▶ 0:25:27The committee will come to order. Before we get started, I I want to first um recognize our vice chairman of the committee. Um uh Mr. Buchanan um on his well-earned retirement from Congress. Vern Vern brought back a Did you not know that?
▶ 0:25:46I've got some other recommendations, but But I want to say he's been a wonderful vice chair serving serving alongside um this time and we're going to miss him. He uh has been very uh very focused on bipartisan issues. Um he was he was living cool um good health and preventative care before MA ever existed.
▶ 0:26:16Um, this was a huge focus of of Mr. Buchanan who also serves as the the chairman of the health subcommittee. Um, he still has a full year to be with us. He's going to do a lot of great stuff. We're going to deliver, but um, we're definitely going to miss him on on this side side of the aisle.
▶ 0:26:35Um, Mr. Neil,
▶ 0:26:36thanks. Chairman, let I think I speak for everybody on our side. the sense of collegiality that he brought, the fact that there was very little anger in his tone, the way he spoke to issues on the committee and on the floor, they were anything but divisive and at the same time he was quite funny to talk to. He had a not only a great sense of humor, smart, smart guy. Whatever differences we had, I think uh oftentimes were settled because of the tone of the and the nature of the conversation that we would have.
▶ 0:27:05So, a really good guy. Thank you, sir. Um, today's hearing continues our investigation into the money trails behind t taxexempt organizations failing to operate within their stated taxexempted purpose and sewing chaos, fueling anti-semitism and interfering in elections across America.
▶ 0:27:35We have held hearings exposing many of the main players who use their taxexempt status in concerning and problematic ways. We've passed legislation out of this committee with strong support from Republicans and Democrats to hold bad actors accountable.
▶ 0:27:57We referred in fact 11 taxexempt groups to the Biden and Trump IRS, the same ones for investigation and possible possible revocation of their taxexempt What our investigations have found should disturb every single American.
▶ 0:28:21Certain taxexempt organizations funded funded by foreign donors are exploiting their lucrative US tax benefits to incite violence and unrest in our communities and destabilize our political process. All to the benefit of the foreign flags their donors fly.
▶ 0:28:44Several, including Alliance for Global Justice, which I called on the IRS to revoke the taxexempt status of, are suspected of having ties to terrorist groups and using those close connections to funnel resources to support Groups like Sammy Dune, Sammy Dune, a sham charity affiliated with the PLP.
▶ 0:29:15and designated as a terrorist organization by the US Treasury. These are all facts. This is reality. Other taxexempt organizations are masking. They're masking the flow of foreign money by allowing separate entities to utilize their taxexempt status in order to hold riots across the United States featuring intimidation and violence.
▶ 0:29:43Many of these groups like American Muslims for Palestine were contributors to the harassment and violence towards Jewish students that plagued elite universities. Several other taxexempt groups intentionally they intentionally direct millions of dollars in foreign money to sway our elections.
▶ 0:30:08One foreign national, a Swiss gave over $200 million to a 501c3 foundation and related 501c4 to help quote Democrats win the White House and control of Congress. Many of these taxexempt groups also have documented ties to hostile foreign governments like the Chinese Communist Party.
▶ 0:30:38The People's Forum, an American taxexempt group who I demanded documents from in September. It hosts events and courses pushing Communist Party propaganda, incites violent protest and riots, including disruptive occupations of college campuses, and publicly publicly supported Hamas's October 7th terrorist attack against Israel.
▶ 0:31:08And it's no wonder that the People's Forum echoes Communist Party propaganda. One of their largest donors is a wealthy former US tech executive living in Shanghai who is cozy, extremely cozy with the Chinese Communist Party.
▶ 0:31:30Neville Roy Singum and his wife, a co-founder of Code Pink, donated over $20 million to the People's Forum through Shell companies and donor advised funds to hide the original source of the money. This committee has worked tirelessly to to unravel um the Singum CCP network.
▶ 0:32:00Just last night, I sent letters to Triccontinental and Breakthrough News, two organizations that are part of this regime of CCP linked nonprofits operating in the US. Each one of these groups has the same thing in common. Foreign actors fueling disruption and illegal activity in America using a dark web of taxexempt groups.
▶ 0:32:28And all this disruption, the chaos and hate is subsidized by the American taxpayer. Nothing about today's hearing should be partisan. Republicans and Democrats should work together to stop foreign actors from interfering with our politics and public discourse through The people who want America weak, they want America divided and
▶ 0:32:58torn apart would love nothing more than a partisan battle on this subject. This is not politics. It's about national security. The manipulation and abuse of taxexempt status by foreign nationals is absolutely unacceptable. Tax exempt status is a privilege, not a right.
▶ 0:33:26To the taxexempt groups who set out on a mission to provide benefits to communities, we are encouraged by the good work that you are doing. To the taxexempt groups hiding in darkness and stirring up unrest in this country, know that this committee is coming for you.
▶ 0:33:47We will not hesitate to use every tool in our toolbox to root out the foreign influence lurking in America's taxexempt sector. I want to thank our expert witnesses for coming to testify today about how foreign individuals, organizations, and even nations are taking advantage of our tax tax exempt sector to destabilize the United States through our own tax code.
▶ 0:34:16I'm pleased to rec recognize the ranking member, Mr. Nil, for his opening statement.
▶ 0:34:20Thank you, chairman. We're here today as a government built for the people. Today, this hearing is being held on the pretense of what happens when tax exempt dollars are funneled from group to group only that you disagree with.
▶ 0:34:37But much more pressing should be the decisions that are no longer being made for the American people, but in service to the president's demands that expands across affiliated nonprofits and for-profits alike into wide-ranging transactions with foreign governments, including real estate, crypto, and numerous business ventures. Right now, it's impossible to talk about nonprofits in America without acknowledging those that are tied to the president.
▶ 0:35:06the Presidential Library Foundation, the Inaugural Committee, the Trust for the National Ballroom to name but a few. And while we're on this topic, everybody on this committee and every member of Congress that I'm aware of, they are opposed to anti-semitism anywhere that it attempts to grow. Let's talk about a few of these high dollar examples.
▶ 0:35:28$400 million a private jet given to the president personally, a taxexempt organization from Qatar offering the jet. This donation apparently is been linked to several deals from the administration including $142 billion arms deal and a deal for AI chips despite national security concerns. $5 million donation to the Trump inaugural committee.
▶ 0:35:55This pattern of foreign influence continues to the hundreds of millions of dollars that are being funneled to the trust for the National Mall, a taxexempt organization collecting contributions for the Trump Ballroom. Among the donations that have been publicly disclosed, there are two notable ones from the Tether America, a US subsidiary of an El Salvador-based company, and Sententa, a subsidiary of another owned foreign company.
▶ 0:36:20Certainly, the administration has put up a forale sign, and many countries apparently are responding. As my colleagues on the other side of the aisle stated, Americans deserve assurance that presidents won't be bought and sold before leaving office, particularly as they still hold immense international power and influence over American policy. We could not agree more with that statement. All of this is just the tip of the iceberg of this profiteering.
▶ 0:36:48According to estimates from the New York Times, which they acknowledge is only based on what is publicly available and likely an underestimate, president has used the office for his family and himself to enrich him by 1.4 billion. That is times the average income of the American people. How's that in terms of serving the people? Real national security threats are going unexamined on Republican watch right now.
▶ 0:37:16The administration admits to mishandling the people's sensitive data as it relates to social security. I want to add last year one of our Republican witnesses went on Fox News and couldn't be more impassionate about the national security risk from foreign governments regarding donations to American universities. That is something we all need to pay attention to. We agree that there's an important interest in identifying a foreign actor with shady motivations.
▶ 0:37:42We look forward to hearing the perspective today on a $400 million private jet from a country that was given to the president. We need a serious and good faith conversation about this influence as it's pedled. It's bending politics to the benefit of the well-connected and certainly costly to the American What is happening this morning is disingenuous.
▶ 0:38:05It's a cherrypicked exercise to legitimize the White House's crusade to silence the opposition always by branding anyone who disagrees with them as a threat or even a domestic terrorist. We've already seen how this has been weaponized for the power of government to target opponents and enemies as professed. We can't be party to another performative effort that continues to ignore the president's abuses. And with that, I yield back my
▶ 0:38:33Thank you, ranking member. I will now introduce our witnesses. Um, our first w our first witness is Mr. Scott Walter. He's president of Capitol Research Center. We have Miss Caitlyn Sutherland is executive director of Americans for Public Trust. We have Mr. Adam S is co-founder of the network contingent research institute. And we have Mr. Bruce Dubinski is founder of Dubinsky Consulting.
▶ 0:39:03And Mr. Robert Weisman is co-president of public citizen. I want to thank you all for joining us today. Your written statements will be made part of the hearing record, and you each will have five minutes to deliver remarks. We'll start with you, Miss Sutherland. You are now recognized.
▶ 0:39:21Chairman Smith, Ranking Member Neil, and members of the committee. Thank you for the invitation to testify on foreign threats and influence in the nonprofit sector. My name is Caitlyn Sutherland and I am the founding executive director of Americans for Public Trust, a nonprofit, nonpartisan organization that works to uncover and publicize foreign money and influence in politics and Foreign nationals, foreign charities, and foreign governments are actively exploiting loopholes to funnel their foreign dark money into important American
▶ 0:39:51policy fights, institutions, and electoral tools. And they're utilizing the nonprofit sector to do it. Over 40 years ago, Congress banned foreign nationals from directly or indirectly influencing our elections. And while federal law is still inadequate when defining what foreign nationals can and cannot do in the electoral space, it is even worse to non-existent in the nonprofit policy space.
▶ 0:40:17The unprecedented rise of foreign donations to nonprofits should be a concern to every American. Tax exempt organizations, most commonly 501c3s and are important institutions in our modern society. They are supposed to serve as charitable backbones in the community, educate the public, and promote the common good. And yet, they've been co-opted by foreign actors who are quietly driving radical changes right here in America.
▶ 0:40:46This threat of or foreign interference is not a hypothetical one. In October 2025, Americans for Public Trust released a report on how just five foreign charities spent almost two billion baking bankrolling US policy fights, litigation, research, lobbying, and protests.
▶ 0:41:03The foreign money identified in this report originated from foreign charities and foreign nationals in Switzerland, the United Kingdom, and Denmark, and then flowed into the United States, mostly through One of those charities, KR Foundation, wants to quote popularize a shared vision of how cities could be much better places to live without private cars end quote.
▶ 0:41:26And they financed numerous climate protests and The Switzerland-based Oak Foundation poured 650,000 into the 501c3 Environmental Law Institute that houses the Climate Judiciary Project, which has faced accusations of training judges to rule favorably on climate litigation.
▶ 0:41:45And the UK-based Quadaturure Climate Foundation sent almost 50 million to the 501c3 Windward Fund in part to quote to support quote environmental justice advocates in the US end quote and for calling for diet shifts away from red meat to plant-based proteins. Abolishing private cars, eating less meat, training judges, protests, suing energy companies. These are just a few examples of what is being financed by foreign money and it must stop.
▶ 0:42:15Notably, after Americans Republic Trust exposed how British activist hedge fund manager Christopher Hone funneled over half a billion into US-based organizations, he announced he would no longer be financing US causes in the future. But the damage with his foreign money has already been done as he's been bankrolling advocacy campaigns and pushing a radical green agenda for over a decade. all while he and his charity maintain close and questionable ties to communist China, work with CCP officials, and support the CCP's Belt and Road Initiative.
▶ 0:42:46While it is a fantastic victory that Hone was called out and shamed into changing course, it is simply not enough given the influx of foreign money coming into the United States. We must have more guard rails in place to protect our democracy. Another everpresent threat to American politics is Swiss billionaire Hanzorg Vis. Mr.
▶ 0:43:04who once said he quote never felt the need to become an American end quote has instead as stated in his biography found a way to quote exert an influence on American domestic politics through his foundations end quote. The precise reason this Swiss billionaire or any other foreign billionaire can do this is because foreign money running through foundations and nonprofits to influence policy and advocacy is not prohibited. This has allowed Mr.
▶ 0:43:34V to keep the lights on at numerous left-wing nonprofits around town, including giving 280 million to 1630 fund, 30 million to the League of Conservation Voters Network, 9 million to the ACLU network, and 7 million to Indivisible, the chief organization leading nationwide how these taxexempt organizations can simultaneously raise and spend hundreds of millions of dollars from foreign actors, be it from Switzerland or China, all while seeking
▶ 0:44:04to influence policies in our backyard is a problem worth solving. I look forward to discussing ways to prevent foreign influence in the nonprofit sector. Thank you.
▶ 0:44:14Thank you, Mr. S. You are now Chairman, ranking member, and members of the committee, thank you for the opportunity to speak. America's nonprofit system rests on citizens who want to make this country healthier, safer, and stronger without being taxed to do so. It's trust between Americans that builds hospitals, educates children, cares for the vulnerable, supports churches, and strengthens communities.
▶ 0:44:41Nonprofits were never intended to organize street violence, clash with police, shut down infrastructure, block hospitals and airports, or serve as proxies for foreign governments. I'm Adam Zone, co-founder of the Network Contagion Research Institute. And today, I'm going to explain to you how the trust between Americans are being broken by foreign enemies by using data science to identify and mitigate these information threats. I'm going to show you two case studies.
▶ 0:45:08one care and the second Neville Royce Singer and you'll see how foreign influence has penetrated America's nonprofits exploiting taxexempt status not to strengthen our communities but to weaponize them against the United States itself. The Council on American Islamic Relations presents itself as a civil rights group defending Muslim Americans. Care affiliates acknowledged receiving millions from Saudi Arabia, the UAE, Qatar, and Kuwait, countries with clear stakes in US politics without registering under foreign agent laws.
▶ 0:45:38Since 2022, American taxpayers have largely replaced CAR's former donors. In California, CAR's largest chapter received nearly $30 million in public grants, including 7.2 million in federal funds meant to help Afghan refugees who supported the US mission abroad. Care California promised to serve 1,800 Afghan refugees, but served just 177, less than 10%. Yet, Care California still spent most of the money.
▶ 0:46:07More than seed back into CAR's own offices. And for what reason, they don't say. California's Cal Care California's director, Husam Alouch, submitted a signed statement to Congress just last month, denying that Care managed the Afghan grant or control the distribution of the money. But that statement appears to be false. Grant documents explicitly named Care California as the administrator. Care California controlled the funds. That appears to be a material misrepresentation to Congress.
▶ 0:46:37So why lie? Because transparency would show the tax dollars were funneled to groups like the Muslim Brotherhood affiliate, the Muslim American Society, MOS, an organization whose events feature Hamas leaders appearing not on most wanted posters, but on t-shirts and buttons for sale in hotel lobbies. Care also used taxdeductible donations to shield college students suspended for vandalism, harassment, and violence during street and campus protests, receiving $1,000 grants and interest-ree loans from care.
