Acronym, the dark money group behind the Iowa caucuses app meltdown, explained

This isn’t how Acronym wanted to rocket onto the national stage.

The Iowa caucuses debacle drew a lot of attention to a new app made by a company called Shadow that was at the center of many technical failures of the evening. And it’s also putting scrutiny on Acronym — the Democratic group that backed Shadow — which has sought the spotlight in recent months, though probably didn’t hope for this situation.

Acronym is a relatively new Democratic group that launched in 2017 and got active around the 2018 midterms in digital organizing. Its structure is, in a word, complex. Acronym is a nonprofit, but it also has a political action committee — under its nonprofit are for-profit entities that its nonprofit sometimes pays into. It is brazen and ambitious, which is not unique for a political strategy group, but it’s also somewhat shadowy and secretive. And it’s been trying to distance itself from the Iowa debacle, even though it’s really at the center of the storm.

Acronym is a lot of things all at once

If you pay attention to political media, you’ve probably noticed stories about Acronym popping up here and there in recent months.

In November, the New York Times covered its plan to launch a $75 million digital advertising campaign to counter President Donald Trump in 2020, and the Wall Street Journal profiled a former Facebook employee who was embedded in the Trump campaign in 2016 and has since joined Acronym’s ranks. Bloomberg wrote about the Courier Newsroom, a for-profit media company under Acronym’s umbrella that runs multiple local sites that deliver left-slanted news, countering a tactic often employed by the right. Acronym’s CEO, Tara McGowan, has quickly become a high-profile figure in Democratic politics and digital strategy.

Acronym talks a big game when it comes to its political strategy prowess — though it’s new enough and opaque enough that it’s not entirely clear what the organization is actually delivering. Now that Shadow, one of the companies affiliated with Acronym, is under the microscope, Acronym is too.

In the wake of the Iowa caucus debacle, Acronym has tried to distance itself from Shadow. In a statement, spokesperson Kyle Tharp said that Acronym just happens to be an investor in the firm, along with others. “Acronym is a nonprofit organization and not a technology company,” Tharp said.

Except it’s more complicated than that. Shadow is a tech company, and both Acronym and Shadow have described their relationship as an acquisition, not an investment, in the past and on multiple occasions. Acronym and McGowan in the past have touted their work with Shadow — McGowan has often touted it on Twitter and talked about it on a podcast as recently as last month. But now, Acronym has scrubbed its website of mentions of launching Shadow and says it’s just one of multiple investors along for the ride. Acronym’s decision to distance itself from Shadow — or perhaps lying about it altogether — is making the situation worse, not better.

A precinct chair shows the smartphone app made by Shadow that was at the center of the confusion in the Iowa caucuses.
A precinct chair shows the smartphone app made by Shadow that was at the center of the confusion in the Iowa caucuses.
Alex Wong/Getty Images

“I don’t think they’re evil, but in their thirst to take over the world using a bunch of short-term donor money, they leveraged their political connections to get contracts that they didn’t have the expertise to fulfill,” one Democratic strategist told me.

But there’s a lot more to Acronym than Shadow. Under its nonprofit umbrella are multiple for-profit operations beyond Shadow, including the digital media operation Courier Newsroom and Lockwood Strategy, a digital strategy firm that McGowan runs. Acronym also operates a political action committee called Pacronym and publishes a podcast hosted by McGowan as well as a weekly newsletter.

“There’s this whole group of organizations that are feeding each other, and they’re ultimately all controlled by the same group of people,” another strategist said.

Acronym has for months been building itself up as one of the loudest players in the room in Democratic strategy. Now, people are starting to look under the hood.

Acronym did not return requests for comment for this story. On Wednesday evening, McGowan published a lengthy post on Medium as well as a series of tweets attempting to clarify the situation. She sought to cast Acronym as an investor in many of its projects, though she did acknowledge some “warts” in Shadow’s operations and wrote that “progress requires taking calculated risks and doing things differently.” McGowan also appeared to distance herself and Acronym from Shadow. She did not acknowledge Acronym’s attempts to downplay its relationship with Shadow, including altering its website.

Acronym has been around since 2017 — and its reputation has skyrocketed in recent months

McGowan, 34, has deep ties to the Democratic Party and has worked in Democratic circles for years. She started her career as a journalist and according to her LinkedIn profile got into politics when she worked as press secretary for Sen. Jack Reed of Rhode Island in 2010. Then in 2011, she went over to the Obama White House where she worked as a digital producer, after which she had stints at Tom Steyer’s NextGen America and consultancy Purpose. She later headed digital strategy at Democratic super PAC Priorities USA Action. In early 2017, McGowan founded Lockwood Strategy, a digital strategy firm she still runs. A month later, she launched Acronym.

