Federal election laws and regulations do not apply to media outlets unless they are “owned or controlled by” a political party, committee or candidate and are acting as a media outlet rather than a political one.
But the complaint, filed by Americans for Public Trust, a watchdog group affiliated with former Nevada attorney general Adam Laxalt, a Republican, alleges that Courier Newsroom is not eligible for that exemption and that the media group failed to register as a political group and report its donors and expenses as is required of political groups under federal law.
The complaint points to a June 2019 ACRONYM internal memo, in which McGowan wrote that the group was launching a “for-profit digital media company building out online news properties in seven 2020 battleground states” of Wisconsin, Michigan, Pennsylvania, Virginia, North Carolina, Florida and Arizona.
In the memo, McGowan warned that Democrats are “losing the media war” online to the Republican Party and to President Trump’s campaign, and laid out her plan for Courier Newsroom to counter that GOP advantage.
“Building this media content network — majority owned by ACRONYM — will: Enable Democrats to compete with Republican echo chambers online; Build nimble communications infrastructure for Dems in critical states; Reach voters with strategic narratives + information year-round; Make cyclical investments in paid advertising more cost-efficient + effective over time,” according to the memo, which is included in the legal complaint.
“Through digital storytelling framed to both elevate Democratic candidates and issues important to core audiences, ACRONYM News Corp will finally compete with Republican news properties and narratives where they are already reaching voters online,” the memo reads.
On its website, Courier Newsroom describes itself as “a progressive media company.” On its website, it states: “We believe that by investing in the work of local journalists across the country we can positively impact civic participation and build a healthier democracy from the ground up.”
A staff of reporters and editors work for Courier Newsroom and its affiliated websites, both through aggregating news coverage and through writing original stories, ranging from concerns over the politicization of the Postal Service to the impact of Trump’s response to the coronavirus pandemic.
The local websites under the Courier Newsroom umbrella include the Copper Courier (Arizona), The Keystone (Pennsylvania), Cardinal & Pine (North Carolina) and The ’Gander (Michigan).
Rithesh Menon, the chief operating officer for Courier Newsroom, said in a statement that while the newsroom is left-leaning, it is neither partisan nor political.
“Courier Newsroom is a for-profit media corporation that is filling the void left by shuttering local news,” Menon said in the statement. “We are a progressive newsroom but we are neither a partisan nor political organization, nor are we controlled by any candidate, political party, or political organization.”
He called the complaint politically motivated.
“This complaint, filed by a Republican-led organization in an effort to undermine our values and journalistic integrity, is completely without merit and we have confidence the FEC will come to the very same conclusion,” Menon said.
The complaint comes as researchers raise concerns about the proliferation of websites and groups that purport to be local or business news publications but have ties to politically active groups, including so-called “dark money” groups like ACRONYM that do not disclose their donors.
More than 1,200 such websites have cropped up in recent years, sparking worries that political operatives may be using the demise of local news organizations to create “partisan outlets masquerading as local news organizations,” according to research by the Tow Center for Digital Journalism at Columbia University’s Graduate School of Journalism.
These efforts have been tied to conservatives as well, such as a network of entities covering news critical of elected Democratic representatives and supportive of conservative candidates in Michigan, which was traced to a conservative businessman.
The FEC’s media exemption is applied broadly to account for First Amendment activity, to make sure that anti-corruption rules designed for political candidates and groups do not infringe upon the freedom of the press, legal experts say.
The FEC’s test hinges on whether the entity is a bona fide news outlet that is producing and disseminating the news to inform the public even if it has a political tilt, rather than a political group acting on behalf of a party or candidate.
In a 2019 interview with Bloomberg News, McGowan rejected criticisms that her Courier Newsroom endeavor is a politically motivated effort to sway Democratic voters.
“A lot of people I respect will see this media company as an affront to journalistic integrity because it won’t, in their eyes, be balanced,” she told Bloomberg News. “What I say to them is, balance does not exist anymore.”
Through a spokesman, McGowan declined to comment for this article or on the content of the FEC complaint.
ACRONYM and its affiliated super PAC, PACRONYM, have gotten the attention of many of the Democratic Party’s wealthiest donors, some of whom have donated hundreds of thousands of dollars to support the groups’ efforts, according to interviews with donors and FEC records. Their donations finance an array of initiatives under ACRONYM and PACRONYM, not just Courier Newsroom.
From May 2018 through April 2019, ACRONYM had 100 percent of ownership in Courier Newsroom, according to its 2018 tax return.
ACRONYM said Courier Newsroom now has other investors and that ACRONYM no longer has full ownership.
Caitlin Sutherland, the executive director of Americans for Public Trust, said in an interview that her group is seeking an FEC investigation because it believes that Courier Newsroom is “actually a political committee masquerading as a newsroom and hiding behind a news exemption.”
“The key issue that we are looking to highlight is that they are an unregistered political committee,” Sutherland said. “It’s been well documented since their inception that they were never set out to function as a newsroom. Tara McGowan herself said that they decided to counter the Trump and RNC digital spending, not to disseminate news.”
However, the FEC currently does not have enough commissioners to take a formal vote on the complaint. The independent agency, responsible for enforcing election laws, is facing a mounting backlog of complaints relating to campaign activity.
Axios reported last month that Facebook executives plan to crack down on content creators that have “direct, meaningful ties” to a political entity or group.
Courier Newsroom has purchased at least $1.8 million in Facebook advertising, the complaint notes, citing data from the Facebook Political Ad Archive.