▶ 0:47:05So instead of facing consequences, students got paid. This is what nonprofit capture looks like when it matures. Foreign money builds the network, taxpayers unknowingly keep it alive, and civil society bears the cost. Nevilleroy Singum represents a different threat. Born in Connecticut and became a near billionaire in the United States, Singham relocated to China and now operates as a CCP aligned influence agent, coordinating US nonprofits to destabilize American society from within.
▶ 0:47:33Singum attended Chinese Communist Party propaganda trainings, shared offices with Chinese state media in Shanghai, and exploited US tax law to move tens of millions of dollars through donor advised funds primarily via Goldman Sachs. And together, these entities form a coordinated $100 million system. The Singum Network, the Yanser Coalition and the Party for Socialism and Liberation mobilize the protesters. The People's Forum trains and coordinates the activists. Breakthrough News handles messaging and media amplification.
▶ 0:48:02The impact of this money is ongoing. Federal property vandalized at Union Station. American flags burned and police officers assaulted. Airports blocked at JFK and LAX. Brooklyn and Manhattan bridges shut down. Ambulances and commuters disrupted. Wall Street blockaded. Holiday Commerce halted at Macy's Herald Square. and immigration and law enforcement facilities targeted. This is not grassroots protest.
▶ 0:48:24It is a repeatable system for paralyzing American infrastructure on demand, financed through US tax law and aligned with a hostile foreign power. It is an active vulnerability we cannot afford to leave intact. We face a significant national security vulnerability. These cases are not anomalies. They are expressions of the same structural failure. This is not protected speech.
▶ 0:48:47It is engineered subversion shielded by 501c3 status obscured by donor advised funds and embedded in state funded institutions. This committee has jurisdiction over the tax protections that make this possible and therefore the responsibility to act revoke tax exempt status clarify what activities do and don't qualify as taxexempt. Enforce foreign agent registration laws and shut down the financial pipelines. Thank you and I look forward to your questions.
▶ 0:49:15Thank you Mr. Mr. Dubinski, you are now
▶ 0:49:21Please turn on your mic.
▶ 0:49:24Good morning, Chairman Smith, Ranking Member Neil, and members of the committee. Thank you for the invitation to testify before the committee at this important hearing. My name is Bruce Dubinsky. I appear before you as a forensic accountant with decades of experience investigating fraud and financial misconduct across a wide range of organizations, including taxexempt organizations operating under various sections of the Internal Revenue Code. To appreciate the magnitude of the issue before the committee, it's important to understand the scale of charitable giving in the United States.
▶ 0:49:53According to the Giving USA Foundation, total US charitable giving in 2024 exceeded $592 The fact is that it's extremely difficult to determine how much of that money originates from foreign donors. For most charitable organizations, donors identities reported on their form 9 uh form 990 schedule B are not publicly disclosed. As a result, we simply do not know how much foreign money is flowing through the US nonprofits or for what purposes.
▶ 0:50:22This lack of visibility creates real national security risks when foreign donors, including foreign governments, state- linked entities, sanctioned actors, or cutouts, use charitable structures to move money, gain influence, or mask illicit activity. While foreign donations must comply with US sanctions, anti-terrorism, and anti-moneylaundering laws, this is an area with limited transparency and limited scrutiny. That combination makes the system vulnerable to abuse.
▶ 0:50:48For example, foreign state link donors may seek to shape US public discourse or policy by funding nonprofits engaged in advocacy, research, community organizing, or media adjacent work. Even when activity is not criminal, opaque funding can create significant influence while obscuring who is behind particular agendas. Money moving through nonprofits is like shipping containers moving through a port. You can count what comes in and what goes out, but without without targeted inspection, illicit activity can be hidden inside legitimate flows.
▶ 0:51:18If you cannot identify the original source of funds or clearly see how those funds are used, the system can be exploited in harmful and unlawful ways. A central driver of this problem is the current reporting framework. Most taxexempt charities satisfy their federal obligations by filing an annual form 990. While form 990 provides highle aggregated information, it is not designed as a forensic tool capable of detecting financial malfeasants. Bad actors understand this.
▶ 0:51:44They identify weaknesses and structure misconduct to blend into otherwise lawful operations. In my experience, flawed flourishes where reporting lacks granularity and enforcement resources are limited. This vulnerability is particularly evident in fiscal sponsorships. As you'll see on the screen, a fiscal sponsorship allows a public charity to extend its taxexempt status to a separate project run by some other entity that is often not itself taxexempt.
▶ 0:52:09When a public charity fiscally sponsors a project, the sponsor is legally responsible for controlling and overseeing how funds are used and how activities are conducted. If it cannot explain where the money went or what the project actually did, the sponsor faces serious exposure, including loss of exemption, excise taxes, civil penalties, and in extreme cases, criminal liability, and personal exposure for officers and directors. Yet, current law imposes no requirement for separate project level reporting of fiscally sponsored activities on form 990.
▶ 0:52:37There's no dedicated line or schedule for fiscal sponsorships. So, these activities are absorbed into aggregated reporting, producing little meaningful transparency. Transparency is further reduced by the growing use of donor advised funds which separate the identity of the original donor from the recipient organization. In many cases, grants from donor advised funds to operating charities are made anonymously, further obscuring the flow of money. In my professional judgment, these vulnerabilities warrant legislative attention.
▶ 0:53:05One practical and cost-effective remedy would be to revise form 990 to include standardized questions focused on fiscal sponsorships, donor advised funds, foreign operations, and pass through funding structures. These disclosures would generate structured data that the IRS could analyze using modern tools, including artificial intelligence.
▶ 0:53:26Artificial intelligence can help the help the IRS identify risk patterns that would otherwise go undetected and allow the agency to focus its limited enforcement resources where they are most needed. Properly deployed, AI would function as a screening tool much like fraud detection systems used by financial institutions, flagging unusual patterns for human review while leaving compliant charities untouched.
▶ 0:53:49Combined with improved disclosure, this approach would allow the IRS to proactively identify risk, allocate resources more efficiently, and strengthen oversight without impeding legitimate charitable work. Thank you, Chairman Smith, Ranking Member Neil, and members of the committee. I look forward to your
▶ 0:54:05Thank you, Mr. Walter. You may begin when you are ready.
▶ 0:54:11Chairman Smith, Ranking Member Neil, distinguished members of the committee, thank you for the honor of testifying. I'm president of the Capital Research Center where we've long studied the nonprofit world and its political connections. It's refreshing to have a hearing where all witnesses share strong agreement on a central point, namely foreign money should be kept out of American politics. Mr. Weissman urges passage of the disclose act in part because it drastically limits foreign political spending.
▶ 0:54:38Miss Sutherland uh deplores political spending by Swiss foreign national billionaire Hansorg vis. Mr. Done objects to pass funding from Middle Eastern countries to the Council on American Islamic Relations and I criticize domestic environmentalist groups ties to the Chinese Communist government. A lot of these problems involve America's nonprofit sector which is traditionally a glory and a strength of this exceptional country.
▶ 0:55:03But foreigners abuse this sector, especially tools like fiscal sponsorship and donor advised funds which aren't inherently bad things in order to hide their influence ops. Americans homegrown groups also exploit those tools. Recall the politicized multi-billion dollar nonprofit network operated by Arabella advisers, one of whose presidents admitted their business model, which heavily uses fiscal sponsorships, is quote a workaround to the tax regime.
▶ 0:55:30This same Arabella network's first major funer whom we can discern was Hans Jurg, the Swiss foreign national and democratic mega donor. Miss Sutherland uh discusses a big part of the problem is so-called campaign finance reform. It greatly narrows money flows into hard dollar entities like political candidates and parties, but it places no restraints on 501c3 private foundations and public charities.
▶ 0:55:56This preference for the charitable sector is explained by the fact that eight billionaires all with the same last name foundation gave almost all the money to pass the last campa camp campaign finance law. McCain fineold.
▶ 0:56:10That law hurts both political parties and drives anyone seeking to influence our politics to send money not to parties and candidates where it would be disclosed but into nonprofits where the money is hidden sometimes under multiple layers and also where the money is unlimited both in dollar amounts and also in its source. Foreign governments and foreign nationals like Hans fees can give unlimited amounts.
▶ 0:56:33As one left-wing activist admits, the law that forbids using C3 charities for electoral electoral work is a joke. Quote, "Filanthropy can help win elections, pass legislation, enact policy, decide court cases, shape press coverage, catalyze protests, smear your enemies, boost your allies, and even help set the overall cultural direction of American New York Times reporter Teddy Schlifer agrees, confessing 501c3 charities, quote, are often surprisingly
▶ 0:57:04as much a part of big money politics as your neighborhood super PAC. Some left-wing practitioners celebrate the collapse of the traditional separation between charity and politics, including Eric Kesler, who founded the Arabella network of left-wing nonprofits. In a case study of the business he paid for, we read that when Arabella was founded in 2005, most donors still equated philanthropy with giving to charity for community purposes. But he and his business partner quote saw things differently.
▶ 0:57:34They were obsessed with bold changemaking strategies, advocacy, and innovative methods like fiscal sponsorship that would quote soon help billions in new philanthropic resources from left-wing billionaires, foreign and domestic, flow into the nonprofit field with unprecedented velocity. It's undesirable when Americans produce this pseudo philanthropy and manipulate our politics through it.
▶ 0:57:59It's far worse when foreign donors are involved because nearly all Americans reject foreign money entering our politics through any channel, much less through alleged That's why states keep passing laws to block federal funds, foreign funds. Only this past week, Alabama and Michigan saw houses of their state legislatures pass bills to prohibit foreign nationals from contributing to ballot measure committees.
▶ 0:58:26On the federal level, this committee should consider whether 501c3 charities should continue to be allowed to engage in ballot initiative campaigns given that charities have no limit on their spending and may receive unlimited foreign funding. The committee should also consider whether charities should be allowed to engage in voter registration given the documented abuses by charities who flout laws and regulations that only permit this when it's done in a nonpartisan manner.
▶ 0:58:54Charities that hire Democratic microtargeting firms to help register voters are laughing at your tax code. Thank God Americans give generously to nonprofits. They give because they want nonprofits to help people. They don't want anyone, especially foreigners, to use politicized nonprofits to manipulate people. Thank you for taking this grave problem seriously.
▶ 0:59:17Thank you, Mr. Weisman.
▶ 0:59:21Thank you, Mr. Chairman, Mr. Neil. Members of the committee, the committee is absolutely right to be training its sights on improper foreign influence in American politics and policymaking. However, there's no need to be searching for dark conspiracies of foreign influence. The overwhelming problem of improper influence in American politics today stems from two things.
▶ 0:59:47First, the fundamental failure of the Trump administration to enforce the existing tools we have to deal with foreign influence and to actively undermine them. And secondly, the president's business and donor relationships that compromise him in a way that probably has no parallel in American history. Let me discuss these two points. First, as regards the failure of the Trump administration to maintain the existing rules or institutions to deal with foreign influence.
▶ 1:00:16First, Attorney General Pam Bondi announced as one of her first moves that she would not enforce the Foreign Agents Registration Act. Perhaps that's because she herself had registered as a foreign agent for cutter. Perhaps that's because the FBI director had failed to represent to register as a foreign agent despite working forQatar. I don't know.
▶ 1:00:37Second, that problem has been made worse by the decision subsequently in the fall through the national security presidential man memorandum 7 to weaponize FAR against political enemies, not to use it in a balanced way. Third, we have a problem indeed of foreign money going into American politics. We have record levels of dark money spent on American politics in the last election cycle, $1.9 billion.
▶ 1:01:06How much of that is foreign, we do not and cannot know. But we could solve that problem by passage of the disclose act, which would require not just disclosure of all donors, but active prohibitions on the means of foreign money coming into our elections. Fourth, the administration has actively undermined the agencies and programs designed to combat foreign influence.
▶ 1:01:30It has attacked the inspector general system with the president firing twothirds of the in presidentially appointed inspector's general as of October. The agencies intended to deal with things like fraud and improper foreign influence. It has slashed staffing at the IRS by a quarter, including a quarter cut in the nonprofit taxexempt division.
▶ 1:01:53It has virtually closed the Justice Department's public integrity section that deals with, among other things, efforts by foreign governments to improperly influence public officials. It has shuttered the anti-dis disinformation offices at the departments of homeland security and But all that pales in comparison to the problem of foreign influence that comes explicitly, overtly in all of our faces from the president's business and donor entanglements.
▶ 1:02:22These include a recently disclosed Wall Street Journal reported uh business partnership with UAE through the president's affiliated world liberty financial which effectively pocketed $187 billion directly in the president and the president's family's pocket. It involves the Trump memecoin, which of which the largest purchaser is Justin's son, a person facing SEC enforcement now paused.
▶ 1:02:48It involves the donation of the $400 million valued plane from the government of Qatar for no possible purpose except to influence the president. It involves two Trump branded luxury product projects in Saudi Arabia, probably throwing tens of millions of dollars to the Trump family in exchange for just a brand deal.
▶ 1:03:07It involves Saudi government spending billions of dollars and the son and president's son-in-law Jared Kushner's investment fund despite the government of Saudi Arabia saying it doesn't believe he's got any investment acumen. It involves also now the new efforts to fund raise for the ballroom and freedom 250 through using taxexempt structures and accepting money from corporations and possibly foreign corporations with business before the Addressing the challenge of improper
▶ 1:03:38influence in the United States requires a fundamental U-turn from what this administration is doing as well as work from this Congress. We can and we should have effective instruments to address undue improper foreign influence. They have to be administered robustly but also fairly and without without regard to point of view.
▶ 1:04:03Right now, however, the Trump administration is actively degrading those institutions, rules, and policies while simultaneously threatening to use them against its political adversaries. Our democracy needs a complete reversal. Thank you.
▶ 1:04:21I want to thank all the witnesses for being here um today uh once again and we will now lead onto the question and answer session. There are there are serious concerns over the link between radical 501c3 organizations that actively that actively cause violence and unrest across the country and the Chinese Communist Party.
▶ 1:04:47Most notably being the over $20 million $20 million that the People's Forum received from Mr. Neville Roy Singum. The CCP is taking advantage of our taxexempt sector to poison our dialogue and cause division in our political system.
▶ 1:05:14That should alarm every single person whether you're a Republican or whether you're a Democrat. If you are an American, you should be extremely extremely concerned with what's going on at the expense of our taxexempt status. Mr.
▶ 1:05:33Walter, the CCP's involvement in our taxexempt sector is one of many ways, one of many ways that China has sought to harm America's national interest. Can you please walk through Mr. Singum's web, the big web of nonprofits, and explain how the CCP is using our tax exempt sector to push CCP
▶ 1:06:04Thank you for the question, Mr. Chairman. Uh, I I have to say that some of this is speculative because uh so little is known for certain and uh like a good Mauist, Mr. Singum works hard to hide what he's doing and our nonprofit sector makes that easy. Uh but there's been some very good reporting especially from the New York Times on this which uses the number hundreds of millions of dollars Mr. Singum has spent to try to influence politics in America and other countries as well uh through a vast number of groups.