On its website, Acronym describes itself as a “values-driven organization focused on advancing progressive causes through innovative communications, advertising, and organizing programs.” The organization claims that its affiliated PAC helped get 65 progressive candidates elected in 2018 with “new tech and digital-first strategies to register and turn out voters.”

A handful of traits have marked Acronym’s development in recent years: its intertwining with Facebook, its ability to get good press, and, in turn, its growing popularity with donors.

In September 2019, Ozy profiled McGowan as the Democrats’ “most dangerous digital strategist.” In November 2019, the New York Times ran a splashy story about Acronym’s plan to raise $75 million to push back against President Donald Trump on Facebook. The organization had raised only about 40 percent of that amount at the time.

Trump’s reelection campaign manager, Brad Parscale, has cultivated a public reputation for himself as a political digital guru — which, depending on who you ask, is or is not an accurate portrayal — and Acronym plans to answer that. And it has some big names in tow, the most prominent being former Obama campaign manager David Plouffe, who told the Times that the idea behind the effort was to have a Facebook ads mechanism in place before the Democratic Party’s nominee has been picked.

“Our nominee is going to be broke, tired, have to pull together the party and turn around on a dime and run a race for a completely different audience,” he said.

Weeks later, the Wall Street Journal published a profile of James Barnes, a former Facebook employee who had been embedded with the Trump campaign during the 2016 presidential race. The 2,500-word story cast Barnes as a figure who had seen the light and come over to the Democrats’ side with Acronym to try to undo what he’d done in the last election. Barnes isn’t the only former Facebooker in Acronym’s ranks; earlier in the day on Monday, hours ahead of the caucuses, a former Facebook data scientist announced he was joining the organization.

McGowan herself has become an increasingly common fixture in media stories, often commenting on the issues of the day. (Acronym has spoken with and sent statements to Vox about digital political strategy in the past.) When Google announced it would limit microtargeting around political ads, igniting speculation Facebook might follow suit, McGowan slammed the decision and said it wouldn’t curb disinformation but would instead “hinder campaigns and others who are already working against the tide of bad actors to reach voters with facts.” She said the decision affects Google’s ad inventory as well as inventory across the internet. “They are essentially using their market power to limit how campaigns can speak to voters where they get their information,” she said.

But there are indicators that things within Acronym are not as seamless as they would appear from the outside. One Acronym staffer told the Outline it is “far and away the most disorganized place I’ve ever been a part of.” According to the staffer, leadership says it’s just the “startup environment” of a new company, but it’s unclear how many people work at Acronym, or who they work for. There are a lot of blurred lines between the various Acronym outfits — for example, job links on the Courier News website redirect to Lockwood Strategy.

Acronym has gained popularity with big donors, while some onlookers have expressed skepticism

Acronym is a dark money group. That means donations to its 501(c)(4) nonprofit don’t have to be reported, and we don’t entirely know who their money is coming from — or how much they have.

But Federal Election Commission filings show Acronym’s PAC, Pacronym, is doing pretty well. Billionaire hedge funder Seth Klarman gave $1.5 million to the PAC in the fourth quarter of last year, venture capitalist Michael Moritz $1 million, and director Steven Spielberg $500,000, among others. As Recode’s Teddy Schleifer pointed out this week, the donation was Moritz’s first since 2011, and his largest disclosed political contribution ever.

Michael Moritz speaks at the Yerba Buena Center for the Arts in San Francisco on October 19, 2016.
Michael Kovac/Getty Images for Vanity Fair

To raise that much money and obtain such a high profile, an organization like Acronym has to talk a big game. That’s what some of the four Democratic strategists I spoke with — all on the condition of anonymity so they could speak freely on the matter — see as part of the problem. Acronym knows how to get eager donors, especially those who are eager to get in on the next big thing, to buy into what it’s selling.

“Their pitch is that everyone is doing it wrong, and they’re here to disrupt and innovate,” one Democratic strategist told me. “And they don’t always follow through with that in a successful way.”

“On paper it sounds great,” another strategist said. “Investors want to invest in shiny, new, cutting-edge things, but there’s not a ton of actual evidence there.”

