House Republicans have launched an inquiry into whether foreign actors are funneling money through nonprofit groups to influence America’s elections.
House Ways and Means Committee Chairman Jason Smith, R-MO., and Oversight Subcommittee Chairman David Schweikert, R-Ariz., released an open letter soliciting input on the matter, suggesting that some nonprofit groups may be violating the law to help political parties and candidates.
“Public reporting has raised questions about whether tax-exempt sectors are operating in a manner consistent with the laws and regulations that govern such organizations and whether foreign funds are flowing through these organizations to influence American politics,” the letter said.
The lawmakers argue that Democrats have leveraged these kinds of groups, though both sides of the aisle could take advantage of loopholes of this kind. They point to one Swiss billionaire, Hansjörg Wyss, who has reportedly poured millions of dollars into the U.S. political system through dark money groups.
“For example, the Committee has learned that a Super Political Action Committee (PAC) 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,” the letter said. “Additionally, the Committee has also found that significant amounts of foreign money is flowing through 501(c)(3) and 501(c)(4) organizations to influence elections.”
The lawmakers requested information on whether the Internal Revenue Service adequately tracks how foreign money could flow through these groups.
“According to a U.S. Government Accountability Office (GAO) report, IRS examiners ‘do not review the national origin of sources of donations reported’ by tax-exempt organizations on the Form 990, “and do not assess an organization’s compliance with FECA provisions during audits,” the letter said. “Given concerns over foreign influence in our elections, should IRS examiners review the national origin of sources of donations reported by a tax-exempt organization on the agency’s IRS Form 990-series?”