▶ 1:06:34Um all those groups do different things but one thing they do is exactly what you say. They all push communist China propaganda. Uh as the New York Times is perfectly clear none of them are registered under FAR as the Times also points out. Um they do all kinds of things like the people's forum as you said it both trains and organizes for protests on multiple issues all over America. Uh other groups operate YouTube channels to reach youth. Others operate fake news websites.
▶ 1:07:04Still more uh lobby con uh congress uh operate the trcontinental institute a Marxist think tank support candidates for office in multiple countries. Uh and in all cases, by the way, they don't just boost the communist government of China. They also support other hostile regimes. For instance, the no dut group uh connected to Singum propagandizes for the gruesome dictatorship of North Korea.
▶ 1:07:32Uh Singum's wife, Jodie Evans, helps operate Code Pink. Uh and of course their protests famously include disrupting hearings in Congress which shows their contempt for America and their contempt for the rule of law. Uh so uh I think this is clearly something that needs additional investigation from multiple parts of the executive branch and I applaud your investigating it here.
▶ 1:07:56This committee on a bipartisan basis approved multiple multiple bills to address the attempt by multiple foreigners to influence our politics and election outcomes by funneling money through taxexempt organizations. But when those same bills came to the House floor, our Democrat colleagues ended up opposing opposing them.
▶ 1:08:23They sided with special interest in foreign billionaires and abandoned this bipartisan bipartisan cause. Similarly, today's minority witness shows that the Democrats would rather focus their time on opposing Donald Trump than working with us on this important issue. It seems opposing the president is the only thing that unites my colleagues on the other side of the aisle.
▶ 1:08:54Maybe my colleagues across the aisle want to talk about President Trump because they don't want to talk about the individuals funding these groups. We know of two two notable examples, a Swiss billionaire and a British billionaire who have attempted to funnel hundreds of millions of dollars into taxexempt organizations operating
▶ 1:09:24right here in the US for the purpose the purpose of influencing our elections which is illegal. absolutely illegal. Miss Sutherland, how common is this type of foreign influence and foreign funding in our politics and what sort of action should we or the IRS be looking at to combat it?
▶ 1:09:49Uh, Chairman Smith, uh, thank you very much for that question. It's unfortunately all too common that foreign billionaires and foreign charities seem to have their thumb on the scale of American politics. Yes, we know that Hansorg has funneled hundreds of millions of dollars, as has Christopher Hone, and a smattering of foreign charities. Together, that identifies $2.7 billion dollar of foreign money running through the nonprofit sector. Uh that is a shocking amount to both the right and the left.
▶ 1:10:19And you notice that while these maybe these uh bills passed on a bipartisan basis but failed on the floor, uh perhaps it is because uh the top 501c4 on the left, the 1630 fund has received $280 million from Hansorg. Whereas the top 501c4s on the right, One Nation and American Action Network have an internal prohibition on accepting money from foreign nationals.
▶ 1:10:46This is something that we must address and I applaud your committee for taking action. The IRS and this committee must find a way that foreign nationals are prohibited once and for all from funding policy campaigns and issue advocacy campaigns right here in America.
▶ 1:11:04Every Republican member of this committee recently called on the IRS to crack down on certain taxexempt organizations because our investigations have exposed a pattern of abuse, deception, and blatant disregard for the law.
▶ 1:11:22In fact, to date, we have found cause to refer 11 11 different organizations to the IRS for potential revocation of their tax exempt status. Mr. Dubinsky.
▶ 1:11:37As a forensic accountant who investigates complex financial what sort of practices could IRS criminal investigation adopt to better track the flow of foreign money through the complex web of entities involved and safeguard taxpayer
▶ 1:12:01Thank Thank you for that question, Mr. you know, when you look at the the situation, by the time it gets to IRSCI, criminal investigation, uh there's allegations of serious misconduct. I think we need to take a look and the committee needs to look at what can the IRS do on a proactive basis upfront by getting more information from the reporting from the 990 from the nonprofits that the IRS can use that information and use artificial intelligence.
▶ 1:12:26I mentioned that in my in my opening statement more effectively and efficiently to ferret it out some of this behavior before it even gets to to the CI level. Once it advances to a revenue agent who's doing the the normal audit, uh they need the tools at that level to be able to look at the the complex web of transactions to be able to follow the money to be able to see the the transparency or unravel the the transparency to to see what's going on. At that point when CI comes in, a referral is made to criminal investigation.
▶ 1:12:55They need the tools to do their job. They need better artificial intelligence programs. They need better computers. I've worked alongside with CIA agents that that have old technology. They need better training technology. It's not that they need more manpower, but they need better tools to operate more efficiently and effectively. So, I think it's a combination of starting in the in the front end with better reporting on the the form 990 that the nonprofits will have to disclose things like donor advised funds. If there's a fiscal sponsorship, they have to check the box to that.
▶ 1:13:24At least some basic information that would flag things for the IRS that they could look across the the the the entire spectrum of tax exempt entities and have a flavor of better what's going
▶ 1:13:35Thank you. I now recognize the ranking member, Mr. Nil.
▶ 1:13:38Thank you, Mr. Chairman. Uh, in my opening statement, I made the point that the problem you've all identified with some consistency still can't be based on who we like or dislike. And the testimony certainly highlighted the point that I tried to make.
▶ 1:13:54Also, in in reference to the statement that was just made about the IRS, the IRS has just lost 27,000 I'm wondering if there's anybody left working down there to undertake these sophisticated audits that have to take about foreign intervention.
▶ 1:14:12And I also think that it was not stated, but I think that in briefings I've had over the years, there's been uh particularly from former speaker Pelosi, she raised the question many times about contributions to universities and how that plays out. I hope part of the focus as we go forward would be part of that. So, I want to ask a quick question and and maybe a yes or no answer would be appropriate. We'll start on the right to the left and if you could just give me a yes or no before I come back to a couple of questions that I have.
▶ 1:14:39Um, is the $400 million jet On its face, uh, I don't have enough information, but I would certainly um, it it's suspect in my opinion. U I I feel that uh the topic of the committee I thought was on nonprofit so I don't think I have the uh sufficient information to answer that question.
▶ 1:15:05Uh thank you for that question. Uh very similar answer uh I was brought as a witness to examine uh loopholes in our campaign finance system of which the cutter jet was not. So I'm unable to appine on the subject.
▶ 1:15:18Yeah. And I too am not properly qualified as an expert in uh that sort of law. Uh so thanks for reinforcing the point that I made in my opening statement. Uh Mr. Weissman, as you know, the presidential library, taxexempt charity, has received and accepts gifts from foreign governments, including a $400 million luxury plane from Qatar. It's been reported that Qatar received 142 billion in an arms deal.
▶ 1:15:45So do you have any explanation as to why a $400 million jet would be given to the president? I think the explanation is the obvious one. They were seeking to win influence with the president and I think they succeeded at doing so.
▶ 1:15:59Thank you. And let me follow up. Mr. Weissman, yesterday the Washington Post reported that a federal judge is reviewing the legality of private donors funding the ballroom. I don't even have to say which ballroom. We all know which ballroom I'm referencing. Without objection, I'd like to enter the Washington Post article into the record. Mr. Chairman,
▶ 1:16:16without objection.
▶ 1:16:17Thank you, Mr. Weissman. What is known about the ballroom's funding in the Freedom 250 projects?
▶ 1:16:23Well, we have some idea of who's funding the ballroom, not complete and maybe there are others that we do not know. Um, we were able to analyze the 24 known corporate donors at the early stages of the ballroom. 16 of them had government contracts going back over the last 5 years totaling 270 billion dollars in federal contracts. My view is they were funding the ballroom not out of a sense of civic pride but out of a sense of they can get something back in return.
▶ 1:16:50A couple of those companies as you mentioned in your statement are domestic subsidiaries of foreign businesses. I think as we look now to the Freedom 250 project which seems to be a comparable fundraising effort, we're going to see the same kind of problem. Lots of money from businesses with business before the United States government including potentially subsidiaries of foreign businesses.
▶ 1:17:11And by the way, because these are going to be through C3 operations, we are not going to know who all the funders are unless there's an affirmative decision by the nonprofits linked to the president to disclose
▶ 1:17:25Mr. Smith,
▶ 1:17:26thank you, Mr. Chairman. Thank you to our witnesses as well for sharing your insight and and expertise here. I I think this is a timely hearing. Uh we're we're hearing I think relevant topics that I find chilling and that um I think most Americans do as well. We heard it earlier that tax exempt status is a privilege and and not a right.
▶ 1:17:51I also know that what separates our country from so many others is the philanthropic efforts of many um and an investment in our economy that can get that can deliver very positive results and create more opportunity for for a lot of others. I uh it's interesting when uh we see a debate taking place in California now that uh you know this so-called billionaire tax.
▶ 1:18:19Now, some politicians would say being a billionaire should be illegal. Uh, that disappoints me. Uh, that, uh, I guess stands to reason that that would come, uh, seemingly come from folks who, um, just see America differently the demonization of prosperity.
▶ 1:18:38in fact that you would never realize given the demonization of prosperity out of Washington DC, you'd never realize that our tax code depends very heavily on on uh financial success and and that uh revenue that is is important. And so now we have scenarios where folks have benefited off of the US economy and now they want to undermine it. We have to ask ourselves a question. Why? Why?
▶ 1:19:08And how could that be? This debate taking place in California though, what on the billionaire tax? It's interesting that the governor now opposes that. I I assume it's because he's concerned about folks more folks moving out of the state of California, as has been the case.
▶ 1:19:31hearing the the various names and entities, I know they've impacted elections in Nebraska and our attorney general, Mike Elders, is is uh looking into this and I appreciate his steadfast review of that.
▶ 1:19:45Uh but all the while I when we have these debates I can't help but think of the good things that charitable activities can achieve and and yet I fear that the the bad stuff that's happening shall I say the abuses as well uh that that are happening I think could should concern all of us but Mr. Dinsky.
▶ 1:20:10Uh the the uh term fiscal sponsorship is essentially an arrangement where a taxexempt organization lends its status to a non-exempt party allowing that party to receive taxdeductible contributions for its projects. Fairly simple approach here. While often used for legitimate incubation, it creates a structure where a private entity can effectively piggyback off the public's trust in 501c3 organizations. Is is that
▶ 1:20:37Absolutely. It's it's basically lending the taxexempt status of one organization to another. There's supposed to be oversight from the the sponsor to the uh non-sponsored organization or to the sponsored organization. But many times you'll see that there's not proper oversight and that's where it becomes a slippery slope. So on its face a fiscal sponsorship there's no problem with it. But again if it's if it's misused for nefarious uh reasons that's when you end up on that slippery slope and you can and and there can be problems with it.
▶ 1:21:05So I think identifying as I said earlier in my in the answer to a question in my opening remarks identifying on the form 990 if a taxexempt organization is involved with fiscal sponsorships just a simple checkbox another question on the form 990 can can arm the IRS with additional information if they start to see and maybe it goes further than that maybe there are some more sub questions if you do have a fiscal sponsorship and there's a series of questions underneath that uh would arm the IRS with the information they need to then properly see if
▶ 1:21:35they if it's legitimate, if they need to investigate further. You know, this is all about following the money. I come back to this all the time as a forensic accountant. You have to follow the money and see who's paying it, why it's being paid, what what's the substance of the transaction, not so much the form, what's the true underlying substance of that
▶ 1:21:52Right. And I think you you touched on ultimately what my concerns are. you know, why would an established charity take on the massive legal and even financial liability of sponsoring a non-exempt project? I I think Well, go
▶ 1:22:07Yeah, look, there could be legitimate reasons for doing so. If the nonprofit doesn't have the the manpower or the specific expertise in furtherance of the charitable cause, another organization may have that and it's proper to have a fiscal sponsorship. Um, there's nothing wrong with that and it's done quite often. But if if you uh take that that situation and abuse it, that's where trouble can can occur. So again, it's about transparency or the lack thereof.
▶ 1:22:33When things are opaque and you can't see through them, um that's when when bad actors start to to manipulate the system. And that's what we're starting to see. That's what needs to be changed.
▶ 1:22:42And do you think we can uh appropriately kind of root that out or or split that up? I
▶ 1:22:47I do. I think we need to start somewhere. I think and starting with the forms. I know there was a comment about the IRS has lost 27,000 people. It's not about the manpower at the IRS, so to speak. It's about the expertise to work smarter and more efficiently. I work alongside revenue agents and criminal investigators all the time. They're wonderful people. They're smart. They need the tools and and that funding for tools is important.
▶ 1:23:09It's not a matter of body count or headcount in in that perspective, but training the right people and having the information come in on the front end that they can uh act on in a timely fashion.
▶ 1:23:19Would the gentleman yield? Thank you. My time has expired. That would be up to the chair.
▶ 1:23:24I'll Richie, I'll recognize you first.
▶ 1:23:26So, is the witness suggesting that a cut of 27,000 employees at the IRS does not have impact on sophisticated, complicated audits?
▶ 1:23:34Well, when we're m Mr. Ranking Mr. Neil, the um the issue really is what was cut at the IRS. Was it line agents? Was it clerical people? If if the uh in my
▶ 1:23:47all of them,
▶ 1:23:48what's that? It's all of them.
▶ 1:23:50Well, my understanding is the criminal investigators are still present. I'm working alongside several cases with them now. And so again, what I what I see is it's it's not about just a wholesale headcount. It's really about the expertise tools.
▶ 1:24:03Mr. Dog,
▶ 1:24:05surely there are few better examples of the total misdirection of this hearing than the FAA. That's the Future Farmers of America. They have been challenged by Chairman Smith for taking a contribution from Zena, a company that supported them for decades but was acquired by a Chinese company. This kind of nonprofit that around the country would say help a student prepare a hog for to win a ribbon at a county livestock show.
▶ 1:24:36But as usual, the real hog involved here is the Trump administration. No Republicans have voiced the slightest concern that the very same sententa contributed a quarter of a million dollars to President Trump as did another Chinese company to which he cozied up for his inaugural giving them a full million dollars. This committee has completely ignored the most powerful self-created taxexempt organization in the country.
▶ 1:25:05That would be President Trump himself and the web of businesses that his family controls. Trump has famously bragged about how smart he is to avoid taxes. And of course, we know he was so smart that he did so in 10 separate years. No taxexempt organization has been more vulnerable or more welcoming to malign foreign influence than Donald Trump. Unlike every modern president before him, he refused to devest his business interest or place them in a blind trust.
▶ 1:25:35Instead, he effectively erected a giant sign on himself, his family, and the White House, "We're open for business." In addition to cozing up directly with various Chinese companies, the Wall Street Journal, as has been noted, recently published an article, Spy Chic bought secret stake in Trump Company, known as the Spy Chic, an Abu Dhabi citizen, uh, invested $500 million, half a trillion dollars,
▶ 1:26:05half a billion dollars in Trump's World Liberty Financial. The Trump family got $187 million directly and immediately. Then the Trump J regime just coincidentally lifted export controls on the selling of America's most advanced artificial chips. Tens of thousands of these chips have been authorized to be shipped to a UA firm called G42.
