “Shopping Mall,” which began airing on or around November 28, 2017, begins with the misleading question, “What do people who know Roy Moore say?” Although the ad shows five quotations, only one of the people quoted — Teresa Jones, a coworker from 40 years ago — stated that they knew Roy Moore. And even what Jones claimed was nothing but a figment of the rumor mill. The truth is that the people quoted in the ad were alleging hearsay and third-hand gossip and do not “know Roy Moore” at all

. . .

The facts make clear that the allegations in these attack ads are patently false and known by Highway 31 political action committee to be false. As the Alabama Court of Civil Appeals held in Faye Gary v. Richard Crouch, 923 So. 2d 1130 (Ala. Civ. App. 2005)(affirming summary judgment for Gadsden police chief sued for defamation by former Gadsden police officer Faye Gary for poor performance), defamation is shown when “a false statement was made ‘”with knowledge that it was false or with reckless disregard of whether it was false or not.” ‘” (Quoting Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 659 (1989) (quoting in turn New York Times v. Sullivan, 376 U.S. 254, 279-80 (1964)). Not only does the Highway 31 ad rehash gossip and rumor that has been entirely debunked, but it maliciously floats new, outrageous, and patently unsubstantiated allegations against Judge Moore.

“We are hereby making demand that your television station cease airing these false attack ads immediately and refrain from airing them on any future date. Under Alabama law, you can be held liable for the substantial damages caused by these false and defamatory ads. Failure to comply with this request may result in immediate legal action.”

Breitbart News has contacted television stations in Alabama affiliated with Fox News, ABC, CBS, and NBC and requested a comment on this “cease and desist” letter but has received no response.

An estimated $3.7 million of the $4 million spent on behalf of Highway 31 has apparently been provided “on credit” by the three D.C.-based consulting firms founded by former Obama campaign staffers.

In addition to Waterfront Strategies, the wholly owned subsidiary of GMMB Consulting founded and run by former Obama campaign staffer Jim Margolis, the other two firms who have apparently extended credit to Highway 31 are online advertising firm Bully Pulpit Interactive, founded and run by former Obama campaign staffer Andrew Bleeker, and Putnam Partners, founded and run by former Obama campaign staffer Mark Putnam.

A number of nonpartisan groups have harshly criticized Highway 31 and the former Obama campaign staffers for violating the spirit, if not the letter, of federal election law and regulations, as Breitbart News reported:

A legal expert on federal election law tells Breitbart News this arrangement is probably “a legal in-kind contribution to the IE” by Bully Pulpit Interactive, according to a recent FEC administrative ruling, even if Bully Pulpit Interactive is never paid a dime by Highway 31, the IE.

However, the arrangement may violate the spirit of federal election law if some other group is paying Bully Pulpit Interactive a like amount for an “unrelated project” that requires basically no work. Proving that such a behind-the-scenes arrangement was, in effect, made to compensate, however, would be very difficult, the expert says, even it does exist.

“Yes, this appears to be legal. FEC regulations concerning debt are fairly straightforward: political committees are allowed to have debt as long as they report the amount of debt to the FEC. The regulations do not address the situation of taking on debt when a committee has no assets or donors,” Tyler Cole, Legislative Director & Policy Counsel at Issue One, a non-profit whose “goal is to pass and protect federal legislation that strengthens accountability and returns America to a system of self-governance for the common good,” told Breitbart News when asked about the propriety of the Highway 31 arrangement with Bully Pulpit Interactive and GMMB Consulting’s Waterfront Strategies.

“Issue One believes that it is important for voters to know who is funding advertisements that seek to influence their vote,” Cole added.

“This is disclosure in name only given that due to the reporting deadlines, voters will not be able to see what individuals or organization are funding Highway 31 until after the election. Unfortunate situations like these are why we believe that disclosure laws should be strengthened so voters get more information and get that information more quickly and easily,” Cole concluded.

In its most recent filing on November 30 with the FEC, which provides information on its financial status and balance sheet, Highway 31 reported that as of November 22 it had zero cash in the bank and no assets.

Breitbart News presented this information to Highway 31’s executive director, Adam Muhlendorf, last week, and asked for any credible information to prove that Highway 31 was not simply a shell organization but received no response to that request.


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