New York Times, An Unusual $1.6 Billion Donation Bolsters Conservatives:

A new conservative nonprofit group scored a $1.6 billion windfall last year via a little-known donor — an extraordinary sum that could give Republicans and their causes a huge financial boost ahead of the midterms, and for years to come.

The source of the money was Barre Seid, an electronics manufacturing mogul, and the donation is among the largest — if not the largest — single contributions ever made to a politically focused nonprofit. The beneficiary is a new political group controlled by Leonard A. Leo, an activist who has used his connections to Republican donors and politicians to help engineer the conservative dominance of the Supreme Court and to finance battles over abortion rights, voting rules and climate change policy.

This windfall will help cement Mr. Leo’s status as a kingmaker in conservative big money politics. It could also give conservatives an advantage in a type of difficult-to-trace spending that shapes elections and political fights.

The cash infusion was arranged through an unusual series of transactions that appear to have avoided tax liabilities. It originated with Mr. Seid, a longtime conservative donor who made a fortune as the chairman and chief executive of an electrical device manufacturing company in Chicago now known as Tripp Lite.

Rather than merely giving cash, Mr. Seid donated 100 percent of the shares of Tripp Lite to Mr. Leo’s nonprofit group before the company was sold to an Irish conglomerate for $1.65 billion, according to tax records provided to The New York Times, corporate filings and a person with knowledge of the matter.

The nonprofit, called the Marble Freedom Trust, then received all of the proceeds from the sale, in a transaction that appears to have been structured to allow the nonprofit group and Mr. Seid to avoid paying taxes on the proceeds.

Ray D. Madoff, a professor of tax law at Boston College who is the director of the school’s Forum on Philanthropy and the Public Good, said the structure of the transaction was most likely legal but did appear to allow a donor to avoid federal tax obligations from the sale of the company.

Here is how it works: Marble Freedom Trust is registered under a section of the tax code — 501(c)4 — for organizations that focus primarily on what the Internal Revenue Service calls “social welfare” and as a result are exempt from paying taxes. Such groups are allowed to engage in political advocacy, but their supporters are not entitled to deduct donations from their income taxes. Supporters can, however, donate assets that a nonprofit can sell and avoid capital gains taxes on the sale.

“These actions by the super wealthy are actually costing the American taxpayers to support the political spending of the wealthiest Americans,” Ms. Madoff said.

She said that donating corporate shares to a nonprofit was one way that those with incredible wealth skirt taxes when giving away money not just to charities, but to more politically minded nonprofits. …

The mission that the Marble trust lists in its tax filings is vague. “The trust exists to maintain and expand human freedom consistent with the values and ideals set forth in the Declaration of Independence and the Constitution of the United States,” it says in the filing.

The person with knowledge of the matter said that the group’s name derived from the metamorphic rock, signaling the group’s intent to be enduring and maintain a clarity of purpose.

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