▶ 1:26:32This is the same G42 that the recent not Democratic but Republican chairman of the House Select Committee on the Chinese Communist Party warned and I quote, "G42 presents risk to critical technology and export controlled research." The chairman also noted that this was a company that developed dualuse technologies through its subsidiaries and materially supports the PRC military.
▶ 1:27:00Instead of safeguarding our most advanced AI technology, Trump has now authorized the sale of these chips to a firm with deep ties to the PRC and the Liberation Army. Of course, the Trump family got a ninef figureure payday in return. This is part of a long and deeply troubled pattern of personal Then there is uh also Mr. Mr. Xiao. He's the one that President Trump pardoned.
▶ 1:27:30Uh he's being sued by the victims of the October 7th Hamas attacks, alleging that his company helped facilitate the transfer of hundreds of millions of dollars to Hamas. At the same time as he sought a pardon, he just coincidentally provided critical support to Trump's crypto venture. The taxexempt organizations that my Republican colleagues have singled out here today do not wield that kind of presidential power. They can't pardon individuals accused of financing terrorism.
▶ 1:28:01They can't discard export controls and provide China the most advanced American AI chips. and they cannot subvert our democracy by selling off our national interest to the highest bidder to become the biggest hog in the land. There are only a few of the many examples of Trump malfeasants. Now, the type of action that is being advanced here today was no doubt inspired by Vladimir Putin and Victor Orban.
▶ 1:28:28uh two people that Trump clearly admires their authoritarianism because they have spent a good bill of time smearing nonprofits in their countries as foreign agents snigmatizing them and musling with free expression. It's also fitting and deeply troubling that one of today's witnesses has cited the No Kings Rally as an example of the kind of misfeasence of which they complain.
▶ 1:28:53I spoke to thousands of my neighbors in Austin last October at one of hundreds of these events. It was an expression of democratic values, peaceful, not a threat to anyone except those who insist on authoritarianism. In America, we do not punish critics. We do not crown kings and we must not sell our democracy to the highest bidder. I yield
▶ 1:29:18Thank you. Um, I want to respond to the comment since I was raised in U. Mr. Dogget's comments about the FFA.
▶ 1:29:27That's the first time FFA has been brought up. But FFA, Mr. Dogget, is a very, very important organization to myself. In fact, when you go down to my personal office, the very first thing that was ever hung on the wall is my framed FFA jacket. And it stands here today. It's an organization that so many members care about. It it helps create the future agriculture leaders of tomorrow.
▶ 1:29:55But when that organization's largest fun is Sagenta, which is connected to the CCP, we do not need to allow our kids to be infiltrated by the Chinese propaganda. And so I want to correct the record for that. Mr. Kelly, you're recognized.
▶ 1:30:12Will the gentleman yield on that?
▶ 1:30:13You're not recognized, Mr. Will the gentleman yield for unanimous consent to enter the letter uh that you wrote into the record? Just unanimous consent to put your letter.
▶ 1:30:21I would love that letter into the record because the American people know that the Chinese should not be indoctrinating our children in the FFA.
▶ 1:30:30It's okay for Donald Trump to take a quarter of a million dollars from them. You don't care about that.
▶ 1:30:36Mr. Kelly,
▶ 1:30:38thank you, Chairman. Um I just I'm I'm confused. I I don't know this the hearing today is a result of hangover from the 2024 election and with the Trump arrangement that seemingly goes with everything. Uh, by the way, this I'm going to read this.
▶ 1:30:54The topic of the of the round table would be provide the opportunity for members to highlight his continued oversight of the tax exempt sector focusing on the perverse and outsized influence foreign adversaries including the Chinese Communist Party CCP to interfere with elections and fuel anti-semitism. It would be nice if we could actually talk about the issues that we're concerned about. Uh, Jake in our office.
▶ 1:31:20uh gave me a note and he said you know we were looking looking at the nonprofits nonprofit economy now comprises 15% of our GDP manages over8 trillion in assets and nets $238 billion in net income.
▶ 1:31:38So getting to that as opposed to uh who's getting a jet or who's getting a new ballroom as opposed to the previous administration where I think there were a lot of questions about who was getting what from whom. Um I got to tell you coming from the private sector where I do pay taxes uh and there's only two times in my life I haven't paid taxes and people said that's amazing. How'd you get away with that? I said well we lost money that year.
▶ 1:32:06that didn't keep us from paying wage taxes and real estate taxes and every other kind of tax that the American people burden and I think they're starting to look is what is the return on my investment. Uh Mr. S, I was really interested and but everybody thank you for being here today. This is incredibly important because the the subject is really about where are these dollars going and what are they funding. I'm amazed that people can travel all over the country and go from demonstration to demonstration. I don't know who pays for their airfare.
▶ 1:32:36I don't pay who pays for their hotel, who pays for their food. Who makes up these elaborate signs that they seem to be able to unload under somebody's trunk. Most of the places I go when I'm up for an election are kids with a sheet of paper that they use magic marker. Uh so I am I'm fascinated, but we got so far off from where we're supposed to be. Now, Mr. So, from a national security perspective, how concerning is this model of foreign link donor networks embedding themselves with within US protest inf infrastructure?
▶ 1:33:07Somebody's picking up the tab. Uh yes. So, we from a simple you let's take the example of care California. So, with Care California, they uh used a they had an EIN number for Care California and they got millions of dollars in in taxpayer grants and they were supposed to administer those grants to independent registered entities and uh standard judiciary committee started asking a few questions about uh whether or not that money was directed back into Care California
▶ 1:33:37itself or was directed out to third party independent uh registered entities. uh and the head of care California voluntarily sent a letter back uh to to Congress stating that they had no authority over those funds and it was it was it was a grant designed as I mentioned earlier to help support Afghan refugees that had supported US mission overseas.
▶ 1:33:59So, it's just very hard to believe that some of these instances are accidents because uh when you have uh when you have that level of of funding that comes from from from taxpayers and then the money is basically self-delt right back into the same organization. Uh that's not an accident. So, I do think it requires further investigation. in terms of uh you know some of the other conversation happening here and I don't know if I'm permitted to just mention this quickly is you know the the operative word I thought in this in this session this morning would be around transparency.
▶ 1:34:28I mean there's not an American that doesn't know whether or not it's right or wrong about the Jets and and all of that but uh they're not showing up in my community. They're not you know my daughter wants to go to Rockefeller Center during Christmas at 16 years old with her friends. I was afraid that I knew that from my knowledge and the work that I do with the NCRI that there were going to be severe demonstrations that could be blocking uh hospitals that could be blocking this lighting of the Rockefeller Center Christmas tree. Uh these are things that I worry about with my teenage daughter.
▶ 1:34:56So this is coming to our communities at home and it's where how is this money getting into the hands of these individuals that are stampeding our communities and we need infrastructure in place that can match the level of the threat that's meeting us on the streets of our own communities.
▶ 1:35:09And I think uh you know the transparency is what I'm hoping that we could accomplish here this morning is to really set in in place an infrastructure that can identify these problems where the money's coming in and how it's getting into the hands of these people like you say that are often uh sewing dissent and and breaking the trust between Americans themselves.
▶ 1:35:26Well, thank you for bringing it back to the real reason we're supposed to have the hearing today. I wish we could just stay on policy and not politics. I know it's very difficult to do. It was difficult for our for ourselves with the previous administration. I think the American people uh are more concerned about who is it that's funding something as opposed to which party thinks that that their their previous person got more than this person. I'm tired of hearing about jets and ballrooms and everything else.
▶ 1:35:52I I got to tell you, I've always been worried about the 6th and the 21st of every month and people said, "What is that for?" I said, "Those were paydays at my business." And I was really concerned with it. But it it I'll tell you what, I'm fed up. I'm fed up with paying an incredible amount of taxes when we're successful and watching it dribble into every possible thing that we could put it into. And that bottom line, nobody's kidding anybody.
▶ 1:36:14You talk about buying votes, the way you buy votes is offer something to people that they say, "I think I'm getting this for nothing." I said, "No, you didn't get it for nothing. Hardworking American taxpayers fund everything." I want to thank you for taking a day out of your lives to be here. I appreciate all your opinions. Let's stay on this subject of who is doing what to whom as opposed to a political battle over something. I look, I know you all don't like President Trump. We didn't particularly care for for President Biden. But at the end of the day, I never called him Biden.
▶ 1:36:44I called him President Biden. And I'm always going to call Mr. Trump President Trump because that just happens to be what they're doing right now. Thank you, Chairman. He yield back.
▶ 1:36:52Mr. Thompson.
▶ 1:36:54Thank you, Mr. Chairman. Yeah, I think we should all agree that foreign malign influence in the United States is real. It's serious and it needs meaningful oversight. But I don't think that's what this hearing is about. Seems to me that this hearing is more about organizations whose viewpoints some members of this committee disagree with.
▶ 1:37:15If we're truly concerned about foreign influence, that concern cannot be partisan and it cannot conveniently stop at the door of the most powerful office in the world. If foreign influence is the real issue, we can't ignore the president is reportedly accepting major financial benefits from foreign governments.
▶ 1:37:39As was pointed out, a luxury aircraft from Cutter, a reported $500 million stake in the a in the UAE in a Trump company tied to the access to advanced AI technology, to ballroom investments, to crypto investments or anything else. If we're serious, then members of this administration should be sitting before this committee today answering questions.
▶ 1:38:06Instead, the majority has allowed serious national security and public trust concerns to go unexamined. The majority has yet to condemn the president for effectively controlling both sides of a lawsuit involving himself and the IRS. One where he could g he could benefit by a billion dollars. And we have credible reporting of a whistleblower alleging that highly classified intelligence was blocked from reaching this Congress.
▶ 1:38:36Those issues go directly to public integrity and to oversight. Yet today, rather than addressing those matters, we're debating whether certain nonprofit organizations, often advocacy groups, whose view whose views the majority opposes, whether or not they should have their taxexempt status scrutinized, which apparently, as brought up by my colleague, Mr. Dogget, the future farmers of America, the FFA.
▶ 1:39:07I have my FFA jacket as well, Mr. chairman and I meet with FFA students all the time in my district and I've heard I've seen no evidence that the Chinese are influencing them. I ask unanimous consent to put this letter uh into the record.
▶ 1:39:24Without objection,
▶ 1:39:25the Supreme Court has repeatedly affirmed that the government may not punish speech or association by selectively targeting organizations for their views. Using the tax code as a tool to suppress oppo opposing perspectives would be unconstitutional. Now I agree with my colleagues on one point. Oversight of malign foreign influence should be robust, but it must be evenhanded.
▶ 1:39:55If we're going to demand transparency from nonprofit organizations, that standard must be applied across the board. Many of the witnesses before us today represent organizations funded heavily and sometimes almost entirely by anonymous donations. So I want to ask each witness before us. Yes or no? Will you submit your donor list for the record starting on the right?
▶ 1:40:22Yeah. Our donor list is public.
▶ 1:40:24Yes or no?
▶ 1:40:25Our donor list is public and yes. I
▶ 1:40:27I don't receive donations. I'm a private Uh 990 is a public and I I have no problem sharing donor information. All of our donors are here or Americans.
▶ 1:40:38Yes or no is fine.
▶ 1:40:39Yes. Yeah.
▶ 1:40:40Uh Americans Republic Trust respects our donor's right to privacy and are proud to uh state prevent uh foreign funding. Uh no.
▶ 1:40:51Yes. I will say we receive no foreign funding. No, I will not violate the constitutional rights involved.
▶ 1:40:57That's a yes or no. So starting from my left going the other way, can you certify under oath that your organizations have never received funds from a foreign, national or foreign
▶ 1:41:15Yes. We did receive a a small grant from the UK government to investigate child harms. I my company's never received grants or donations from any foreign
▶ 1:41:26Not to my knowledge.
▶ 1:41:27Thank you, Mr. Chairman. yield back. M
▶ 1:41:29Mr. Schwiker,
▶ 1:41:30thank you, Mr. Chairman. Um the Ways and Means um oversight subcommittee, we've actually spent some real time on tax exempt and um look look from from a global standpoint, 17% of the US economy now is in the taxexempt space. So you start to see our world of trying to finance government those things and the leakage because we don't have enough information.
▶ 1:42:00Um uh Mr. Deansky um you actually got closest to where I think there's it's not a solution but at least we would know what we're working on. And from the left to the right, we've actually had a proposal, a number of us in the oversight subcommittee on to modernize the 990 forms.
▶ 1:42:21And this would affect all sorts of taxexempt organizations from my credit unions to a hospital to maybe someone dodgy trying to How would you design a modernized because because our 990 form barely provides any useful information, but we could actually see what's really going on because for for everyone the basic standard of tax exempt is you provide more community goods.
▶ 1:42:50good than the value of the taxes you would have paid. That that was the underlying standard. How would you change the 990
▶ 1:42:58It's a great question. I would start by um taking a fresh look at the form and basically reconstructing it from top to bottom. I think there's some good information on the on the current 990. There are a lot of different schedules and subsc that that information can be easily used uh and not for political purposes. I'm totally against that, but for pro proper purposes by the IRS for transparency. Um so there could be a series of questions put on there as I said earlier on fiscal sp sponsorships.
▶ 1:43:28There could be you know banks have a tremendous um anti-moneyaundering and know your customer uh regime uh that they have to follow. And I'm not suggesting that nonprofits and tax exempts should should do that. It's very ownorous. But I think if you have some questions along those lines are who's the ultimate beneficial owner, do you know if certain contributions are above a certain threshold, we need to know who's behind those? I I think that that's very important.
▶ 1:43:52So I would start from fresh taking a fresh look at the form and all the schedules with the goal of transparency for uh ultimate uh enforcement actions if necessary and if
▶ 1:44:03Okay. you're going I'm maybe slightly more cynical than even you are.
▶ 1:44:07Um because we've actually looked at some of these where it's a donation to a tax exempt to a donation to a tax exempt to a field operation that's bundling and then another one and somehow we see where it ends up in US politics, you know, but it's a voter registration drive just only in the right zip code,
▶ 1:44:28Um and you can understand um Mr. Mr. Walter, what would you how would you redesign the 990 form? And do we need to have more of it's not just who you transferred money to, but I so we need the chain of lineage. What would you do?
▶ 1:44:46Uh well, thank you for the question, uh, Congressman. Certainly, um, additional transparency is would be very valuable. Uh, EIN numbers are not always used on 990s when one nonprofit is giving to another. That's certainly an important way to help track. Um, you could expand the disclosures for uh the highest paid employees, for the uh highest paid contractors.
