Democratic Candidate’s Family Foundation Has $1M in Tobacco, Fossil Fuel Assets
“In the 21st century, it’s time to accelerate our transition to a clean-energy economy, reduce our carbon footprint, and preserve our planet for future generations,” Democratic House candidate Dean Phillips proclaims on his campaign website.
But an investigation into his family’s foundation showed that their endowment had assets worth more than $1 million from multiple companies that seemingly are at odds with the candidate’s stated values — with investments in multiple fossil fuel companies and the tobacco giant Philip Morris, according to their 2017 tax form filed after the campaign started.
Phillips, who is a trustee of the Jay and Rose Phillips Family Foundation of Minnesota, is running in a suburban-Minneapolis district that will be key for the Democratic Party winning a House majority in November. Phillips, who is Jewish, has the backing of the Democratic Congressional Campaign Committee’s Red-to-Blue campaign, which gives him increased access to party data and resources.
Phillips’s campaign downplayed the investments, saying the foundation is “managed by a team of professionals” and “not affiliated in any way” with the campaign.
“Dean is running a campaign based on getting special interest money out of politics. His opponent, Erik Paulsen, has taken the 6th most of 435 Members of Congress from special interests,” spokesman Richard Carlbom wrote in an email. “Dean personally invests in companies that reflect his values and has asked his investment advisors to divest from companies incongruent with his values. The family foundation founded by Dean’s great-grandparents in the 1940’s has shared tens of millions of dollars with communities and has long been among the largest contributors to the Minneapolis Jewish Federation.”
Phillips’ family made millions in the liquor industry before helping to build one of the first integrated hospitals in the city.
His grandfather, Jay Phillips, created the family foundation in 1944 to fight discrimination, support health education and aid the disabled.
“The family always tries to help those who are disadvantaged, whether it’s because of religion, race, or abilities,” Phillips told the local Jewish website TC Jewfolk in a November 2017 interview. “Medical research has always been near and dear to our families’ hearts because in the absence of government support, someone has to fill that gap and that’s how we’ve always looked at philanthropy.”
Apart from the $94,345 they claimed in value from their Philip Morris shares, the endowment listed other investments they held as recently as Dec. 31, 2017, including $100,152 in Chevron and $68,082 in the controversial genetically modified seed producer Monsanto.
To be sure, the investments are a small slice of their $53 million overall portfolio, and the foundation spent more than $3 million in 2017 on organizations including $25,000 to the local Planned Parenthood, $200,000 to the Minneapolis Jewish Federation and $10,000 to Doctors Without Borders.
Experts said foundations often have to balance having a diversified portfolio to fund their work in the long term with making sure their values are represented in all their holdings.
“If you have diverse [investments] and the endowment is gaining more money every year, they are able to grant more money,” Sara Nason of the website Charity Navigator told the Forward. “It’s becoming increasingly difficult to put together a diverse portfolio that is completely pro-social.”
Phillips also came under fire for investing about $2 million of his personal income in energy companies, according to a January 2018 report in the conservative Washington Free Beacon. He said soon after that he was divesting from any company that did not match his values.
Phillips’s most recent personal finance disclosure form, filed Aug. 13, shows he had investments in Exxon Mobil, ConocoPhilips and Philip Morris.
Jewish Democratic Council of America chair Ron Klein told the Forward that the organization decided to endorse Phillips in part because he has pledged not to take any funds from corporate political action committees, which raise funds from special interests.
“That’s a pretty clear statement of intent to make sure you’re not going to be influenced,” Klein said. “[He’s] taking a very clear path.”
So-called Super PACs have become more of an influence in politics since a 2010 federal court decision said they could spend unlimited amounts on races as long as they don’t coordinate with campaigns.
Phillips has raised more than $2.4 million from individual contributors. His rival, Republican Rep. Erik Paulsen, has raised more than $3.6 million overall, more than half of which came from special interests.
The Democrat has organized a strong grassroots campaign, driving around the district in a converted retro milk truck.
Phillips describes himself as “fiscally responsible, socially inclusive” and doesn’t shy away from his privileged background.
“While luck brought me into a family that afforded me great opportunity, it also demanded accountability, responsibility, hard work and civic engagement,” he wrote on his campaign site.
Paulsen’s campaign did not return a request for comment. The Minneapolis Jewish Federation also did not return an immediate request for comment.
Aisha Tahir contributed reporting.