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Media Watchdog Under Scrutiny: Board Member’s Firm Receives Six-Figure Payment

Media Matters for America (MMFA), a nonprofit organization dedicated to combating “conservative misinformation” in U.S. media, has come under scrutiny following revelations of a substantial payment made to a consulting firm owned by one of its board members.

According to tax filings, MMFA paid $105,000 in 2022 to ASR LLC, a company owned by Tom Perez, who served on the organization’s board from February 2021 to June 2023. The payment, described as compensation for “consultant advisory services,” has raised questions about potential conflicts of interest within the nonprofit sector.

Perez, a prominent figure in Democratic politics, currently serves as a senior advisor to President Joe Biden. His resume includes stints as Secretary of Labor under President Barack Obama and chairman of the Democratic National Committee (DNC). A White House ethics disclosure reveals that Perez is the sole employee and president of ASR LLC, which he established shortly after joining MMFA’s board.

The timing and nature of this financial arrangement have prompted discussions about the ethical implications of nonprofits engaging in business transactions with their board members. Kristen Eastlick, vice president for research and communications at Capital Research Center, commented on the matter, stating, “It’s important to look at the process, consider the size of the transaction and determine if it’s clear the types of services that board members are providing to the organization.” She added that such transactions are likely to face increased scrutiny due to the potential for private benefits.

This financial revelation comes at a time when MMFA is facing challenges on multiple fronts. The organization recently laid off approximately a dozen staffers, citing resource constraints. MMFA president Angelo Carusone explained to Newsweek, “We’re confronting a legal assault on multiple fronts and, given how rapidly the media landscape is shifting, we need to be extremely intentional about how we allocate resources in order to stay effective.”

The “legal assault” Carusone refers to stems from MMFA’s recent campaign against X (formerly Twitter). The nonprofit accused the platform of placing advertisements next to extremist content, a claim that prompted X owner Elon Musk to sue MMFA for defamation. Musk alleges that the organization “knowingly” fabricated images showing ads from major corporations alongside extremist material.

Adding to MMFA’s legal woes, Republican Missouri Attorney General Andrew Bailey announced a lawsuit against the group in March. Bailey accuses MMFA of engaging in “fraudulent business practices” by soliciting donations from Missouri residents to “trick advertisers into removing their advertisements from X.”

These legal challenges highlight the contentious role MMFA has played in the media landscape. The organization has long been at the forefront of campaigns aimed at deplatforming conservative voices, including efforts to persuade advertisers to cease doing business with Fox News.

As this story unfolds, it underscores the complex relationships between nonprofit organizations, their board members, and the broader political landscape. The substantial payment to Perez’s firm, coupled with MMFA’s recent financial difficulties and ongoing legal battles, raises important questions about transparency, accountability, and the appropriate use of resources in the nonprofit sector.

Neither MMFA nor Perez responded to requests for comment on this matter. As the situation develops, it is likely to fuel ongoing debates about the role of watchdog organizations, the influence of money in politics, and the ethical standards to which nonprofits should be held.

In the meantime, Perez’s ethics disclosure states that ASR LLC will remain “dormant” during his tenure in government service, potentially forestalling further questions about his business dealings while serving in the Biden administration.