Meltdown On Main Street: Inside The Breakdown Of The GOP's Moderate Wing

Aug 23, 2019
Originally published on August 24, 2019 12:04 am

Three weeks after Democrats took control of the U.S. House in the 2018 midterm elections, about 40 reelected and recently defeated lawmakers in the centrist Republican Main Street Caucus gathered at the Capitol Hill Club to sift through the electoral wreckage.

The caucus — then led by Reps. Rodney Davis of Illinois, Jeff Denham of California, Mario Diaz-Balart of Florida and Fred Upton of Michigan — was scheduled to hold its regular meeting with the outside group that inspired its name, the Republican Main Street Partnership, led by president and CEO Sarah Chamberlain.

Founded in the late 1990s, RMSP raises money to support the Republican Party's moderate wing. GOP lawmakers embraced the RMSP name when, in 2017, it launched the caucus — an official member organization registered in the U.S. House. The member caucus was driven by a desire to counterbalance the weight of the conservative wing inside the House GOP. Lawmakers believe that rebuilding the centrist coalition is key to improving the GOP's odds of winning a House majority in 2020.

That November, lawmakers were licking their wounds. Main Street Caucus Republicans had been hit hardest in the election — 18 House incumbents defeated — and they wanted to question Chamberlain about her organization's political decision-making in 2018. At issue was $722,000 still resting in Defending Main Street, the outfit's superPAC — one of at least five political or advocacy organizations under the RMSP umbrella run by Chamberlain — and why those resources hadn't been deployed to any number of competitive races where they could have made a difference.

Chamberlain defended her work, pointing to the Republicans who survived 2018 with the help of significant resources — nearly $6 million — from the RMSP network. RMSP told NPR that $722,000 wasn't spent because those funds had been earmarked for 2020.

That Nov. 28 meeting set off a cascading series of events over the next two months. Lawmakers demanded, and were denied, an audit of RMSP's activities. Lawmakers ultimately abandoned the member caucus, and others quietly distanced themselves from RMSP and Chamberlain. Today, lawmakers still don't have answers to their questions about how Chamberlain runs the organization and whether it might be running afoul of campaign finance and tax laws.

"It just all smelled really bad," said one former GOP lawmaker with direct knowledge of these events.

This previously unreported account highlights a major breakdown within the centrist wing of the GOP in the wake of the 2018 midterms and exposes ongoing concern that the infrastructure won't be there to help recruit and win in swing districts in 2020.

In a statement, RMSP defended its work and Chamberlain, and it rebutted the accusations lodged at the organization. "It is not surprising that Sarah Chamberlain is being attacked. RMSP is the only Republican organization other than the RNC that is [led] by a woman," said RMSP board member Doug Ose, who provided written responses to a series of questions from NPR on behalf of himself and Chamberlain. "We are the leading experts on issues affecting suburban women and are very proud that, under Sarah's leadership, RMSP has experienced over 20 years of productive, scandal free relationships with our members and donors."

Inside the room: "You have no right to any of this"

NPR confirmed this account based on 11 sources, all with direct knowledge of some or all of these events. All agreed only to speak on the condition of anonymity so they could speak candidly about private meetings and sensitive communications. Davis, Denham, Diaz-Balart and Upton declined to comment when contacted by NPR.

The November meeting left members uneasy. Even before Election Day, sources said, there was a growing list of questions about Chamberlain's leadership of RMSP, which raises money based on its perceived close relationship with these very members. The Republican Main Street Caucus shared the branding of "Republican Main Street," but there was no official or legal link between the two.

At a follow-up caucus meeting on Dec. 12, again at the Capitol Hill Club, Chamberlain was asked to give a political presentation to lawmakers on RMSP's activities. In it, she referenced an organization, Women2Women, that was part of the group's network and that many members had never heard of, triggering a new set of alarms about how she was running the organization.