Part of the issue is that Acronym’s structure is complex, unusual, and opaque. Its major plank may be a nonprofit, but the entities under it are not. McGowan runs Lockwood Strategy and is, presumably, paying herself a salary out of the companies coffers, which is not illegal. Shadow and the Courier Newsroom are also private companies. So sometimes, when Acronym makes public pronouncements about what it’s going to do and spend on, it’s not clear where the money is coming from — or where it’s ending up. For example, in October, Acronym said it would spend $1 million on digital impeachment ads in swing states. And its FEC filings show that many independent expenditures for digital ad buys against Trump were filtered through Lockwood Strategies, which McGowan runs. That’s all really hard to track.

“With public pronouncements about things they’re doing that don’t happen, there’s less transparency about why,” one strategist said.

Some observers have also raised questions about the Courier Newsroom, which runs hypertargeted local news with a lean to the left. Last year, McGowan told Bloomberg that Courier Newsroom planned to focus on six swing states — Arizona, Michigan, North Carolina, Pennsylvania, Virginia, and Wisconsin — and “fill the news deserts, deliver the facts favorable to Democrats that [McGowan thinks] voters are missing, and counter right-wing spin.”

While politically unbiased news is hardly a new phenomenon in American politics — look at Fox News and the myriad of right-leaning outlets, for example — the Courier Newsroom launch did raise some eyebrows. If this were a Republican operative declaring its strategy like this, a lot of Democrats probably would have criticized it. So the reaction from the left has been a bit awkward.

Lachlan Markay at the Daily Beast drilled down on what’s so odd about Acronym’s approach:

But in trying to take on such a wide swath of digital political roles, ACRONYM has also been drawn into roles that appear to be in conflict: not just political vendor and vote tabulator, but also ostensibly-independent media mogul and Democratic activist.

Such conflicts have been apparent in ACRONYM’s backing of a handful of state-specific media organs billed as editorially-independent journalistic outfits. Through investment in an entity called Courier Newsroom, McGowan’s group has seeded such outlets in the key swing states of Wisconsin, Virginia, Arizona, Michigan, Pennsylvania, and North Carolina. The left-leaning consulting firm Lockwood Strategy, in turn, has helped staff up the outlets, and in at least one case, Lockwood was on the payroll of the Virginia Democratic Party as an ACRONYM-backed outlet favorably covered the party’s 2019 statehouse candidates.

In other words, one McGowan company was drawing a paycheck from the party as another pumped out news content boosting its election prospects.

Acronym’s founders made a bet that donors are often willing to throw money at vague digital projects, especially amid anxieties about the 2020 elections and concerns Democrats are lagging behind in terms of online and data strategy. And so they’ve built out a complex organization that lets them raise money and spend money — including on themselves — with their actual impact remaining unclear. At least until Iowa.

Acronym changed its story after the Iowa caucuses screw-up

Sometimes, despite the best of intentions, technologies fail. And when they do, many would argue that the best path forward is for whoever built the tech to own up to the problem and quickly try to fix it. But that has not happened in Iowa.

This is not to say that Acronym is to blame for the meltdown in the Iowa caucuses. However, it’s become increasingly clear that the organization hurried to distance itself from the situation.

After it came out that the Shadow-built app, which according to Vice was called the IowaReporterApp, was at the center of the Iowa caucuses delays, Acronym came out with a statement saying it was just an investor in the tech company. It read, in part:

Acronym is a nonprofit organization and not a technology company. As such, we have not provided any technology to the Iowa Democratic Party, Presidential campaigns, or the Democratic National Committee.

Acronym is an investor in several for-profit companies across the progressive media and technology sectors. One of those independent, for-profit companies is Shadow, Inc, which also has other private investors.

But the tenuous relationship described in the statement above doesn’t appear to accurate. Or at the very least, both Acronym and Shadow have described their relationship differently in the past.

Shadow was initially a tech firm named Groundbase, founded by Hillary Clinton campaign veterans Gerard Niemira and Krista Davis and funded by progressive nonprofit Higher Ground Labs. The company was struggling after its campaign texting platform failed to take off, and Acronym stepped in to inject some cash and keep it from going bankrupt. They launched Shadow from there and new products, including an email app that was supposed to help the Democratic Party centralize its data. In a 2019 article, Shadow described its flagship product as a “universal adapter for political data and technology.” In practice, what that means is pretty indecipherable.

