Groups of AGs got thousands from companies their members were policing in 2023

Key players in emerging industries like cryptocurrency and sports betting flooded state attorneys general with cash in the second half of 2023, as the top law enforcement officers have moved to regulate them.

The beleaguered cryptocurrency platform Coinbase, gig-economy companies and sports betting groups gave thousands or tens of thousands each to the Democratic Attorneys General Association or Republican Attorneys General Association in that time, according to documents filed with the Internal Revenue Service last week.

While legal, the donations highlight a common political strategy for businesses or industries navigating challenging regulatory environments. The money unlocks exclusive access at association gatherings and coveted face time with officials outside the courtroom, but it also raises questions about the potential for conflicts of interest between prosecutors and the corporate entities they are charged with policing.

California Attorney General Rob Bonta, a Democrat, is currently probing the lawfulness of daily fantasy sports betting in the state, and other prosecutors have issued warnings of deceptive practices by sports betting companies since the Supreme Court overturned a virtual ban on the industry over five years ago.

Over the last year, the fantasy sports industry has given hundreds of thousands of dollars to associations of attorneys general on both sides of the aisle. A group called Fantasy Sports Operators Coalition gave $125,000 to DAGA, and the Coalition for Fantasy Sports gave about $125,000 to RAGA. The fantasy sports company Underdog Sports gave $35,000 to DAGA, and its competitor PrizePicks gave $750 to RAGA and $25,000 to DAGA. Bonta’s campaign also received thousands from Underdog Sports and PrizePicks in 2023, according to state data.

In a statement, Bonta’s press office said that his “decisions are based solely on the law and protecting the safety, health, and well-being of all Californians.”

The Coalition for Fantasy Sports did not respond to a request for comment. The Fantasy Sports Operators Coalition could not be reached for comment.

Higher contributions offer organizations entry into selective events. Attendance is “key to developing and maintaining open lines of communication with State AGs and their staff attorneys,” the law firm Troutman Pepper said on its website. This month, RAGA is hosting a “Victory Fund Ski Retreat” in Montana, according to the firm’s site. That firm gave $50,000 to DAGA and about $51,000 to RAGA in 2023, according to IRS filings.

In a statement, DAGA President Sean Rankin said offices of the attorneys general do not share information regarding actions or investigations with the association before they’re made public. The association shares names of attendees with the attorneys general prior to events, and their offices can choose not to take part, he said. He maintained that the timeline of donations was usually related to corporate budgets and arrangements with the association.

“Democratic Attorneys General always put consumers first,” Rankin said. “They are the People’s Lawyers. Democratic AGs will continue to hold bad actors accountable for their actions.”

RAGA did not respond to a request for comment.

Sometimes, the donations arrive as attorneys general have indicated their interest in policing a company’s industry. In recent years, the e-cigarette company Juul Labs, for example, has given hundreds of thousands to state attorneys general groups, as those officials sued or negotiated settlements with the company. The company even hired former Massachusetts Attorney General Martha Coakley as vice president of government affairs. Coakley, who has since left Juul, did not respond to a request for comment.

In a statement, a company spokesperson said Juul sees attorneys general as “key stakeholders,” with whom it communicates directly and through associations.

More recently, the Massachusetts attorney general levied $6.2 million in fines for state labor law violations against GoBrands, the company behind the delivery service Gopuff, in March. Less than six months later, the company gave $50,000 to DAGA. It gave the same amount in 2022.

“We have been a member of the Democratic Attorneys General Association since 2019,” a Gopuff spokesperson said in a statement. “This membership is not connected to Massachusetts regulatory decisions.”

It’s not just upstart industries giving to the officials charged with monitoring their behavior. The for-profit healthcare company HCA Management Services in recent years has been under scrutiny by North Carolina Attorney General Josh Stein, a Democrat. In late September, Stein suggested that the company might be violating its agreement with his office and put out a call for patients’ stories in an investigation against HCA. Less than a month later, the company paid DAGA $50,000.

Stein filed a lawsuit against HCA in December over its quality of care.

When asked whether the donation was intended to influence the attorney general, Harlow Sumerford, a spokesperson for HCA, responded in a statement “of course not.” He said the company has donated to both DAGA and RAGA for years.

HCA is one of several entities that gave to DAGA or RAGA while facing potential legal trouble. In June, a number of states took action against the cryptocurrency platform Coinbase for violating securities laws. In late July, Coinbase gave $105,000 each to DAGA and RAGA.

The University of Phoenix, which has been involved in multiple multimillion-dollar settlements related to alleged misconduct, last year gave about $50,000 each to RAGA and DAGA. Idaho’s attorney general, Raúl Labrador, last year sued to block the University of Idaho’s acquisition of the for-profit University of Phoenix.

Amazon, which faces an active lawsuit from more than a dozen attorneys general and the Federal Trade Commission, gave about $150,000 each to DAGA and RAGA in 2023. Johnson & Johnson, which just last month agreed to pay almost $150 million in a lawsuit brought by the Washington attorney general over its role in the opioid crisis, gave $50,000 each to DAGA and RAGA late last year.

In a statement, Johnson & Johnson denied that its donations were in an effort to influence the attorneys general, arguing that, “Facilitating a dialogue with all stakeholders promotes understanding, awareness and more informed policy-making.”

Amazon did not respond to a request for comment.