Unsealed Court Documents Reveal NGP Hunt for Profits from Republican-Friendly Groups

Details on Secret Partnership, “Democrat-only" Software and Data Conversion for Big Donors to GOP

NGP website drops claims of serving “only Democrats and their allies”

Washington, DC — Last week, a federal court released hundreds of pages of previously sealed documents showing NGP Software, Inc.’s five-year “secret” partnership with Capitol Advantage under which CapAd could sell NGP’s software to “corporations, trade associations and right-leaning 527s” without disclosing that NGP was the source. NGP had spent considerable time, effort and expense for several years attempting to keep the information under seal in a lawsuit filed against it by non-partisan rival Aristotle International.

Aristotle is a non-partisan vendor that for 25 years has served all parties equally without regard to party affiliation or political views.  Aristotle contends that it is a deceptive marketing practice for a competitor, in this case NGP, to claim to be serving only Democrats and their allies, when in fact it has a secret arrangement to also help groups that greatly favor the other side.

The newly released documents contain revelations that may cause some Democrats who have touted the company to question NGP’s integrity and suitability as a vendor, especially one entrusted with sensitive political contact data. For example, the documents show that:

• NGP provided software through CapAd and has converted the data for political organizations that have financially supported Republicans over Democrats — in some cases by margins of 3-1, 4-1, and 9-1.
• NGP charged its own Democratic clients far more than what NGP was paid for software provided via the partnership to groups that give most of their financial support to Republicans. The unsealed portion of the agreement reveals that NGP was to be paid as little as $200/month, or 20 percent of the fee charged by CapAd, for NGP software through the partnership.
• For years, NGP repeated its advertising mantra that it serves “only Democrats and their allies.” Yet NGP's director of marketing, Chris Massicotte, admitted under oath that organizations donating more to Republicans than Democrats are not “Democratic allies.”
• Unlike Massicotte, NGP officers attempted to justify NGP’s willingness to provide software and data conversion for political groups that greatly favor Republicans by admitting under oath that:
  • NGP defines the term Democratic “allies”, for purposes of someone NGP could provide its software to, to include an organization that might contribute only a single dollar to Democrats and $100 million to Republicans.
  • NGP is willing to provide its software for those who contribute far more heavily to Republicans than Democrats.
  • NGP is "similarly-minded" to groups that make 80 percent of their donations to Republicans and 20 percent to Democrats.
  • NGP's "corporate philosophy" is consistent with selling to right-leaning political organizations.
  • NGP would provide its software for groups such as those making 90 percent of their contributions to Republicans.
• NGP officers also attempted to justify NGP’s non-ideological hunt for profits by defining “Democratic allies” to include literally all “who work with or associate with Democrats,” which could include virtually any heavily Republican-leaning person or group with even an infinitesimal association with Democrats.
• NGP founder Nathaniel Pearlman claimed under oath that he “didn’t notice” the “right-leaning” language in the partnership agreement until Aristotle filed the lawsuit, although he “may have been aware of it” when he was working on the document. (The unsealed portion of the partnership agreement, which Pearlman negotiated, also reveals the procedure for deciding if a 527 group was “right-leaning” or “left leaning”, for purposes of determining whether NGP or CapAd would provide NGP’s software to that group.)
• Pearlman testified that one of the reasons he entered the arrangement with CapAd was “for money” and not for any “ideological reasons”.
• Pearlman misled the Wall Street Journal by touting NGP’s partisanship without divulging that less than three months earlier he had signed the secret partnership deal to allow the sale of NGP’s software to right-leaning groups through CapAd. The Journal then published an article—which NGP widely circulated – noting that NGP was founded “with a mission to help only Democrats.”
• Together with public records, the documents show that groups using NGP’s software had already donated more than $8.8 million to GOP campaigns and committees as of January 2009.
• Several GOP congressional candidates who defeated Democrats by less than 1,000 votes received last-minute contributions from groups using NGP software.
• Most of the partnership agreement itself, and other details about the deal that NGP does not want revealed, remain under seal.

Without explanation, NGP also apparently dropped from its website its ten-year marketing mantra that it serves “only Democrats and their allies.” In 2008, as word of Aristotle’s allegations began to spread, NGP sent an email to clients that contained the phrase “a small number of non-partisan PACs use a version of our software”. The email fails to disclose that these “non-partisan” PACs include those that are heavily Republican-leaning, even to the point of favoring Republicans with $9 in contributions to every $1 given to a Democrat.