▶ 1:45:09The fiscal sponsorships uh could be required to be listed uh possibly with a basic budget for them uh or the name of the individual who's the principal officer of the fiscally sponsored project, when the project begins and ends. Um and then uh whether whether the project uh applied for its own uh exempt status independently uh and obviously uh the simple thing of do you accept uh foreign uh money that's the single most obvious
▶ 1:45:38any concerns on your part between the leakage between a C3C um offsetting expenditures in in that just that simple world there. Uh well, some of that is already supposed to be disclosed. Um
▶ 1:45:53supposed to be, but it's really hard to
▶ 1:45:55Yes. Uh and and you're right, there are cost sharing agreements there that are that are very problematic. Um in that case, it's probably the law that needs to be changed. Uh I wouldn't think it's a bad thing. I mean, conceivably just say C3s are not going to be allowed to give to C4s. Um that alone would be a significant thing. the the big uh left-wing foundations would be very angry. But
▶ 1:46:18um Mr. Chairman, um there may be an actual solution that could come out of this um hearing that's actually not Republican or Democrat, but just good tax policy. Let's clean up, modernize the 990 form so we actually know what's going on out there. And with that, I yield back.
▶ 1:46:36The whole purpose of the hearing is to find solutions to solve the problem. Um Mr. Larson,
▶ 1:46:42thank you, Mr. Chairman. And I want to thank the witnesses as well and uh thank you for your participation and certainly as Mr. Thompson pointed out, you know, foreign influence should be a concern to all Americans and as expressed in your testimony, we can see clearly that it does. Mr. Walter, you in fact u cited an article from the New York Times, I
▶ 1:47:07What was that? What was that article again? Uh, it's an extensive article reporting on Neville Singum's uh, worldwide network.
▶ 1:47:14Yeah, I take it you read the times
▶ 1:47:17Uh, what I have to
▶ 1:47:20Okay. Oh, it's that bad, huh? Well, I'd like to submit for the uh, for the record u, an article from the New York Times entitled Trump's cash grab undermines our republic. You may have been uh, familiar with that, but uh, both Mr. Dogget, Mr. Thompson, Mr. Neil have already mentioned a number of the that exist here.
▶ 1:47:40So here you are as witnesses before a committee and you got to be asking yourself so why is it that they are focused on not just exclusively what I have to say because we think there's a connection and we think there's a connection when witnesses aren't called before us. You think Elon Musk should come before the Congress and testify Mr. Dinsky? It depends on what you're asking.
▶ 1:48:07You think he should, Mr. Trump? Depends on what you're asking. Okay. Uh, Miss Sutherland, should he come? Elon Musk?
▶ 1:48:13Depends on the subject matter of the hearing, I think.
▶ 1:48:15So, if he was subject matter is social security, should he come and talk about it and what he's doing with Doge in
▶ 1:48:22Um, I cannot speak on to Elon Musk.
▶ 1:48:24Is that okay, Mr. Walter? Should he
▶ 1:48:27Uh, well, yeah. I'm I'm not a spokesman for him. I mean, I don't see it would be wrong. the United States Congress asks him to come and testify as an American citizen. Should he?
▶ 1:48:41Yes or no?
▶ 1:48:42Uh well, presumably, but of course there are many I would like to suggest for
▶ 1:48:48Uh yes.
▶ 1:48:49Yes, he should. Yes,
▶ 1:48:52it's his right. If he wishes to come, he
▶ 1:48:54If it's not his right and the Congress asks him to come, he has the right not to do it. Is he above the law?
▶ 1:49:00No. You you said if if he was invited. If he's subpoenaed, that's a different
▶ 1:49:04Well, if he's subpoenaed,
▶ 1:49:06then that's a legal issue that I'll
▶ 1:49:07What about Doge? Should they come that before the committee? Mr. Mr. Weissman, do you think they should come before the
▶ 1:49:13Yes, sir.
▶ 1:49:14What about Doge? Do you know anything about Doge? We don't because they don't they've never been before our committee to testify before us, but we don't know anything about them. So, my point is this. When you think for the moment that you're here to testify about something, it's all related to other testimonies that go on. Here's the big question in a number of our minds. This concern about China should be something that gets everyone's attention. So, let me ask the follow-up question.
▶ 1:49:45Should we therefore militarize our election process?
▶ 1:49:50We'll start with you, Mr. Walter. Uh, I certainly don't think it should be militarized and I'm very sorry that that your party has been willing to try that in uh recent years.
▶ 1:50:02Miss Southerntherland, should it be
▶ 1:50:03No, it should not be militarized and be free from foreign influence from China.
▶ 1:50:07Son, should it be militi militarized?
▶ 1:50:09No, we should be able to free our elections from foreign influence without
▶ 1:50:13And so would that require No, I think it requires knowing when money is coming into the country and using our nonprofits as a laundering scheme to bring their narratives into our communities.
▶ 1:50:24Dubinsky, do you
▶ 1:50:25in the general context? No, I don't think it should be militarized.
▶ 1:50:28Mr. Weisman,
▶ 1:50:29certainly not.
▶ 1:50:30Mr. Weisman, you've also suggested the contradiction that exists here today in terms of the testimony etc. and the full breath of testimony, not just a narrow focus designed to achieve one result or to say that there is only one concern here that's going on and that happens to be about China and how we deal with it.
▶ 1:50:55Forgive me for thinking that this is all part of a process that ultimately says, you know what, we're going to have to militarize these elections to guarantee that we're safe. uh to make sure that these things aren't taking place when in fact what we know is the goal is to intimidate and prevent people from coming out to vote. Have we ever militarized an election in this country? Mr. Weissman
▶ 1:51:22perhaps during the Civil War otherwise I'm not aware of it.
▶ 1:51:26Mr. Disky, do you know?
▶ 1:51:27Uh I'm not aware.
▶ 1:51:28Mr. Sun, Mr. Sutherland, Mr. Walter. So, I think you you get my point and the point is is that while we should all be concerned and make sure that collectively we're addressing the concerns of foreign influence, there's a lot more going on here than meets the eye. And that's why the outcry is here. And that's why I want to submit this New York Times article for the record.
▶ 1:51:56And that people and Americans should be paying close attention to this.
▶ 1:52:01Without objection. Mr. Estus.
▶ 1:52:05Well, thank you, Mr. Chairman, and thank you to all our witnesses for taking a day out of your lives to uh appear before us. And I hope we can get back on the the topic of malign foreign interference in our nonprofit sector as we go forward. It's important to us to have the intense scrutiny on this space so that legitimate nonprofits can continue to serve the American people and to prevent American taxpayers from unknowingly subsidizing bad actors that do not share our values.
▶ 1:52:31This committee has a responsibility to prevent foreign governments from exploiting our tax laws to interfere in our elections, fuel anti-semitism, and support terrorism threats against the United States. Most recently, nonprofit groups have joined a push to defund ICE and attack law enforcement after receiving hundreds of thousands of dollars in donations uh linked to the Chinese Communist Party.
▶ 1:52:54For example, since 2018, the Chinese American Planning Council has received at least $445,000 in donations from people and organizations controlled by the Chinese Communist Party. These funds have been used to directly sew discord in our society and support violent riots across the country. This has to stop.
▶ 1:53:15Our oversight's critical to ensure we address these abuses and risk o to ensure we address these abuses and risks and proactively work to prevent them from escalating. We must have more transparency, accountability, and oversight on all foreign money flowing through US nonprofits to ensure that American taxexempt privilege is protected.
▶ 1:53:36Congress and this committee have the power to ensure taxexempt status remains a tool for legitimate good work while prohibiting foreign propaganda from being subsidized by our tax code. I'm proud of the work this committee has done in bringing these issues to light and look forward to discussing them further. Mr.
▶ 1:53:53zone uh your research on on diseconomies of memes illustrate how state actors like Iran have used coordinated bot networks to manipulate financial a assets like gold and crypto to sub subvert some of the international sanctions.
▶ 1:54:08Uh we're seeing a similar pattern where uh foreign entities don't just spread fake news but instead instead fund camouflaged independent US taxexempt organizations to provide what appears to be an academic or charitable veneer to these state aligned narratives. Given your background on tracking these, h how do you address the danger of narrative laundering, you know, where these foreign backed disinformation uh can be scrubbed of its of its origin?
▶ 1:54:37Well, thank you for the question, Congressman. First, you need u a way to systematically identify when uh narratives are coming from hostile foreign regimes into our American nonprofits uh for uh to be cleaned and then put through through the legitimacy of our nonprofit system and put into our communities. Second, um from an enforcement pipeline perspective, I don't know where that exists today in the federal government. So, uh we need an infrastructure uh that not we could identify these risks.
▶ 1:55:06the NCRI, our organization can identify these risks, but then how what do you do about them once you once you find them? So, I think that's an issue. I think what we're finding is that essentially hostile foreign regimes are discovering that you don't need spies anymore. Uh basically, they're using uh out in the open our own systems against us. Uh they find American nonprofits that will do their bidding. These nonprofits are rewarded with more funding, with more support, uh with amplification of their messages and the missions of their organization.
▶ 1:55:34Uh so it's it's a bit of a perfect storm. So I I do hope that this committee does look continue to look past the politics and recognize that this could be happening uh in any organiza from any any nonprofit in their community. Uh and I think that the nonprofits that have kept these communities strong through for centuries should remain in place. I mean when did we start nonprofits? In the 1800s. So when since when did all of these foreign countries become interested in our nonprofits?
▶ 1:56:02whether it's our universities, our public schools, or the nonprofits in our
▶ 1:56:06Thank Thank you. You know, Hansorg V, as mentioned earlier, is a Swiss billionaire who's funneled hundreds of millions of dollars into liberal nonprofits through donor advised funds and nonprofits managed by Arabell of Adviserss uh including things like 1630 fund, new venture fund, burger action fund. You know, this foreign billionaires has quietly created a sophisticated political operation to advance uh these progressive policy initiatives.
▶ 1:56:31You know, states newsroom started as a project called Newsrooms Network inside the Hopewell Fund, an Arabella adviser managed of 501c3 around late 2017. The Weiss's Foundation uh gave States Newsroom a million dollars in 2020 and a million over a million dollars in in 2023.
▶ 1:56:52In my home state of Kansas, uh, an entity called the Kansas Reflector launched in July of 2020, uh, in Topeka as a direct affiliate of State's newsroom. Since its inception, the Kansas news, the reflector has functioned as a taxexempt hit piece, writing critical stories. I mean, a business operating as a business should be paying taxes. Miss Sullin, I know I'm close to being out of time, so can you quickly say a comment about why we why we should subsidize with our tax code, you know, one-sided media coverage?
▶ 1:57:21Uh absolutely the problem of states newsroom in your home state in actually in all of your home states. Uh the state's newsroom runs fake newspapers in all your home states. Kansas reflector uh in yours and the fact that we have news being paid for with foreign dollars uh is something that needs to be fixed. We should not have news networks uh be propaganda pieces whether or not it's a Swiss billionaire or uh propaganda from the CCP.
▶ 1:57:48Well, thank you very much and I'll yield back. Mr.
▶ 1:57:49Thank you, Mr. Davis.
▶ 1:57:51Thank you. Thank you, Mr. Chairman. And I also want to thank all of the witnesses for your testimonies. As I listened, I know the value of nonprofits in my communities.
▶ 1:58:05I know that the strength of nonprofits include their missiondriven work as well as their commitment to transparency, accountability, and regulatory I know that organizations and individuals have constitutional rights to free speech, freedom of association, and due process.
▶ 1:58:32I know that today's hearing is not a serious effort at oversight. Republican leadership cannot earnestly seek to limit foreign influence in the public sphere when they only target groups with whom they disagree and ignore how the president welcomes foreign influence as long as he and his family profits.
▶ 1:59:01I mean, I grew up in rural Arkansas, and so I know how important the Future Farmers of America is. Yet, this committee is pushing an of the FFA because it receives funds from the same that donated hundreds of thousands of dollars to President Trump and Vice President Vance's
▶ 1:59:32inaugural committee. I know that they are real threats to our country and to the programs within this committee's jurisdiction that already So I ask when will this committee consider what whistleblowers revealed about Doge's mishandling of data?
▶ 1:59:55When will this committee investigate the administration's efforts to weaponize the Internal Revenue Service, especially against organizations that disagrees with it?
▶ 2:00:09When will this committee examine the illegal halting of child care cash and services funding to Democratic states, all programs within the jurisdiction of this committee and actions that are all prohibited by stature. So, Mr.
▶ 2:00:32Priceman, could you speak more about effective instruments to address foreign influence and not using the government as a weapon against political adversaries?
▶ 2:00:49Yes, thank you very much, Mr. Davis. I think there are two primary kinds of disclosure regimes that exist or should exist. One is the Foreign Agent Registration Act, which is an imperfect statute, which I would encourage this committee to look at for reform, but it does require the registration and the documentation of what people working for foreign governments or foreign principles are doing. This administration announced at the outset it would not enforce that law except in extreme circumstances.
▶ 2:01:19Then it said yes we will in another set of limited circumstances when we want to go after our political enemies. So that is wrong. We should end the weaponization of FAR and renew its actual enforcement on the political the election side. There is a problem with foreign money coming in and we have no idea the scale of that.
▶ 2:01:42The solution for that is the disclose act which would require these different forms we're talking about C3s C4s to disclose who then effectively and most importantly the C4s to disclose from whom they were receiving funding and to certify they are not receiving funding from foreign entities.
▶ 2:02:02I think if we move away from these individual cases and selecting out organizations based on political viewpoint and actually look at the policy issues, there should be room for agreement. Those are the top two things. The other last thing I would say is, as I mentioned in as I've detailed in my testimony and mentioned in my oral statement, this administration is across the board obliterating the agencies that are in charge of dealing with foreign influence.
▶ 2:02:29So it should restore those agencies and let them do their job.
▶ 2:02:33Thank you. Thank you very much. And I yield back, Mr. Chairman.
▶ 2:02:37Thank you, Mr. Leood.
▶ 2:02:39Thank you, Mr. Chairman, for holding this important hearing. I want to thank our witnesses for your testimony and being here today. And I want to begin by obviously recognizing the important work that charities and foundations and other nonprofits play in American life. Uh they feed our families, they care for our veterans, they respond to disasters, and they step up where government often can't. These organizations are built on generosity, trust, and a commitment to the common good, and they deserve our respect and support.
▶ 2:03:09In the House, I'm proud to be the lead sponsor of House Concurrent Resolution 4, which recognizes the critical support provided by taxexempt fraternal benefit societies. I've also led um and will soon be introducing the Workforce Development through post-graduation scholarship act which will allow charitable organizations and foundations to help better assist students in paying off student loans and boost economic growth in our local communities.
▶ 2:03:37Having said that, however, I think we have to be cleareyed about the growing efforts by the Communist Chinese Party, the CCP, um, and other adversaries to exert influence in the United States, uh, particularly through nonprofit organizations. And, uh, this isn't about questioning good intentions. It's about protecting American civil society from foreign interference.
▶ 2:04:03uh transparency, accountability, and strong oversight are essential so that our charities remain focused on serving the American people and not advancing the interest of an adversarial foreign power. Beyond serving on this committee, I also serve on our select committee on China, which is a bipartisan committee put together roughly three years ago focused on how do we win the strategic competition against China and exposing the malign activities that the CCP is involved with. Um Mr. Mr. Dinsky, I'm going to start with you.