After Chamberlain left that meeting, members voted unanimously in support of a resolution written by caucus member Rep. John Katko, R-N.Y., a former federal prosecutor, to suspend political activity with RMSP until a governance audit of RMSP could be conducted. Katko's office did not dispute the account as described here by NPR but declined to comment. Members also agreed that the recently defeated Denham would serve as their liaison, and the caucus informed RMSP of their decision.

Concerns were subsequently laid out in a Dec. 18 memo, detailed below, titled "Structure of the Republican Main Street Partnership, affiliated entities and potential concerns," that was circulated among a small group of lawmakers, congressional aides and RMSP board members. The memo was sent to NPR by an anonymous source and was then authenticated by a former Denham aide.

"And then it all started to fall apart," recalled one source with direct knowledge of events.

The source said that in late January, former Rep. Doug Ose, R-Calif., a member of the RMSP board, met with Republican Main Street Caucus lawmakers and told them that their request for the audit was denied. "We're a private organization — you have no right to any of this" was Ose's message, the source recalled.

Ose confirmed the source's account. "My interaction with lawmakers has been direct," he said. "That means sometimes I must tell them 'no' in order to legally protect them from themselves and/or their staff." Ose said RMSP denied the audit because "Lawmakers are legally not allowed to exercise any control over an outside organization."

Lawmakers were stunned and, now, more concerned than ever about what was going on at RMSP, sources said. "What is it about the [organization] that would be so sensitive that it couldn't be shared with allied members of Congress?" said Adav Noti, chief of staff for the Campaign Legal Center, a government watchdog group that specializes in campaign finance laws. NPR briefed Noti on members' concerns about RMSP. Noti said that although lawmakers had no legal right to an audit, there is nothing legally barring RMSP from conducting one for them. "It's a big ask to say to a member of Congress, 'Hey, work with us, and we won't tell you where our money is coming from or where it's going.' That raises red flags," he said.

Without any avenues for recourse, sources said, several of the caucus's most prominent and influential members privately decided they would distance themselves from RMSP, including Davis, as well as Reps. Tom Emmer of Minnesota and Susan Brooks of Indiana. NPR contacted representatives for Emmer and Brooks for comment on these events. Their offices did not dispute the account as described by NPR but declined to comment.

In early February, Republicans decided not to renew the Republican Main Street Caucus as a member organization in this Congress, essentially dissolving the group. It is no longer registered in the official list of member organizations in this Congress.

At some point earlier this year, RMSP removed Davis from its affiliated member list on the group's website. There is no way for lawmakers to join — or quit — RMSP. A former RMSP employee told NPR that if a member ever accepted a donation from the organization, that member was promoted as an RMSP member.

Ose said Davis asked to be removed from RMSP's website and "we complied with his wishes." Davis declined to comment.

A web of allegations: "Sarah is the only person in a position to know"

The Dec. 18 memo obtained by NPR detailed concerns that members were "being used to raise money on behalf of entities that pay large sums to staff without proper oversight" and estimated at least $700,000 in compensation paid to Chamberlain based on data culled from disclosure reports.

"Given Sarah Chamberlain is officially the President and CEO AND Treasurer of each entity this raises significant conflict issues. Her salary represents roughly 20% of the RMSP operating budget," the memo states.

Ose disputed the $700,000 figure and said Chamberlain's total compensation for 2018 was $500,000. Ose categorically rejected the allegations outlined in the memo and said RMSP is "very careful" about complying with the law. He also said RMSP "made available" to RMSP members copies of internal financial audit reports for RMSP entities. (RMSP provided NPR with those documents, which can be viewed here and here.) However, lawmakers wanted an independent audit, one that would include an assessment of the organization's structure, management and objectives.

The memo includes a bullet-point list of concerns regarding Chamberlain's near-total control over RMSP and its related fundraising and advocacy arms.

"How can we disprove a co-mingling issue when the President and Treasurer of all organizations is the same person?" The memo states, "How does money flow between each entity? Is there any wall in place? If so how do we prove it? Sarah is the only person in a position to know as the only check signer."