Presumably, NGP slipped this inconspicuous phrase into an email, without any disclosure about the heavily Republican-leaning PACs, in order to try to mislead others that this seemingly innocent characterization was consistent with NGP’s “Democrats and their allies” mantra. NGP even recently added a parenthetical reference in small print on its website about selling to corporations and trade associations through CapAd, but not until after the court ordered documents about the relationship to be disclosed, and again, without ever letting on that NGP permits such clients to include Republican-leaning PACs.

NGP Clients Interested in Refunds

“Would most people look at NGP’s advertising and think that it means NGP would ever be willing to help PACs that contribute far more heavily to Republicans? Of course not,” said Aristotle’s CEO, John Aristotle Phillips. He believes that some NGP customers might reasonably want their money back as a result of the revelations. “Our lawsuit contends that NGP’s marketing as to the purity of its partisanship can be a material element in decisions by some to go with a particular vendor. Several former NGP clients have informed Aristotle that they felt deceived by NGP’s marketing and further believed they are entitled to some consideration, either in the form of refunds or discounts. Any Democratic Party groups or consultants that may have been deceived into helping NGP prosper may now insist that if candidates were misled by NGP, they should get a refund if they request one.”

Aristotle has previously released the results of a telephone survey in which current and former NGP clients were asked the following question:

“If your campaign software vendor claimed only to be serving your party’s interests, but this proved not to be the case, do you believe you would be entitled to a full refund, a partial refund or a discount on future services?”

Seventy one percent of those who were asked answered in the affirmative. Phillips stated that if NGP hasn’t done right by its customers, they should look to openly non-partisan Aristotle, which has successfully made inroads against NGP in the Democratic software market in the last several years through the Aristotle 360 and Complete Campaigns BackOffice products.

NGP to Continue Keeping Secrets, Working Against Democratic Interests

The Court noted in its decision to unseal the documents that NGP and Capitol Advantage have “renewed their arrangement for another term ending on January 13, 2013.” Phillips said, “It is extraordinary how much time, effort and money NGP has devoted to trying to keep this all secret. Now they will have to concoct some rationalization for customers to persuade them that there is nothing “un-Democratic” about NGP providing software and data conversion for heavily Republican-leaning PACs because they are technically non-partisan, or aren’t 527s.”

Aristotle is not seeking compensatory or punitive damages from the lawsuit. It is asking the court for a ruling that prevents NGP from falsely advertising itself as serving only Democratic interests and requires full and prominent disclosure by NGP of the ways it has violated the core message of its decade-long marketing campaign.

“Most sophisticated people in politics know that even technically "non-partisan" corporate PACs' contributions can greatly favor Republicans, and that they can and do tilt elections, said Phillips. “But NGP, with year after year of claiming to serve “only Democrats and their allies”, and its partial “disclosure” about the CapAd arrangement, deceitfully suggests that this is not what is happening here. In the context of this NGP advertising, I believe that most people would naturally assume that these “non-partisan” corporate PACs that NGP allowed to use its software would not favor Republicans. It is incredible that, five years after the lawsuit was filed, not once has NGP ever acknowledged  publicly that many of  the so-called "non-partisan" PACs using its software were heavily Republican-leaning."

He added, “NGP’s advertising has been false, misleading, and fundamentally dishonest. The court denied NGP’s motion for summary judgment, meaning that we have a provable case for trial. Other documents in this case still remain under seal. The questions every customer should be asking NGP right now are: ‘Why are you providing software and data conversion for right-leaning PACs, why have you charged us more, and what else is in the sealed documents that you don’t want revealed? And why did your website drop the claim that you “only serve Democrats and their allies?’ These questions will be answered at the trial scheduled for November. NGP might as well answer them now.”

Phillips also said, “One additional benefit of the court's granting our request to unseal documents is that Aristotle now can defend itself against NGP’s accusations that we have been lying about them. When almost everything was under seal, NGP could say everything was simply Aristotle’s allegations. Now we can show the actual documents to people. Now we can prove we have been telling the truth.” He then concluded, “Aristotle has been proudly and openly providing technology on a non-partisan basis for 25 years. Our customers appreciate that we strive to provide the best technology and service without appeals to partisanship. We’ll continue to do so.”