▶ 2:04:33Um, as an expert in unmasking complex financial fraud schemes and influence laundering, I want to direct your attention to the the Singham network which presents a highle case of layering of layering. Um, we see a sophisticated multi-layered flow of capital funds that originate in Singham and Shanghai, move through his private LLC's, and then are transferred to a donor advised funds, DAFF.
▶ 2:05:02From there, the money is granted to Singham's own nonprofits that act as passroughs such as uh the Justice and Education Fund and the People's Support Foundation, which subsequently distribute the funds to other groups in the Singham Network like the media outlet Breakthrough News or the People's Forum, which organizes protests that have turned violent.
▶ 2:05:27By the time the money reaches the enduser, the original donor's name has been stripped away three or four times and the taxexempt status of the DAFF and the other nonprofits uh has provided a layer of uh to the entire operation. So from a forensic standpoint, what is the strategic advantage of using a major institution as a middleman number one?
▶ 2:05:52And does this uh layering through the donor adise fund or DAFF make it virtually impossible for the public uh or proper oversight to connect the radical activities of a group like the people's forum back to a benefactor living in Shanghai?
▶ 2:06:09Yeah, thank you for the question. you know, when you use a legitimate financial institution um or a large financial institution in the process, it adds legitimacy to the process. Uh so if you're having a a donor advised fund coming from a large major um uh sponsor and that money is going through, it adds an air of legitimacy to it. It's almost impossible to to unpack the layering that goes on in the in these structures. Uh I spent five years investigating the largest tax fraud that occurred in the United States uh to date.
▶ 2:06:40um layering entities all across the world. It took multiple man-hour and time to unravel all that uh subpoenas, letters of letters of to foreign countries to get information. It's next to impossible to try to get the information to do that. And the bad actors know this. They know that if they're jumping from from place to place, jurisdiction to jurisdiction, things are running through different bank accounts, it loses the uh the original identity. And that's the whole purpose when a bad actor does that. So, it's a real problem.
▶ 2:07:10I don't have the answer for that. Um, when when those when those situations come to light, you need to investigate it and follow the money. It comes back to following the money in that situation. Uh but you know maybe on the we go back to the form 990 maybe disclosures on how much how how many times you're receiving money from a DAV per year and what's the total amount coming from DAVs may give a flag to the IRS to then focus in on that charity um where they could do additional investigation and see if there's a real problem.
▶ 2:07:40Again, as you mentioned in your in your statement, charities do good work and we shouldn't put a reporting regime in place that uh hamstrings charities from doing what they need to do. But the American people deserve the transparency and also the confidence when they're giving money to a charity, the confidence that that money is not being co-mingled with bad money and it's going to good uses.
▶ 2:08:00Thank you. I yield back. Thank you, Miss Sanchez. It's recognized.
▶ 2:08:04Thank you, Mr. Chairman. Um, this hearing is interesting because I think it's a very clear example of my Republican colleagues hypocrisy. On the one hand, they're expressing concern for foreign money in politics, while President Trump, on the other hand, has accepted millions of dollars and lavish gifts from foreign entities ever since he won the election. I agree that we should have stricter guidelines about foreign interference in our politics, but really, does the Republican party have a leg to stand on here?
▶ 2:08:34Behind me, I have only some just some of the many examples of foreign entities that contributed to President Trump's inauguration committee, a taxexempt 501c4 organization. This includes Chinese affiliated entities like Sententa, which has been mentioned today, Gan Incorporated, and Tik Tok, just to name a few.
▶ 2:08:56In fact, as has already been mentioned today, our chairman led a letter just last week citing concerns with the n national future farmers of Americans work with Sententa. Our chairman forgot to check whether or not President Trump had money from the CCP controlled Sententa group as well. Not only has Trump taken foreign money, but he was also gifted a $400 million Qatari jet.
▶ 2:09:23Are we going to pretend that these donations don't have any bearing on politics? Even our chairman had concerns about that. Mr. Walter, you testified both today and in front of this committee in 2023 that we possess, I'm quoting you here, quote, "We possess near universal agreement that foreigners and foreign money should not meddle in our politics." End quote. And I agree with you on that.
▶ 2:09:49Clearly, however, our president has a different Some of these examples are from the same countries that you criticize left-wing groups from taking money from, but Trump is taking money from them in much larger amounts. And many of these groups are not affiliated in any way with the Democratic Party. Mr. Walter, would you consider President Trump's inauguration committee to be affiliated with the Republican party?
▶ 2:10:16Yes. Okay. Thank you. I heard a lot of criticism of left-leaning organizations in your testimony today. Um, I'm curious, would you classify the organizations here as foreign entities?
▶ 2:10:32Uh, businesses, I assume, with uh foreign ties. Yes.
▶ 2:10:37Ownership interests from foreign countries. Does that not make them foreign entities?
▶ 2:10:45Thank you. I agree. Although I didn't hear you mention any of these in your testimony today in your criticisms of foreign malign influence and the money that is going uh into different uh pockets. Um I will say that most of these organizations which are based or have affiliates in China have funneled huge amounts of monies directly into President Trump's inauguration committee.
▶ 2:11:14So my plea would be that if we're going to have a plea for transparency and for oversight and for stopping the malign influence of foreign money in our politics, in our government, then we have to start from the top down. You cannot apply one set of rules to one set of people and a completely different set of rules or no rules to somebody else.
▶ 2:11:38If we're going to have this conversation about foreign interference, we have to be honest that it starts at the top down. And with that, Mr. Chairman, I yield back the balance of my time.
▶ 2:11:49Thank you, Mr. Hearn is recognized for 5
▶ 2:11:51Thank you, Mr. Chairman, for holding this hearing. And thank you to our witnesses for being here today and taking valuable time out of your lives to come here and talk to us about this very important issue. Tax advantages have allowed nonprofits to underwrite coordinated campaigns, politicize the courts, and impose costs on defendants without direct accountability.
▶ 2:12:08Just as nonprofit tax exemptions can directly incentivize lawfare for profit, third party litigation funders preferential tax treatment turns lawsuits into tax advantaged asset class, leading to predatory and frivolous lawsuits that overburden the courts and raise prices. Both sectors bypass normal processes. Nonprofits evade democratic policymaking through tax exempt lawsuits and forprofit and for-profits use tax loopholes to treat courts as an investable vehicle.
▶ 2:12:38This distorts outcomes and harms everyday Americans through their higher cost. Ronald Reagan once said, "If you want more of something, subsidize it. If you want less of something, tax it." Nonprofit and for-profit entities have a significant tax incentives to meddle in and distort the US legal system, whether for economic or political gain with no accountability and no transparency. Similar to the complex business structures of nonprofits, for-profit entities are structured to operate within our court system.
▶ 2:13:07In some cases, tax-free or with preferential capital gains treatment. Mr. Walter, you have done a great job highlighting the concerns with foreign entities such as those tied to the CCP, funding US taxexempt nonprofits to support climate litigation and other lawfare against American energy companies. Unfortunately, nonprofits are not only entity are not the only entities steering outside money into the US legal system.
▶ 2:13:32Foreign link funds are investing in lawsuits against US businesses across almost every sector of the economy for profit. I assume based on your testimony today that you believe we shouldn't allow the abuse of our tax code by organization that characterize themselves as not for profofit when they are more akin to agents of foreign governments. Is that correct?
▶ 2:13:53Would it be fair to assume that you would also be concerned about foreign back for-profit entities abusing our tax code in the pursuit of financing
▶ 2:14:02Yes, foreign financing of litigation is a real problem.
▶ 2:14:06Well, I'm glad uh we also agree on that. Uh one one reason this foreign capital is flooding into our courts is that these litigation financiers are adopting aggressive tax positions. They claim their deals are subject to capital gains rather than ordinary income tax rates. This allows some foreign funders to evade the US tax code entirely.
▶ 2:14:26This is why I'm introduced the TPLF Act along with other half of my over half of my Republican colleagues on the committee to ensure foreign investors pay their fair share and that all for-profit litigation investments are tax at the ordinary rate. As the committee continues to examine these ideas to address these very real concerns, I'm hopeful that we will work to address the tax treatment of both the not for-p profofit and the nonprofit funders of litigation. With that, Mr. Chairman, I yield back. Thank you.
▶ 2:14:56And I recognize Mr. Delbeni for five minutes.
▶ 2:14:59Thank you, Mr. Chairman. Um, and thank you to all our witnesses for your time today. Uh, today's hearing claims to be about foreign influence, but let's be honest, this isn't serious oversight. It's a distraction, a political weapon aimed at silencing voices that disagree with Republicans. And that's not just wrong, it's unconstitutional. While Republicans spend their time manufacturing threats, real national security risks are being ignored.
▶ 2:15:26The president has welcomed foreign interference with open arms, accepting massive gifts, striking secret business deals, and profiting from foreign governments. That's the real danger to our democracy. And yet, my Republican colleagues just turn a blind eye.
▶ 2:15:44Instead of gutting the IRS, illegally firing several inspectors general, and weaponizing laws like Foreign Agents Registration Act against nonprofits, we should be restoring and strengthening enforcement and closing the loopholes that allow corruption. Um, Mr. Weissman, can you explain how Citizens United opened the floodgates for unlimited undisclosed spending in US elections?
▶ 2:16:10and from a national security perspective, how this has had uh how how has this decision created vulnerabilities that foreign actors can exploit through shell companies and 501c4 organizations.
▶ 2:16:24So, Citizens United in 2010 was a landmark decision changing completely the landscape of election financing. It held narrowly that corporations could spend whatever they want to influence election outcomes. It subsequently was expanded to include individuals. So super rich people also could spend whatever they want. What followed since then, but was not required by Citizens United, was a surge in what people called dark money spending.
▶ 2:16:50Secret spending of an unlimited amount going to outside organizations, not directly to candidates to influence election outcomes. We're at $ 1.9 billion in the last election cycle. Because the money is secret, we do not know how much of it is foreign. It should be zero, but we really have no way to know because of many of the kind of financial flows that colleagues on the panel have discussed today. There is an easy solution to this without overturning Citizens United.
▶ 2:17:18By the way, the Congress should overturn Citizens United through a constitutional amendment. There's an easy solution which is the Disclose Act, which would require disclosure of all secret spending and would end affirmatively all foreign financing of US elections.
▶ 2:17:31Disclosure and transparency. Uh you also in your testimony um it it shows that the DOJ scaled back the Foreign Agents Registration Act or Fah Enforcement while simultaneously threatening to weaponize it against disfavored viewpoints. How does this selective approach undermine constitutional protections?
▶ 2:17:53And what does it say about the majority's priorities when they ignore foreign money flowing through dark channels but fixate on silencing domestic critics? Well, I think there is a huge concern about the authoritarianism of this administration and its effort as part of a tapestry of authoritarian actions to clamp down and intimidate critics. In the early stages of the administration, Attorney General Bondi announced we are not going to be enforcing the Foreign Agent Registrations Act.
▶ 2:18:23I think, as I said, it is not unreasonable to wonder whether that's because she herself had been subjected to it and that FBI director Cash Patel possibly should have been subjected to it but did not register under it. In any case, that was the announcement. Months later, we became a new announcement that it would be aggressively enforced in limited circumstances that are plainly designed to punish the president's political The document that established that, the National Security Presidential Memorandum of Seven, is extraordinary in
▶ 2:18:53its scope of defining who it's going to target, allegedly domestic terrorists, but really political enemies, people with so-called extreme ideologies around race, gender, immigration, people who express so-called anti-Christian views. What are the predicates for enforcement? this presidential memorandum would have labeled a terrorist Rosa Parks and Martin Luther King.
▶ 2:19:19Um, and also in your testimony, you highlight that 501c4 dark money vehicles can be used to launder foreign funds into US election affairs influence as you refer to. What are the most common pathways by which foreign money enters through 501c4 organizations? It's very elaborate now sort of channeling money between entities between shell companies limited liability companies into the C4s and then onto super PACs there.
▶ 2:19:45The C4s themselves are spending less now than they did in the early days post Citizens United and really serving as vehicles to funnel money into directly into the super PACs. But again, we really can't trace the money because we don't have disclosure. Totally solvable problem.
▶ 2:19:58We need disclosure and Congress can do that. Thank you so much for your testimony. I yield back. Mr.
▶ 2:20:03Thank you. to now recognize Mrs. Miller for five minutes.
▶ 2:20:06Thank you, Mr. Chairman, and thank you all for coming here today. Wow, I didn't know it would get to be quite like this. And I do think it is such an important issue that we all need to use logic and facts to solve. Miss Southerntherland, the Federal Election Campaign Act is clear. Foreign nationals cannot donate to American political campaigns.
▶ 2:20:34However, your research shows a massive gap in how this is enforced. Foreign nationals can donate to a 501c4 social welfare organization which can then in turn around and fund a super PAC or other political entities. In this scenario, is the taxexempt organization required to disclose the identity of the foreign donor?
▶ 2:20:58And what are the real world consequences of this donor scrubbing on the integrity of our federal elections?
▶ 2:21:06Uh, 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 501c4 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 Hanzorg Vis and bankrolling super PACs.
▶ 2:21:31This happened in 18 the cycle 2020 2022 2024 and it's going to happen again in 2026 if we don't stop this. And the problem is if we've identified is that there is no real requirement that a 501c4 on that form 990 discloses anywhere uh that they are receiving foreign funds. This is a huge threat to foreign interference in our elections and we must close this
▶ 2:21:55Wow. Taxpayer dollars should never go towards things like financing terrorism, supporting illegal activity, or causing major disruptions in Americans everyday lives. Reporting that suggests that some taxpayers are donating to a charitable organization in good faith, only to find out later that that money may have ended up in the hands of designated terrorist organizations.
▶ 2:22:21I think that's terrible to hear that a taxexempt organization that helped fund one of these groups is still active in America today is even worse to any of you all. What should Congress do to ensure that the taxpayer dollars are not being funneled through taxexempt organizations which support things like terrorism in illegal activities? I got two minutes.
▶ 2:22:48Well, I think uh transparency is key. I think some of my colleagues here mentioned uh revising the 990, min modernizing the 990. Um 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. Uh this is a puzzle that's been designed by hostile enemies uh hostile countries. Uh and they basically have uh the digital footprint is proof. Uh the narratives that they're funneling through here are very closely coordinated.
▶ 2:23:18you could hear where they're planting those narratives. Uh 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 non-political 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.
▶ 2:23:46that 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.
▶ 2:24:06Uh I can also add uh 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 uh from ever happening. Uh as you said, it's it's horrible that tax dollars and charitable dollars end up financing terrorism and that's often through the use of fiscal sponsorships.
▶ 2:24:25uh if we strengthen the penalties uh that can be financial penalties that can be uh civil liability penalties uh criminal penalties for the bad actors uh it will deter them from even funneling that money uh to the wrong group in the first place.
▶ 2:24:42Thank you.
▶ 2:24:43Go ahead.