Chamberlain is the president and CEO and sits on the board of RMSP, but she also runs the group's superPAC and the group Women2Women. Chamberlain was also listed as the treasurer of the Republican Mainstreet Partnership PAC at the time the memo was written, but documents filed with the Federal Election Commission after the 2018 midterms now list Ose as treasurer — a decision that Ose said was made "out of respect" for RMSP members.

The memo alleges Chamberlain engaged in personal behavior that violated campaign finance laws that ban direct coordination between candidates and outside groups. "Sarah Chamberlain has consistently been witnessed telling members of Congress that she 'has a superPAC. If you need help in your race just call me.' In addition Sarah frequently calls on members to direct donors to her so she can 'earmark' money for their races. Each of these actions is against the law."

Ose did not respond directly to NPR's question about whether Chamberlain ever engaged in the behavior described in the memo. "We make clear what we are working on and keep our ears open," he said.

Chamberlain's personal focus on the Women2Women initiative also raised questions among caucus members about her political judgement. The memo asks why she was in GOP Rep. Steve Knight's California swing district days before the midterm election promoting Women2Women at an event featuring actress Vivica A. Fox, which was unrelated to the GOP's efforts to hold seats in the closing days before the election. A Nov. 3, 2018, Instagram post under the Women2Women account corroborates this, featuring a picture with Chamberlain and the actress. Knight was one of the GOP incumbents who lost on Election Day.

The memo questions how Women2Women promotes the core mission of RMSP to elect and support centrist Republicans and whether it amounts to little more than a vanity project. "Members have been informed that Main Street pays two publicists to book media and promote Sarah Chamberlain. Who pays for this?" the memo states. "Members are under the impression that RMSP exists to promote the members, is this consistent with that mission?"

Asked if Chamberlain had any response to the concerns raised by lawmakers about her management of the organization during the 2018 election, Ose responded: "No. Upon examination of the facts and review of public documents, the allegations were shown to be inaccurate."

However, three sources said there was internal turmoil at RMSP over the clash between lawmakers and Chamberlain. Sources said an RMSP board member, Jennifer LaTourette, quietly left in March when it became clear RMSP would not comply with lawmakers' request for a full governance audit of the organization. She is no longer listed as a board member on its website. When reached by telephone by NPR, LaTourette declined to comment.

Her late husband, the former Rep. Steve LaTourette, R-Ohio, was the head of the Republican Main Street Partnership until his death from pancreatic cancer in August 2016. "It didn't used to be like that under LaTourette," the same former GOP lawmaker with direct knowledge of the situation said. "There were checks and balances. Everybody had faith that we had somebody that understood the law and ethics and had members' best interests in mind."

A closer look at Women2Women: "The best part of my job"

It is Chamberlain's most recent initiative that provoked one of the angriest reactions from Capitol Hill. Initially launched as an effort to promote GOP women lawmakers, Chamberlain is rebranding it as a nonpartisan outfit to promote suburban women's issues.

Last month, on July 29, NPR attended an on-the-record briefing with Chamberlain in which she promoted her Women2Women conversations tour. NPR was not aware of the allegations against Chamberlain until after the briefing, which prompted further reporting that led to this story.

"This is the best part of my job," she told reporters, characterizing the initiative as "a whole empowerment event" during which she conducts focus groups with college-educated, suburban, professional women voters in the 25-to-65-year-old demographic.

The tour has already taken her to Columbia, S.C.; Pittsburgh; Austin, Texas; and Chicago this year, and stops are planned in five additional cities. Chamberlain said she does not ask about politics at these events, just the issues that concern this core swing-vote demographic. However, she said she then takes the data culled from these focus groups and uses the data to inform Republican lawmakers in private briefings.