Acronym distancing itself from Shadow is a new development. In 2019, McGowan celebrated acquiring Groundbase and marketed the company openly on Twitter. Acronym put it on its website as well. While Acronym has since clarified it doesn’t own Shadow entirely, the organization has previously said it is “launching” Shadow and described the deal as an acquisition. On LinkedIn, Niemira lists himself as a former Acronym employee.

The problem is, Acronym left a lot of evidence that suggests it used to have a much closer relationship with Shadow than it’s now admitting to. According to the Intercept, for instance, Acronym and Shadow share an office space in Denver, Colorado, and as recently as last month, McGowan said Acronym was the “sole investor” in Shadow.

The, well, shadow around Shadow has been part of what’s so weird about the Iowa debacle. Prior to Monday, Shadow’s involvement in the Iowa caucuses had been kept secret. The Iowa Democrats said they were using a new app, but they wouldn’t name it, arguing that it was a security precaution to keep it from being hacked. Had they not been secretive about it, maybe someone would have noticed the problems with it prior to caucus day. Multiple sources told the Times that the app was under-tested and that caucus volunteers were poorly trained on how to use it.

Curiously, David Plouffe was asked about Acronym and Shadow on MSNBC on Monday as the Iowa caucuses debacle unfolded. Plouffe, seemingly unfamiliar with the app, said he didn’t know about it and had spoken via text with the CEO — presumably McGowan — who confirmed that Acronym was an investor in the tech. “I have no knowledge of Shadow or what’s happening,” he said. It’s entirely possible that Plouffe hadn’t heard of Shadow, as a board member whose main role seems to be to boost the group’s profile and fundraising. The Acronym team seems to have decided to stick with that distancing of ties to the app.

Regardless of the level of Acronym’s involvement, it still remains unclear how Shadow managed to release such a problematic app for such an event as important as the Iowa caucuses. One strategist I spoke with speculated this may have simply been a case of an overly ambitious agreement between Shadow and the Iowa Democratic Party, which reportedly paid just $60,000 for the app. Perhaps there was just too much excitement over the new, shiny thing.

“This has all the markings of a pet project of someone who says, ‘Oh, we can do that,’” the strategist said. “You let a company that has no track record just build the most important thing you’ve probably done in the last decade, and yeah, it was going to fail.”

Was Iowa just a massive screw-up, or is there something more nefarious at foot?

At best, Acronym’s behavior around Shadow could be described as odd. That and the Iowa Democratic Party’s initial secrecy around its relationship with Shadow has led to a number of conspiracy theories around the app malfunction and results delay. Some Bernie Sanders supporters have suggested this is an effort to undermine the Vermont senator, who prior to the caucuses was leading the polls, and boost a more establishment-friendly candidate, namely, Pete Buttigieg. Some on Trump’s side have claimed this amounts to rigging the election as well. And after the Des Moines Register’s Iowa poll was pulled from being released over the weekend, suspicions and conspiracies had already been afoot.

Shadow is raising even more suspicion now that its work with Democratic candidates has also been revealed. Buttigieg, Joe Biden, and plenty of others have paid Shadow for services, and in the past, McGowan has expressed her support for Buttigieg. (McGowan’s husband is also a senior strategist for Buttigieg.) Some Acronym employees have previously worked for Hillary Clinton and Barack Obama and are well-connected among Democratic insiders.

Many on the left — especially Sanders supporters who believe the cards were stacked in favor of Clinton in the 2016 election — are highly skeptical of the legitimacy of the Democratic primary.

During the last election, the Democratic National Committee held few debates and at awkward times, which some alleged was an effort to keep Sanders from getting airtime, and undertook other efforts that appeared to favor Clinton. Superdelegates pledged to her early in the process, seemingly anointing her the nominee. Sanders’s backers believe the Democratic establishment doesn’t want him to win the nomination this time, either (and indeed, some don’t) and worry about what lengths they might go to in order to stop him. Iowa’s big app fail doesn’t appease those concerns, and Acronym’s lack of transparency around its ties doesn’t help.

That there is some bad blood regarding Acronym among Democratic politicos — which is natural in any competitive industry — has become clear in the wake of the Shadow debacle. One strategist told me that the scrutiny on the organization was natural — it’s very young, very hyped, and seems primed for a misstep. Another was more cutting in their assessment of the situation: “People have been waiting for this to blow up and did not foresee that this would blow up in quite a spectacular way.”