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About Aristotle

Aristotle is recognized as a global pioneer in political technology, providing indispensable tools to those who seek to use the democratic process to influence decisions at the ballot box. Every occupant of the White House — Democrat and Republican — for more than 25 years has been an Aristotle customer, as are most U.S. Senators, most members of the U.S. House of Representatives, and Democratic and Republican state party organizations. For information about career opportunities or for client inquiries, go to www.aristotle.com.

Federal Court rules secret partnership agreement with NGP Software “improperly designated as confidential”

(Washington, DC) A federal court has rejected the confidentiality claim of The CQ-Roll Call Group concerning its partnership with so-called Democratic firm NGP Software Inc. The United States District Court for the District of Columbia generally agreed that there was ”no good faith basis whatsoever” for the parties to ask the Court to keep their business relationship secret.

Since 2007, Capitol Advantage LLC (now part of The CQ-Roll Call Group owned by The Economist Group) has fought to keep its partnership agreement with NGP under seal in a lawsuit between NGP and non-partisan rival Aristotle International, Inc. Under the now partially unsealed “PAC Partnership Agreement”, CapAd was authorized to sell NGP’s software to “corporations, trade associations and right-leaning 527s”.

Aristotle has alleged in court that NGP has for years deceptively marketed itself by falsely claiming to serve “only Democrats and their allies”, and NGP has filed counterclaims. NGP now appears to have removed such marketing claims from its website.

In multiple court submissions over the last several years, CapAd has fought to be able to continue to conceal the true source of its “PACBuilder” software from its customers, who include numerous groups that heavily support Republicans. Despite having selectively disclosed the arrangement to some, CapAd claimed that “[it] would create confusion if its customers were to learn that NGP is the true developer of the software”.

The court rejected this argument, and found that the NGP-CapAd agreement “was improperly designated as confidential”. The court noted that the previously sealed agreement “ostensibly expired in January 2009, but NGP and Capitol Advantage have ‘renewed their arrangement for another term ending on January 13, 2013’.”

The court’s ruling effectively gives PACBuilder users the information they need to ask questions that will allow them to fairly evaluate CapAd’s software, data security policies, and technical services under the “renewed” arrangement, as well as to determine whether they will need new software when the “renewed” arrangement with NGP expires.

“CapAd has been concealing this information from most of their customers since the deal was signed in 2004. That’s a long time to pull the wool over their clients’ eyes.” said Aristotle CEO John Aristotle Phillips. “The court’s ruling corrects an abuse by CapAd and NGP of the Court’s protective order process and helps level the playing field. The newly unsealed information will give the political community reasons to question the candor and judgment of those running CQ-Roll Call”, he added.

Phillips stated “CQ-Roll Call paid $43 million to buy CapAd in 2008. Are they concerned that customer ‘confusion’ over the new revelations might lead to refunds? A credible news organization would have been exposing this, instead of joining the cover-up. Those that purport to cover Congress were fighting in court to conceal embarrassing facts from their readers on the Hill.”

About Aristotle

Aristotle is recognized as a global pioneer in political technology, providing indispensable tools to those who seek to use the Democratic process to influence decisions at the ballot box. Every occupant of the White House — Democrat and Republican — for more than 25 years has been an Aristotle customer, as are most U.S. Senators, most members of the U.S. House of Representatives, and Democratic and Republican state party organizations. For information about career opportunities or for client inquiries, go to www.aristotle.com.

Aristotle Beats Competitors in Satisfaction

Company Tops Rivals VOCUS, DDC and CQ/Roll Call/CapAd in Public Affairs Council Customer Satisfaction Rating.

Significant Cost savings and higher marks over 3 rivals in all categories measured: Software, Training, Customer Service and Follow-Up

(Washington, DC) – A respected independent survey conducted annually by the Washington-based Public Affairs Council, shows PAC and Grassroots professionals who subscribe to services from one of the ‘Big Four’ providers rate Aristotle customer care and technology superior to VOCUS, DDC and CQ-Roll Call Group-Capitol Advantage. In the survey, Aristotle receives top grades in all four of the categories in which the four firms’ customers were asked to rate their vendor’s software, training, customer service and follow-up.