"So what we do is we then get to come back, talk to the members in September, the members of Main Street — will get a full briefing on what suburban women are talking about," she told reporters. Chamberlain said the women are aware that she uses these sessions to meet with members of Congress. "They like it because it's a direct tie back to the officials. So even though I take off my CEO of Main Street hat, they all know that what they tell me, and what we learn, I can bring back to the members of Congress."

At the same time, Chamberlain insisted: "It is a totally separate part of Main Street." She said Women2Women events have been conducted in RMSP members' congressional districts. "But when we're in that district, we don't even talk about the member," she said.

The law prohibits nonprofits from supporting partisan campaign activity. According to a determination letter from the Internal Revenue Service dated June 20, 2019, Women2Women qualifies as of June 7 for a 501(c)(3) tax designation, which is given to nonprofit groups and allows donors to make tax-deductible contributions. Further, Women2Women identifies as a 501(c)(3) on its official Instagram page.

Chamberlain's admission that she uses Women2Women focus group data to provide insights to benefit Republicans raises a red flag, said Noti of the Campaign Legal Center. "If it's information to be used for campaign purposes — 'Here's what your constituents are talking about, and here's what you need to say or do to get reelected' — that's impermissible," Noti said. "Maybe they're very careful about how they word it to try to walk that fine line, but that is certainly getting very, very close to, if not across, the border of legality."

When asked how Women2Women could engage in political activity, Ose said Women2Women's application for 501(c)(3) status is not yet finalized, despite IRS documentation to the contrary. "When it is finalized, we will comply with laws governing 501(c)(3) organizations," Ose said.

NPR contacted, Mark Diskin, a D.C.-based tax attorney, who said he is not aware of any finalization process. "Once you receive a determination letter from the IRS, you are considered a 501(c)(3)," Diskin said.

The impact: "It's been heartbreaking to watch"

The quiet implosion of the relationship between the Republican Main Street Caucus and the Republican Main Street Partnership comes at a consequential time for the GOP. The party is struggling to recruit more centrist, diverse, female candidates to give Republicans a fighting chance at winning a House majority again in 2020. "Now is the time we need it," said one source.

"It's been heartbreaking to watch," said a second source, who added: "We saw so much opportunity to really build a first-class infrastructure." The pervasive, ongoing concerns about Chamberlain and her management simply raised too many red flags to continue work in a caucus that shared its name, multiple sources said.

Lawmakers in the Republican Main Street Caucus had no oversight of the private Republican Main Street Partnership or control over its decision-making, but politically, the public would be less likely to differentiate the two if it were ever caught up in a scandal.

"Anytime you're raising and spending money based on your access to and relationship with members, they have a right to ask if it's being done transparently and legally," said one GOP lawmaker who was in the Republican Main Street Caucus. "The concern in this case is that it wasn't."

Lawmakers considered rebranding the caucus for this Congress but decided against it, two sources said. Another moderate faction, the Tuesday Group, continues to exist with a seat at the leadership meeting table, and many former Republican Main Street Caucus members participate in that caucus. "Members have gotten more involved in that. That has now become the caucus, the place, to discuss policy," the former GOP lawmaker said.

RMSP blamed the fallout with lawmakers on "disgruntled individuals."

"To paraphrase Winston Churchill, I have never seen so few people use so many exaggerations to create such chaos," Ose said. "Fortunately, I have direct access and knowledge of the actual facts and have exhausted time and resources clarifying the truth."

Meanwhile, the next Women2Women event will be held in Greensboro, N.C., in September.

Lexie Schapitl contributed to this report.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

AILSA CHANG, HOST:

In the months following the 2018 elections, the Republican Party's centrist coalition was quietly imploding. Members of that coalition had some hard questions for an allied outside group. That group raises money based on the perception that it has close ties with centrist Republican lawmakers. And when they started asking their questions, things started to fall apart. None of this has been previously reported.

NPR congressional correspondent Susan Davis has the exclusive on what happened and what it means for Republicans going into 2020.

Hey, Sue.