▶ 2:24:44I I would tend to agree what the the co-panelists have said. I used to ask my clients, "Do you look good in dark green or bright orange?" and 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 um using money in an improper way, I think needs to be looked at very seriously. And again, this is I'm not um saying all nonprofits are are doing that knowingly. Uh but I think there there needs to be a revisit of the penalties both civil and criminal in those
▶ 2:25:16Should I yield back? Yes, please.
▶ 2:25:20Okay, sorry. I yield back.
▶ 2:25:22Thank you. I now recognize Miss Chu for five minutes.
▶ 2:25:26Uh Mr. Weisman, you highlighted in your testimony that in order to actually address improper influence in our elections and politics, this committee should be focused on closing the loopholes that allow dark money to flow through 501c4 organizations. One of those loopholes allows wealthy donors holding appreciated assets like corporate stock to donate that property to a 501c4 without paying capital gains tax.
▶ 2:25:56And in fact, in 2022, billionaire conservative donor Barry Seed transferred $1.6 billion dollar in stock to Marble Freedom Trust, a right-wing 501c4 organization. This was the largest political advocacy donation in US history and it was totally tax-free for seed who avoided paying around $400 million in tax liability due to this loophole.
▶ 2:26:24And this kind of dark money influence is only growing. The 2024 federal election cycle saw $1.9 billion in dark money spending, nearly double the amount from the previous cycle. Groups like Building America's Future have used these structures to fund political messaging campaigns and major donors including Elon Musk have helped bankroll such organizations.
▶ 2:26:51If donors in that position choose to contribute appreciated assets, they can do so anonymously and taxfree. And that's why I will be reintroducing my end tax breaks for dark money act with Senator White House, which would apply the same tax treatment to donations of appreciated property made to 501c4, 501c5s, and 501c6 organizations as
▶ 2:27:21already applies to donations to 527 political organizations. So, Mr. Mr. Riceman, from your perspective, how do these tax and disclosure loopholes combine to expand the risk of secret and also foreign influences in our elections? And what are the risks if Congress fails to disclose them?
▶ 2:27:43Well, thank you. We we very much support um the initiative and the new the bill that you will be reintroducing. as you describe it effectively makes donations to 501c4s taxdeductible wrongly and in contravention of the purpose of the tax code. So you are indeed closing a loophole that should be a common sense matter. I think everyone should agree on that. More broadly is this issue of that we've been discussing of secret donations to 501c4s.
▶ 2:28:13There is a balance that needs to be struck about legitimate privacy interests of political of of of donors to taxexempt organizations. But when you enter the electoral space, the balance tips clearly in the need for public disclosure of those donations and the source of those donations. And the answer to this, and perhaps my colleagues agree because I agree exactly with how Miss Sutherland just described it, exactly with how Miss Miller described it.
▶ 2:28:39The answer is the Disclose Act, which would require robust disclosure and would affirmatively end foreign donations that funnel into our Thank you for that. Uh Mr. Weissman, uh Democrats successfully secured $80 billion in historic funding to strengthen IRS enforcement, but since then, Republicans have since clawed back over half of that funding and colossally slashing the IRS workforce.
▶ 2:29:06And in fact, the Trump administration slashed the very division tasked with overseeing the taxexempt status of nonprofits by 25%. So it has been maintained that these cuts did not affect the criminal uh portion of that division. But is that true?
▶ 2:29:30Um, and uh, how do these cuts affect Iris's ability to look at millionaires and billionaires who can cheat our tax system while every day Americans wait hours to spend um to to just speak to a live human being? So, how does this increase foreign
▶ 2:29:54Yeah. Well, I don't want to comment on Mr. Dubinsky's remarks. I think he was trying to make a nuance point, but the main point is very clear. The IRS staff, not only has that money been clawed back, on top of that, IRS staffing in the last year has been cut by 25%. And as you say, also 25% within the taxexempt division.
▶ 2:30:12So, as regards the topic that we're talking about, that means there is less staffing available to do reviews of tax returns from nonprofits and to discover the problems that the panel is all discussing. So, if we care about that, then the administration needs to restore that staffing. The other question you are saying is perhaps even more important, which is the reason that extra funding was supplied, as you know, was prime was to do two things.
▶ 2:30:39to make the service more responsible to regular consumers, but also to give empower them to investigate complex returns of high dollar and corporate tax cheats. That investment pays back about five or more times over. They've lost that money, lost that capacity. That means we're going to see more tax fraud, more tax cheating, more tax avoidance by the rich and large corporations. And the tax revenue of the United States will net go down by at least $200 billion over the next 10 years. Thank you.
▶ 2:31:09I yield back.
▶ 2:31:10Mr. Kustoff is recognized for five
▶ 2:31:13Thank you, Mr. Chairman, and thank you to the witnesses for appearing today. I do want to recognize Chairman Jason Smith, who has really led on this important issue. Since 2023, this committee has worked to not only understand but also address the improper influence and abuse within the United States taxexempt sector.
▶ 2:31:37I don't think there's any doubt and we've heard it from all of you that right now that there are actors who are adversarial to the United States who are exploiting weaknesses in our tax system to move money to support causes that are nefarious and even finance terrorism. And Mr. Walter, that's the one thing I want to talk to you on that last point is financing terrorism.
▶ 2:32:02Can you talk about through your experience and especially maybe since October the 7th of 2023 the attack on Israel by Hamas what pattern or what trends you're seeing in terrorist groups and foreign actors and how they exploit the US tax exempt system.
▶ 2:32:23Thank you for the question. Uh probably the best thing would uh be possibly to enter into the the record our report marching towards violence. Uh but I'll and the highlight of of that report is that we identified approximately 150 groups that were endorsing or supporting Hamas's terrorism uh in variety of ways uh and often of course encouraging domestic terrorism as we've seen in this state in this very capital at Union Station when there was a riot for instance.
▶ 2:32:52Um but the uh the large majority of the groups that we identified uh did have connections to the American nonprofit sector. Many of them of uh were precisely uh handled through fiscal sponsorships uh by places like Westpak. Uh so this is a a sprawling problem uh that deserves serious investigation uh given the gravity of the crimes that are involved.
▶ 2:33:21Thank you. And on that note, I've introduced a bill of the bill numbers The bill would authorize the Treasury Department to revoke the tax exempt status of any organization deemed to have provided material support or resources to a designated terrorist group.
▶ 2:33:41I do want to note that we proposed this bill in the in the last Congress after the October 7th, 2023 And I I do want to also note that it's got a strong legislative record because it was reported out out of this committee with bipartisan support and it's actually passed the House floor twice.
▶ 2:34:02To me, that reflects the broad recognition not only the of the threat but also the importance of protecting Americans from this foreign influence. Can I ask you your opinion if you've had a chance to look at this bill HR6800 and whether it would be effective in preventing these groups from channeling funds to terrorist groups? Uh I think it's fair to say that it certainly would improve the current situation.
▶ 2:34:32Uh and it's a sad fact that the attacks happened at this point almost two years ago. Uh and yet uh we still have not done much in response.
▶ 2:34:42Thank you. Let me ask you, are there any additional measures right now that you think Congress could consider to combat this type of abuse?
▶ 2:34:54Uh well, I think a lot of the reforms that were already mentioned here in uh additional disclosure of foreign funding, um additional disclosure of fiscal sponsorships, uh those are certainly uh part of it.
▶ 2:35:07Thank you. Thank you very much, Mr. Dinsky. If I could with with you looking at Treasury and IRS, do you think there's any additional statutory authority that Congress can give to help the IRS and Treasury track foreign money through nonprofit
▶ 2:35:30It's it's possible. Let me just um backtrack one second. And and the issue of the IRS um it's not just the staffing. You know, there's there's been talk today about the staffing was slashed. Years ago, I had a tax practice. When I uh computerized that practice, I was able to get rid of half my staff and do more tax returns out the door quicker. So, I think the IRS needs to embrace technology, embrace AI.
▶ 2:35:51I think what this committee can do is charge the IRS with developing an AI system to go through this data, restructure the forms, as I said, uh use AI to work more efficiently, not just restore headcount, because headcount just doesn't mean that it's going to work efficiently. So, I do take issue with with some of the comments that have been made about that. Um, as far as additional laws that could be put in place, I'd have to think more about
▶ 2:36:14Thank you very much. Thank you to the witnesses and I'll yield back.
▶ 2:36:18Miss Moore.
▶ 2:36:20Thank you so much, Mr. Chairman, and thank the panel for uh coming to today to talk about this very important topic. I think uh one of the witnesses said that a through line uh of this hearing was that you all agreed that foreign money should be kept out of mo of American politics. But if that were the topic of this hearing, I would be delighted to do that.
▶ 2:36:46But you have selectively chosen to focus the witnesses that I have before me to focus on uh those groups that somehow the Republican party seems to disagree with. Um, I I was struck.
▶ 2:37:05I'm you know, when I came in here, I had to look up the first amendment to the constitution to remind myself of the rights to which we're all um uh entitled to. And it occurred to me that we are strategically dismantling democracy here.
▶ 2:37:28I heard you all complain mightily about freedom of speech here Mightily um about complaining about uh you know environmental groups that want us to eat less meat and of course the Republican party which has been infamously denying climate change.
▶ 2:37:49um you know all kind of groups that are funded to talk about the impact of fossil fuels on our environment is um in the crosshairs of your studies and complaints here today. Um and I am just wondering no free press you talk about uh code pink very irritating group to some people.
▶ 2:38:16Uh but of course they are protesting war protesting aggressions and they have a constitutional right to do that whether we agree with them or not. Those safeguards are built into our constitution. the first amendment to the constitution. And sir, I forget which one of you gentlemen talked about your teenage daughter being afraid for she'll be just fine.
▶ 2:38:44America was built on teenage daughters standing up for justice and protesting in this country. Now, you guys want me to stay keep the main thing, the main thing, and talk about what we're talking about here today and not talk about CZ and the money laundering and the fact that 87% of Trump's stable coin is held by him and his pardon. Um, you all don't want me to talk about that.
▶ 2:39:13So, let's talk about another 501c3, Heritage Foundation. Um, Mr. Weissman. The Heritage Foundation has received funding from many foreign corporations to my knowledge. Some of the stuff we agree with and some that we don't. Um why what what is the impact of having you know cherrypicking through?
▶ 2:39:40How how do we get to ending abuse of 501c3s if we're just going to cherrypick through them? Well, I I appreciate your remarks, Miss Moore, and the answer is of course that we can't. And what's worrisome is that there are legitimate and important policy issues here about which there may actually be some reasonable agreement on the panel, but the conversation is focused on viewpoint. And it's a problem when that is happening on the panel.
▶ 2:40:07It's a problem when the committee is focusing on viewpoint rather than on the broad issues. But it's the most severe problem when the president of the United States is threatening organizations based on their viewpoint as he has done.
▶ 2:40:21And by the way, Mr. Weissmith, can the president do an executive order uh and really uh eliminate our ability of 501c3s to lose their tax exempt status?
▶ 2:40:35Well, he should not be able to do that. But if he orders the IRS to selectively persecute and prosecute organizations, I assume that they're going to do it. And I am deeply worried about that.
▶ 2:40:46I'm deeply worried about it from the perspective of our constitutional uh structure. I just want to recall, I'm surprised that I see we got one of the Selma sisters here today. She was born in Selma, Alabama. And u my time is about to expire. I'm going to ask her to recall if she can.
▶ 2:41:06She's a very young person, but I I recall Alabama, her home state, trying to ban the NAACP, getting them to lose their uh 501c3 because they have consistently since its inception, the NAACP, a respected has fought for civil rights, fought against discrimination in education, in housing.
▶ 2:41:35Uh, and it's a revered organization that deserves this 501c3 status. I'm sorry, Mr. Chairman, my time is expired. I thank all of you, all of our witnesses.
▶ 2:41:46Mr. Fitzpatrick.
▶ 2:41:48Thank you, Chairman Smith, for yielding and for holding this hearing today. taxexempt nonprofits who are acting as fiscal sponsors of groups interfering with our elections and institutions harboring terrorist sympathizers and fueling anti-semitism must be investigated and held accountable. The House of Representatives has long maintained a transparency standard.
▶ 2:42:09To receive press credentials in this institution, a new news organization, even a nonprofit, must demonstrate that it is operated independent uh independently of any government institution or lobbying group. The goal of this policy is simple. To ensure that those with special access to this building are not merely fronts for hidden or corrupted interests. We see a starkly different standard for the nonprofit sector at large.
▶ 2:42:36An organization can spend millions of dollars to influence the outcome of an election while being managed by individuals who may have undisclosed ties to foreign entities or foreign governments. Um, Miss Sutherland, we'll start with you. Uh, first, your perspective of um, why the House would recognize that undisclosed funding is a vehicle for hidden influence when it comes to journalists and credentiing journalists, but yet we ignore that same risk when it comes to nonprofits who are engaged in political advocacy.
▶ 2:43:05And second, um, should the anti-front group logic be the baseline for how the IRS vets the operational independence of all taxexempt
▶ 2:43:15Uh, thank you for that question. I think the theme here is that we all agree that there can be more transparency when it comes to foreign donations. Uh, and you make a great point uh, as far as we want to make sure uh, that our press corps is not a hidden front group for malign foreign inter uh, interference. We want to make sure that someone with the press credentials is not just serving the mouthpiece of the CCP. And I think the same can be said for our nonprofit sector.
▶ 2:43:41We want to make sure that our nonprofits are not merely front groups uh for foreign governments, foreign charities, and foreign nationals. I I think at a minimum that would certainly be a violation of of FAR. uh but I think we can go further as we've identified uh some really good solutions uh to prevent foreign donations ending up in the advocacy sector.
▶ 2:44:03Thank you. I now want to move on to discuss the role of uh social media efforts to spread um malign influence uh by foreign actors. Uh Mr. junior organization NCRI has been able to map how Russian troll farms and bot networks don't just post content. They actually game out social media algorithms to manufacture a false sense uh of viral consensus around a topic or an entity or an individual.
▶ 2:44:30Uh your research notes that for a foreign narrative to take root, it often requires a bridge into domestic institutions. We are increasingly seeing evidence of foreign state actors including Russian proxies using US taxexempt organizations to fund so-called digital advocacy that mirrors our own geopolitical goals. Uh Mr.
▶ 2:44:51Sun, from a data science perspective, can you share with us how um foreign funded nonprofits serve as laundering mechanisms specifically for the Russian style bot operations?
▶ 2:45:06Thank you. Well, we see this uh over and over again. Um groups like Code Pink or the Answer Coalition are key examples where they show up repeatedly in records from the Iranian state media as top US contacts. And that's not a coincidence. That's an ongoing relationship. They travel to Iran, they meet with regime officials, they come back, and then they run digital campaigns promoting across social media that Americans need to lift sanctions and stand down. Every time they do it, they get more funding, they get more media, and more amplification online.