The survey respondents also spent significantly less on Aristotle in the categories reported. “Initial Cost” savings by Aristotle customers averaged between $7,200 and $20,193. On “Annual Renewal and Maintenance Cost” Aristotle customers responding to the survey reported additional savings of $7,778, $27,078 and $16,828 as compared to VOCUS, DDC and CQ/Roll Call Group/CapAd customers, respectively.

The Public Affairs Council is a non-partisan, non-political association for public affairs professionals at 550 member companies and organizations. http://pac.org/about Its mission is to advance the field of public affairs and to provide members with the training and information resources they need to achieve success while maintaining the highest ethical standards.

“These are the customers talking. It’s a powerful endorsement and a welcome pat on the back.” said John Aristotle Phillips, CEO of Aristotle. “We have worked very hard at this and the numbers tell the story. Aristotle is the only company to offer 24/7 client service and a 100% unconditional compliance guarantee. Getting high marks for Training and Follow-Up is a real compliment from our clients. And the cost savings are significant.”

The release of the survey follows the decision in March by the Federal Election Commission to close the file without taking action on a rival’s complaint about Aristotle’s powerful data-mining technology (www.fec.gov). Prior to the FEC vote, Aristotle filed a patent on the means by which the company’s software integrates information from millions of contributor and voter records with a campaign’s, PAC’s or advocacy group’s membership lists.

Aristotle has been expanding its advocacy and PAC teams with key hires who focus on political advocacy campaigns that require sophisticated data mining of voter, donor and stakeholder datasets.

The company’s clients are equipped with training and software that leverages highly accurate stakeholder databases and detailed state contributor and voter lists to illuminate exactly how much someone has given, how much they can give, and to suggest the maximum they might agree to contribute where allowed by law. The patent application covers a method by which political professionals can access, mine and harness supporter, voter and contribution disclosure records in a manner consistent with the law and for compliance purposes, rendering the exact information political professionals require.

The Aristotle patent application, prepared by DLA Piper, is entitled: Integration of Voter and Contributor Data Into Political Software and Compliance Systems for Purposes of Solicitation, Compliance, Vetting and Calls to Action.

“We show you the money.” said Phillips. “The biggest sin in fundraising is not to ask. The second sin is not to ask for enough. With the state contributor and voter files, fundraisers for PACs and campaigns will never again overlook a prospect, or leave money on the table by asking for too little. With this technology, PACs and advocacy groups will raise much more money than ever before.” http://www.aristotle.com/show-me-the-money.html While Aristotle’s technology delivers significant advantage in terms of grassroots mobilization and solicitation, the software was designed to allow PACs and campaigns to comply with Federal Election Commission restrictions and state laws impacting campaigns and contributor databases. ¹

About 360™

At its heart, Aristotle 360™ is a data management tool for Political Campaigns, PACs, and grassroots organizations. With 360™ you can store contribution data and volunteer records, manage and engage your donor/support database, develop info-bases on your most important allies and competitors, oversee campaign operations, direct constituent outreach and GOTV activity and streamline your compliance activities – all in real-time within an easily accessible, user-customizable web-based interface. 360™ builds upon the long tradition of Aristotle’s award winning Campaign Manager and PAC Manager software, but introduces several new features to enhance campaign productivity, performance and persuasion. http://www.aristotle.com/content/view/28/62/

About Aristotle

Aristotle is recognized as a global pioneer in political technology, providing indispensable tools to those who seek to use the Democratic process to influence decisions at the ballot box. Every occupant of the White House — Democrat and Republican — for more than 25 years has been an Aristotle customer, as are most U.S. Senators, most members of the U.S. House of Representatives, and Democratic and Republican state party organizations. For information about career opportunities or for client inquiries, go to www.aristotle.com.

¹Any information copied, or otherwise obtained, from any FEC contributor report or statement, or any copy, reproduction, or publication thereof may should not be sold or used by any person for the purpose of soliciting contributions or for any commercial purpose, except that the name and address of any political committee may be used to solicit contributions from such committees. There is no increased fee for inclusion or per record usage of such data in 360, and Aristotle’s FEC contributor data look-up feature also is available at no charge on Aristotle’s website at www.Aristotle.com.