SUSAN DAVIS, BYLINE: Hey, Ailsa.

CHANG: So first, can you just explain who are the key players in this story you have?

DAVIS: It involves two key groups. The first group is a number of House Republicans who formed a coalition in Congress called the Republican Main Street Caucus. It was about 70 lawmakers. It was chaired by Republicans, including Rodney Davis of Illinois, Jeff Denham of California.

The caucus was formed inside the House to sort of counterbalance the weight of the conservative wing of the party. And they named their caucus after the important second group, the Republican Main Street Partnership. It's a group that's been a fixture in Washington since the late '90s. It mainly raises money to help candidates and advocates for fiscally conservative, socially moderate Republicans.

CHANG: OK.

DAVIS: The idea was that these two would work together to build up the infrastructure to support the party's center-right coalition.

CHANG: OK, so the way I understand it, everything starts off with the best of intentions, lawmakers want to work with this Republican Main Street Partnership. The partnership now has an official member caucus on its side. And then Election Day comes around. Democrats take over the house. You report that this is when the relationship started to dissolve. What happened?

DAVIS: There had been a number of concerns about how the partnership was being run under its current president, Sarah Chamberlain. She's a key figure in this story. After the election, everyone was angry, and there was this series of meetings between Republican lawmakers and Chamberlain where they just start demanding answers about how she's running the organization. They want to know how much she pays herself; more importantly, why the group still has more than $700,000 in unspent campaign funds.

CHANG: Wow.

DAVIS: This is money that could have gone to try and save more Republicans. They want more details on all of the groups subentities - its superPAC, its advocacy arm; basically, how the whole operation is being run. So in December, the caucus votes unanimously on a resolution to suspend political activity with the partnership, until a full audit of the organization is completed.

So in January, the partnership sends a member of their board, former California congressman named Doug Ose, up to the Hill, and he essentially tells lawmakers, you have no right to this information.

CHANG: So how does the partnership explain why they rejected the audit?

DAVIS: So their argument is that the partnership's a private organization, and lawmakers have no right to the audit requests. And he's totally right. But I talked to Adav Noti at the Campaign Legal Center. It's a government watchdog group that specializes in campaign finance laws. And he also said there's no reason they couldn't comply with an audit, either.

ADAV NOTI: It's a big ask to say to a member of Congress, hey, work with us, and we won't tell you where our money is coming from or where it's going. That raises red flags.

DAVIS: These red flags were so overwhelming to lawmakers that they decided to quietly end the official caucus in February. It no longer exists.

CHANG: OK, so then your reporting revealed that a secret memo outlined a number of serious ethical and legal concerns about Chamberlain and the partnership. Tell us what was in this memo.

DAVIS: Lawmakers had a lot of problems about Chamberlain's political judgment and why she was prioritizing time on projects that didn't benefit them. One example - she's spending a lot of time focused on something called Women2Women. It's an outfit she says is about women empowerment and engaging suburban women. It's being made into a 501(c)(3) organization.

CHANG: Which is very important here.

DAVIS: Very important because that means it's a nonprofit, and it can't, by law, engage in political activity.

CHANG: Right.

DAVIS: So lawmakers are questioning what the point of a project is if it can't engage in political activity...

CHANG: (Laughter).

DAVIS: ...And also whether it's being run within the bounds of campaign finance and tax laws. I want to say, Chamberlain and the partnership rejected all of the allegations against them. They say they comply with all laws and blame this whole fallout, in their words, on disgruntled individuals on Capitol Hill.

CHANG: What does this mean for the Republican Party right now?

DAVIS: If the party doesn't have the fundraising, the infrastructure to recruit and back up these kind of centrist candidates, the chances of putting the House in play in 2020 just get that much harder.

CHANG: NPR's congressional correspondent Sue Davis, thank you.

DAVIS: You're welcome.

CHANG: And there is plenty more reporting in this story, which you can read at npr.org. Transcript provided by NPR, Copyright NPR.