Source: United States House of Representatives – Congresswoman Carol Miller (R-WV)
Washington, D.C. – Today, Congresswoman Carol Miller (R-WV) participated in a Ways and Means Committee hearing on the growing trend of foreign actors exploiting the tax-exempt sector by funneling millions of dollars to U.S. non-profits with the goal of creating, supporting, and fueling disruption and illegal activity across the country. Congresswoman Miller joined her colleagues in calling for more transparency, accountability, and oversight of foreign money flowing through U.S. nonprofits to ensure the American tax-exempt privilege is protected. A video and full transcript of the Congresswoman’s remarks can be found below.
Congresswoman Miller began by highlighting the Federal Election Campaign Act and questioned the witness, Ms. Caitlin Sutherland, Executive Director, Americans for Public Trust, on the practice of ‘donor-scrubbing’ and the disclosures 501 (c)(4)s must make with regards to their donors.
Ms. Sutherland, the Federal Election Campaign Act is clear: foreign nationals cannot donate to American political campaigns.
However, your research shows a massive gap in how this is enforced. Foreign nationals can donate to a 501 (c)(4) “social welfare” organization, which can then turn around and fund a Super PAC or other political entity.
In this scenario, is the tax-exempt organization required to disclose the identity of the foreign donor?
And what are the real-world consequences of this “donor-scrubbing” on the integrity of our federal elections?” asked Congresswoman Miller.
“Thank you for that question. You’ve identified an alarming loophole in which foreign nationals are prohibited from contributing to a Super PAC directly, but they are able to make unlimited donations to the 501 (c)(4) that then turns around and donates to the Super PAC.
And we actually see this play out in real time with the 1630 fund. They are simultaneously funded by Swiss billionaire Hansjorg Wyss and bankrolling Super PACS. This happened in [2018], the cycle, 2020, 2022, 2024, and it’s going to happen again in 2026 if we don’t stop this.
And the problem [that] we’ve identified is that there is no real requirement that a 501 (c)(4) on that Form 990 discloses anywhere that they are receiving foreign funds. This is a huge threat to foreign interference in our elections, and we must close this loophole,” responded Mrs. Sutherland.
Congresswoman Miller concluded by addressing the panel on concerns regarding taxpayer dollars unknowingly funding terrorism, illegal activity, and major disruptions and questioned the panel on what actions Congress should take to ensure the end of this practice.
“Taxpayer dollars should never go towards things like financing terrorism, supporting illegal activity, or causing major disruptions in Americans’ everyday lives.
Reporting that suggests some taxpayers are donating to a charitable organization in good faith, only to later find out that money may have ended up in the hands of designated terrorist organizations, is terrible.
To hear that a tax-exempt organization that helped fund one of these groups is still active in America today is even worse.
To anyone on the panel, what should Congress do to ensure that taxpayer dollars are not being funneled through tax-exempt organizations to support things like terrorism or other illegal activity?” asked Congresswoman Miller.
“Well, I think transparency is key. I think some of my colleagues here mentioned revising the 990, modernizing the 990. I also think that technology lends a hand. I know there’s a lot of talk about this being a partisan hearing. There’s digital footprints that will deny that. This is a puzzle that’s been designed by hostile enemies, hostile countries. And they basically have, the digital footprint is proof. The narratives that they’re funneling through here are very closely coordinated. You could hear where they’re planting those narratives. They come through our nonprofits. So it’s not just the money. You take the digital footprint aside that.
So to give an example of just how nonpolitical this is, coming off a weekend of football, if you found out that a hostile foreign regime was trying to convince Americans not to talk about Tom Brady as the best of all, the greatest of all time, but instead was highlighting another sports star in another sport popular in another country that would immediately feel wrong to all of us. So that’s what’s happening, except take that same lens and apply it to our politics and our civil norms.
So unless we could have a greater transparency, a systematic way of identifying that, I think the modernizing of the 990 is an excellent first step,” responded Mr. Sohn, Co-founder, NCRI and CEO, Narravance.
“I can also add, that’s a great question. I think that we can always strengthen the penalties on the front end for the bad actors to deter the behavior from ever happening.
As you said, it’s horrible that tax dollars and charitable dollars end up financing terrorism. And that’s often through the use of fiscal sponsorships.
If we strengthen the penalties – that can be financial penalties, that can be civil liability penalties, criminal penalties for the bad actors – it will deter them from even funneling that money to the wrong group in the first place,” responded Ms. Sutherland.
“I would tend to agree with what the co-panelists have said. I used to ask my clients, ‘do you look good in dark green or bright orange?’ And they look at me and I say, ‘those are the colors you wear when you go to prison, when you do things wrong.’ So I think strengthening the penalties where a nonprofit is knowingly using money in an improper way, I think needs to be looked at very seriously. And again, I’m not saying all nonprofits are doing that knowingly, but I think there needs to be a revisit of the penalties, both civil and criminal, in those situations,” responded Mr. Bruce Dubkisnky, Founder, Dubinsky Consulting.