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Saturday, June 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Lawsuit Signals Infighting at Conservative Lobby Group

ALEXANDRIA, Va. (CN) - As the Republican Party capsizes under the weight of Donald Trump's ascendancy, fissures within a powerful conservative lobbying group have brought its leadership to court.

Largely funded through the political network of billionaire brothers David and Charles Koch, the 60 Plus Association pegs itself as an alternative to the left-leaning AARP.

Though 60 Plus describes itself as "nonpartisan," conservative political candidates have earned the bulk of the seniors-advocacy group's support, with millions of dollars spent on attack ads targeting Democrats.

Initiatives to end the federal estate tax throughout the years had the group's founder, Jim Martin, working closely with Republican lawmakers, including former House Speaker John Boehner and Senate Majority Leader Mitch McConnell, R-Ky.

A former Marine with close ties to President George W. Bush, Martin says he flirted with retirement last year but stayed on board at 60 Plus because of the failure to find a suitable replacement.

Martin joined three fellow board members last month in suing another faction of the group led by the 60 Plus' president, Amy Noone Frederick.

Having served as senior adviser to Carly Fiorina's failed presidential bid, Frederick is the wife of former Virginia GOP chairman Jeffrey Frederick.

When the Washington Post reported on Mr. Frederick's ouster in 2009, it noted that he had been dogged by accusations of mismanagement and incompetence, including allegations that he directed business to a company he owned.

Echoing these points in a complaint with the circuit court on Feb. 17, Martin accuses Ms. Frederick of having funneled nearly $800,000 from 60 Plus to companies owned by her husband over the course of four years.

Though an attorney for Ms. Frederick has not returned emails or phone calls about the lawsuit, a spokesman for 60 Plus who refused to give his name for this article passed along a statement on their behalf, denying the claims.

"We believe these claims are unsound and filled with false allegations, and also believe that the court will dismiss this lawsuit in the near future," the purported statement from Ms. Frederick's attorney Seth Berenzweig says.

The 60 Plus spokesman would not otherwise comment on the claims, nor would Martin's own attorney, Victoria Toensing with diGenova & Toensing.

A 2013 tax return for 60 Plus, the most recent filing available on the national nonprofit database Guidestar, shows that the group took in just $9.4 million in total revenue that year, half as much as the year before.

It spent $845,402 on salaries, up 25 percent from the year before, with its highest- compensated officers, Martin and Frederick, taking home $223,105 and $199,585, respectively, in salary and benefits.

Martin says Frederick tried to force him out after he withdrew his retirement plans, causing 60 Plus to disseminate a June 30, 2015, press release with a not-so subtle headline: "Martin Leaves Lasting Legacy as He Steps Down as Chairman of 60 Plus."

That summer, according to the complaint, Martin discovered unauthorized payments to companies controlled by Frederick's husband, communications company Gen-X Strategies and its subsidiary ChargedContribution.com, which facilitates online political contributions.

"The board was previously unaware of the transactions with Ms. Frederick's husband," the complaint says.

Martin further accuses Frederick of falsifying four years of federal tax forms by concealing the relationship to her husband's companies in the business transactions.

The 2013 tax return for 60 Plus, which Frederick signed in May 2015, asks if the group conducted any business with "a family member of a current or former officer." Frederick checked the box "no."

"Ms. Frederick has ignored repeated requests, despite resolutions from the Board directing her to appear and explain the payments to her husband's companies and the apparently false IRS filings," the complaint alleges.

Martin says Frederick remains in control of the association's bank account and no longer recognizes Martin as voting member of the board, claiming his vote can no longer count toward the voting quorum.

The complaint concludes with Martin alleging that the 60 Plus board plans to petition for judicial dissolution.

In the course of seeking comment on Martin's complaint, Courthouse News received an anonymous email containing a Feb. 18 draft of that petition for dissolution. Court records do not show that this petition has been filed, however, and no one would speak to the draft's claims on the record.

Martin's complaint seeks damages, plus an injunction and an accounting, from Frederick, alleging fraudulent concealment and breach of fiduciary duty.

As documented in its tax return, 60 Plus reported a $601,000 deficit for 2013.

Though 60 Plus spent $338,328 on "direct and indirect political campaign activities" that year, it sank $2.2 million into fundraising fees and expenses in 2013, with "other expenses" eating up $8.9 million of its revenue. The top "other expense" for 60 Plus in 2013 was education and advocacy, totaling $3.5 million.

Forthright Strategy, the group's professional fundraiser, brought in $2.6 million via direct mailers, and took home about 10 percent of that figure in compensation, according to the tax return. For mailing services, 60 Plus paid $1.1 million to a company called Century Data Mailing Systems.

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