In an underreported move on Aug. 14, the chairmen of the House Ways and Means Committee and the Oversight Subcommittee announced a joint examination into whether nonprofits have acted as a funnel for foreign funding intended to influence domestic elections, in violation of U.S. law. The two respective chairs, Reps. Jason Smith, R-Mo., and David Schweikert, R-Ariz., released an open letter soliciting input from the public.
The Internal Revenue Service publishes Code 501, which regulates what different types of tax-exempt corporations can claim as permissible activities. The most familiar political nonprofit corporations allowed under this code are 501(c)(3), 501(c)(4), and 527 groups, among several others. The IRS employs a large number of agents dedicated to tracking compliant activities and financial transactions of these groups.
On the Ways and Means Committee website, members announced they are examining whether tax-exempt groups are violating the prohibition on certain activities, including funneling funding from foreign sources. An open letter to these groups requests “information and input on existing rules and regulations governing them and foreign sources of funding for tax-exempt organizations and what, if any, policy changes Congress should consider.”
Among other examples, the open letter cites news reports of the financial activities of a Swiss billionaire named Hansjörg Wyss, who has used a network of dark money groups to donate to radically leftist causes and campaigns in the U.S. According to a report in The New York Times in 2021, Wyss’s foundations gave direct donations in the tens of millions to pro-Democrat and anti-Trump nonprofits:
Beneficiaries of his direct giving included prominent groups such as the Center for American Progress and Priorities USA, as well as organizations that ran voter registration and mobilization campaigns to increase Democratic turnout, built media outlets accused of slanting the news to favor Democrats and sought to block Mr. Trump’s nominees, prove he colluded with Russia and push for his impeachment.
The conservative think-tank Americans for the Public Trust filed a complaint at the Federal Election Commission (FEC) over Wyss’s financial activities, noting that under U.S. law, Wyss cannot directly or indirectly donate to federal political campaigns.
In my 2019 book, Behind the Curtain, I attempted to chronicle the vast array of dark money nonprofit organizations used to spread hundreds of billions of dollars annually to the most radical of leftist causes — most of it exempt from taxes. I reached the conclusion that the amount of foreign influence in our body politic defies the imagination of most American voters and desperately needs to be investigated. My book cites examples of foreign influence over environmental policy in blue states such as Oregon and Washington, promotion by the Chinese Communist Party (CCP) of radical protest movements, and foreign funding of environmental donor networks.
In Chapter 3, “Greenwashing,” I cite a 2014 minority report by Senate Republicans investigating these suspicious foreign funding activities:
An elite group of left wing millionaires and billionaires, which this report refers to as the “Billionaire’s Club,” who directs and controls the far-left environmental movement, which in turn controls major policy decisions and lobbies on behalf of the U.S. Environmental Protection Agency (EPA). Even more unsettling, a dominant organization in this movement is Sea Change Foundation, a private California foundation, which relies on funding from a foreign company with undisclosed donors. In turn, Sea Change funnels tens of millions of dollars to other large but discreet foundations and prominent environmental activists who strive to control both policy and politics.
The report goes on to state, “The failure to openly acknowledge this force and the silence of the media with whom they coordinate further emphasize the fact that until today, the Billionaire’s Club operated in relative obscurity hidden under the guise of ‘philanthropy.’”
In later chapters, I write about Sea Change Foundation’s off-shore foundation, Klein Ltd., with opaque funding which they then turn around and spread in a grantmaking process for radical environmental groups. The founders of Sea Change still list themselves on its website as owners and operators of this foreign entity in Bermuda, now known as Sea Change Foundation International.
Based in Bermuda, Klein Ltd., and Sea Change Foundation International are not subject to IRS reporting regulations. Contrary to the practice of many domestic charitable organizations, Sea Change Foundation’s U.S. operation does not publish its IRS 990 forms — tax returns for nonprofits — on its website.
Thus, this joint open letter from Ways and Means and Oversight comes as welcome scrutiny into the decades-long practices of radical leftist nonprofits that deliberately obfuscate their funding sources. The extent to which such organizations use foreign funding to interfere in our elections demands urgent attention.
The letter says, in part, “[T]he Committee has learned that a [SuperPAC] recommended donations to 501(c)(3) organizations as ‘the single most effective tactic for ensuring Democratic victories’ and that large donations from a wealthy donor to state election offices in 2020 may have been done in a manner that helps one political party over another.” It goes on to state the committee has found “significant amounts of foreign money is flowing through 501(c)(3) and 501(c)(4) organizations” to influence elections.
The solicitation lists detailed concerns on the “flow of funds into America’s political system and elections under the guise of charitable, religious, or educational purposes or the promotion of social welfare.” The 13-page letter includes extensive details, three appendices, and 95 end notes. For reference, Behind the Curtain had one appendix and 278 end notes.
Smith and Schweickert close their letter with an ominous warning, noting the “expansion of politics into almost all aspects of life,” potentially requiring Congress to close “loopholes” exploited by nonprofit organizations to influence elections, often with funds from foreign sources.
Talk about a shot across the bow.
If any justice still prevails in today’s society, these congressional committees are about to make life very uncomfortable for these groups that circumvent the IRS tax code to funnel foreign money into advancing leftist campaigns.
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