▶ 2:45:34And that was my point earlier about not needing spies anymore. This is being done in the open using our own systems. And Americans need to recognize that when they see these um uh protests that that happen in a matter of hours, uh we mentioned Selma and other really important moments in American history. Um it takes uh days, weeks, months for people to figure out how to get a 100,000 people into a certain area or even 500 people in some cases.
▶ 2:46:00But here with social media, when you have these uh uh uh uh nonprofits that are doing the bidding of a foreign regime, they could be uh uh galvanized in a matter of hours to show up at a location. And that overwhelms emergency services. Emergency services are not designed to respond to that type uh of of a galvanizing of protesters. They expect protests to grow organically and slowly over the course of a day. uh not uh have 10,000 people show up somewhere with just a touch of a button through a few social media accounts.
▶ 2:46:30So when you think about the national security threat, imagine a a foreign hostile regime was planning an attack somewhere in the United States. these nonprofits that are doing the bidding unwittingly a day like where there might be an attack will deploy all of these uh groups uh where will be blocking bridges, blocking hospitals, blocking critical infrastructure and then if an attack would happen uh it would be a different type of a threat that this country hasn't seen before.
▶ 2:46:57So, I do think it's important that we look past the politics and recognize that this is a a digital uh laundering operation that can galvanize at a scale that we've never seen before Americans to show up uh and and put uh themselves and others in harm's way uh unwittingly.
▶ 2:47:15Thank you all for your testimony today. I yield back.
▶ 2:47:17Thank you, Mr. Arrington.
▶ 2:47:19Thank you, Mr. Chairman, Ranking Member Moore, um, and our panelist. The lack of transparency surrounding these nonprofits, specifically 501c4s and their uh, foreign nationals ability to indirectly influence elections is uh, disconcerting to say the least. Mr. W, Mr. Walter, just a yes or no question.
▶ 2:47:49Are FEC regulated packs and super PACs required to disclose their uh direct donations and the donors?
▶ 2:48:01Mr. S. Yes or no. Can foreign nationals directly donate to packs and super PACs?
▶ 2:48:10I'm not as familiar with that topic given my expertise and why I'm here, but
▶ 2:48:13Anyone want to take that question? Miss
▶ 2:48:16No. So foreign nationals are prohibited from directly or indirectly contributing to candidates packs, super PACs.
▶ 2:48:21Okay. So US citizens can, they disclose, foreign nationals can't. Period. Now, Miss Southerntherland, we'll just stay with you. You seem to have the answers here. Um, yes or no. Are foreign nationals able to donate to 501c3s and 501c4s? And um so so let me ask everybody this question. Is this a loophole?
▶ 2:48:51When a can take the money from a foreign national, US citizens have the right to exercise freedom of speech and association, but they disclose it in the light of day. And then we leave the back door open for foreign national. This isn't a partisan issue. I don't care what the cause is, but they're able to influence political causes and candidates in the dark of night. Is is am I reading that right?
▶ 2:49:21I'd call that a loophole. How would you describe that?
▶ 2:49:24No, that that's absolutely correct. And what we have here is that it comes down to how we define elections. Foreign nationals are prohibited from directly or indirectly influencing our elections. That means candidates, packs, super PACs, and participating in your campaign's decision-making process. Um, but all those other electoral tools that matter up to and including on election day, the issue advocacy campaigns, the nonpartisan GOTV, voter registration, because those are not technically elections, a foreign national can finance them.
▶ 2:49:54So, the solution isn't to change the definition of what is and is not as an election, but to expand the prohibition of what can and cannot be financed with foreign dollars. Uh because what we have here is that if there's a television advertisement, that's not saying vote yes, vote no. Can't use foreign dollars for that. Um but if you're saying that uh look at look how great uh Senator So and so did uh on this bill, call him and tell him a good job.
▶ 2:50:22That issue advocacy television advertisement can and is being paid for with foreign dollars.
▶ 2:50:29Mr. Weissman, do you agree with that?
▶ 2:50:32That there's a loophole and that There are some details where I disagree with but with what you said I 100% do agree. I think you're exactly right and the solution to that is the disclosure act and the only thing I would amend your
▶ 2:50:45It is most serious for sure with foreign nationals coming in. It is not true that all Americans are disclosing their money. Most of the secret spending by far is coming from Americans who are not disclosing and using these vehicles
▶ 2:50:56And I don't like that either. So maybe we are in agreement.
▶ 2:50:58Here we are. Democrat witness um Republican from West Texas in complete agreement on that. I mean,
▶ 2:51:07we got we we all have to be there on on transparency. We just have to um and there's more work you're saying on the US citizen side, but we all agree on this backdoor foreign national influence. I think we look when we have this sweet spot and we're coalescing as a body both Republican and Democrat, we ought to act uh and execute uh with urgency.
▶ 2:51:31Uh Miss Gwen Moore is a a good friend, happens to be a Democrat and she's shaking her head uh up and down. Do you want to comment my remaining 40
▶ 2:51:43Thank you, Miss Arrington. And again, I just want to just reiterate the through line is that none of us want to see foreign influence particularly in our And if we're going to be monitoring contributions to 501c3s and C4s, it ought to be number one, we ought not hobble the IRS in its duty to do that by cutting out, you know, 25% of their workforce
▶ 2:52:13that examines tax exempt things. Should I yield back?
▶ 2:52:17Yes, but my time's expired. Mr. Chairman, thank you for your leadership on this. I look forward to to to fixing this gaping hole.
▶ 2:52:24Thank you, Miss Soul.
▶ 2:52:26Thank you, Mr. Chairman. I'd like to thank our witnesses for testifying today. As a ranking member of the oversight subcommittee, I agree that foreign influence in our democracy requires aggressive oversight. Unfortunately, Republicans have chosen to use this hearing to go after nonprofit organizations that don't support President Trump's radical agenda.
▶ 2:52:48Meanwhile, this committee has done nothing to address the many cases of foreign national illegal funding, millions of dollars into GOP super PACs and far-right think tanks like uh the Heritage Foundation. As we are here today talking about nonprofit organizations, President Trump is continuing to operate the most corrupt White House in our nation's history. My constituents in Alabama continue to face an affordability crisis due to Trump's inflation.
▶ 2:53:19Meanwhile, the Trump family has made almost $4 billion in the last year by leveraging the power of the presidency to enrich themselves. My question to my Republican colleagues is this. Why have we done nothing uh on a hearing of Trump's personal profit from overseas licensing agreements?
▶ 2:53:40We know that Trump put tariffs on Vietnam and then conveniently reduced those tariffs when Vietnamese officials fast-tracked approval of a new Trump golf course outside of Hanoi. Where was the oversight? Why have we not had a hearing on President Trump's deal to accept a $400 million jet from Qatar, which he is trying to keep once he's out of office?
▶ 2:54:06Why is this committee not providing oversight over Trump's crypto dealings? It has been widely reported that President Trump and his business partners have set up a crypto scheme that allows foreigners to buy the Trump family's crypto coins in order to influence federal policy. For example, Reuters reported last summer that a United Arab Emirates investment firm announced a $2 billion investment in Trump's cryptocurrency.
▶ 2:54:36Two weeks later, the the White House magically gave the UAE access to hundreds of thousands of the most advanced computer chips. President Trump has proven time and time again that he will prioritize his own wealth over the interests of the United States and the American people. Mr. Weissman, in your testimony, you talked about President Trump's foreign dealings.
▶ 2:55:02Whether or not Trump's actions violate the uh Constitution's imulma clause, they absolutely they absolutely violate the spirit of the Constitution. What reforms should Congress consider to ensure that no future executive uses the office of the president to personally make billions of dollars while poor constituents in rural communities like mine are literally are literally barely able to
▶ 2:55:32afford food and medicine.
▶ 2:55:35Thank you for your question. I think it's important to underscore what you said. The the enrichment the self-enrichment is unseammly. That's not the biggest issue. The biggest issue is foreign governments and domestic government and domestic corporations are spending money to influence the president. Again, we don't have to conjure some indirect process in a magical mystery of conspiracy. It's happening in front of our eyes. They're making direct payments.
▶ 2:56:02And there's every reason to think that identifiable decisions are going the other way because foreign governments have channelneled money to the president and his family.
▶ 2:56:11Yeah. you know, um, our oversight duties. I mean, we are accountable to the American people and we should be having oversight hearings about just this foreign influence by our president. Um, for any of the witnesses, um, how about you, Mr. Walter? This question is to all of you, but uh, according to our according to your testimony today, you all have said that taking foreign influence in our democracy is very serious.
▶ 2:56:39Therefore, I am giving you the opportunity right now to condemn President Trump's willingness to accept funds from foreign interests. Will any of you go on the record and condemn any of the actions that I have just mentioned? Any of you, Mr. Walter?
▶ 2:56:53Uh I'm sorry, but uh I can't say that I have studied those and I didn't understand that this hearing was going to involve uh inaugural committee contributions rather than nonprof.
▶ 2:57:04Uh thank you for that question. Same answer. I've been prepped to talk about foreign influence in the nonprofit
▶ 2:57:09Mr. Song,
▶ 2:57:11I think there's some hope to what you're saying in the sense that this Congress and the executive branch work together to rid Tik Tok of uh exercising foreign influence. My organization actually identified it is in the DOJ documents. Our organization is identifying
▶ 2:57:25I take that as a no. Uh our last witness or next to the last witness.
▶ 2:57:31Look, I'm a forensic accountant. I'm not a politician. And from the standpoint of
▶ 2:57:35Okay. cleaning it up on both sides. I think American the American people want to see things cleaned up on both sides of the aisle.
▶ 2:57:41Uh Mr. Weissman,
▶ 2:57:43yes, of course. I I do condemn that and I think it's a strange thing to say you're an expert on foreign influence channeled through a particular means when your underlying concern is foreign influence and we are seeing the most blatant in American history, foreign influence over our eyes.
▶ 2:58:01Uh with that, uh Mr. Chairman, I just wanted or Mr. Chairman, I wanted to just reiterate how important our oversight responsibilities are and I look forward to working with all of you in making sure that we bring this to light.
▶ 2:58:13Thank you. The gentleman from Florida, Mr. Stie, is now recognized for 5
▶ 2:58:17Thank you, Madam Chairman. Mr. Dinsky, in your opening testimony, you stated that the transparency deficit in our current system is being fueled by the growing use of donor adise funds, which effectively strip the identity of the original donor away before the money reaches the recipient. You described these anonymous grants and fiscal sponsorships as vulnerabilities that allow money to flow with almost no public visibility.
▶ 2:58:38Most importantly, you shared your professional judgment that a practical and cost-effective remedy would be to modernize form 990 with standardized questions to generate structured data for the IRS. Mr. Mr. Dinsky, based on your 40 years of unmasking the labyrinth of shell companies and offshore schemes, how would this shift to structured data allow investigators to use AI to flag foreign influence in a way that current paperbased honor system cannot?
▶ 2:59:03Very easily. The use of AI looks at at both structured and unstructured data. It can look at at uh typologies. It can look at the footprint. It can look at a vast amount of information very quickly across, you know, a universe of information. the human can't just simply can't do that. When we launch an investigation, it takes a lot of manpower uh to lay eyes on documents and start tracing things. Properly developed AI systems can make that cut that way, way down. So, that's why I said it's not a matter of the headcount at the IRS.
▶ 2:59:31It's a matter of working smarter, more efficiently, using technology as your
▶ 2:59:36How how common is donor adise fund to donor advice fund or multi-animator routing? And does that materially frustrate oversight? It it does because once the the money goes into a donor advised fund, it can sit there for several years till a request for a grant is made and the the request comes in the donor advised fund will will either honor it or not, but most of the time they'll honor it. It goes to another DAV. It could. And so it it's layering and masks the identity uh over many many years.
▶ 3:00:03So trying to trace that becomes very very difficult.
▶ 3:00:06And in the donor advised fund context, where does screening actually fail most often? donor source, sponsor intake, downstream grantee, or what's the consequence when it fails?
▶ 3:00:17I I think on the donor intake mainly um because if the you know it's like the AML laundering, if you only know the first layer in it and you don't know who's behind the layer, that's all you can look at. So if if the donor looks legitimate, but you don't know where that donor got the money, that becomes an issue,
▶ 3:00:34right? Uh Mr. So Walter, what about donor advised funds make them attractive to influence campaigns, insulation, anonymity, plausibility, deniability? What would you say?
▶ 3:00:45Uh well, of course, all of those things. I mean, again, donor advised funds were created to help encourage uh good charity in America. Uh but they are easily abused by bad actors.
▶ 3:00:55So this is like a structural vulnerability in our charitable system. Would you agree with that?
▶ 3:01:00Uh it is. Yes. Uh, Miss Sutherland, how often are DAFFs used as a cutout to fund policy fights in ways that prevent the public from connecting the founder to the outcome?
▶ 3:01:11Uh, thank you for that question. Uh, I think that it can happen uh quite frequently. Uh, in fact, uh, just last night, uh, Gabe Kaminsky of the Free Press, uh, published an article identifying how almost $40 million was funneled through, uh, a a DAFF and ended up into a 501c4, uh, that ended up supporting Kla Harris's campaign.
▶ 3:01:33Do you see donors loading money into DAFFs in election years for deductions, then deploying grants later to avoid scrutiny and timing accountability? Uh I would unable I'm unable to speak to the specifics of the money moving in moving out. Uh but we are able to identify that DAPs can be conduits for foreign influence. Rockefeller philanthropy adviserss a large donor advised fund uh does receive hundreds of millions of dollars in foreign funds.
▶ 3:01:58If Congress increases inflows to DAFFs without fixing the guard rails, aren't we just expanding the size of the black
▶ 3:02:06Uh certainly. Uh but I will care caution that when we discuss donor advice funds um that we must do it narrowly uh to maintain the privacy protections of donors who are rightfully using those wonderful charitable vehicles. Unfortunately through the theme of this hearing we are hearing that too many foreign bad actors are co-opting our charitable uh sector.
▶ 3:02:29So what guard rails do you think we should do first? Uh I think certainly uh taking a look at the flow of foreign dollars into DAS uh as Mr. Dinsky uh pointed out it definitely gets shuffled around and comes out the other side. Uh foreign money flowing into any uh nonprofit sector that ends up in advocacy should be Congress's first step to fix.
▶ 3:02:51Thank you. I yield back.
▶ 3:02:57I now recognize the gentleman from Pennsylvania, Congressman Smucker, for five minutes. Thank you, Madam Chair. Thanks uh thank you for holding uh this hearing. Um Mr. water. I'd like to um talk briefly about the fiscal sponsorship structures which I think you mentioned um in your testimony and there was a recent Wall Street Journal op-ed by Tao Ford Gang of the Manhattan Institute that I think explained very well how
▶ 3:03:27the structure uh works and how it's in some cases allowed uh bad actors to raise money through taxdeductible uh donations. And I I think I want to say I want to see if you agree. Um they're often used for legitimate purposes to help new nonprofits sort of get off the ground, if you will.
▶ 3:03:48Um the but it also can allow um a non-exempt entity to maintain limited public disclosure, which is really what uh I'm working to get at with a bill I'm uh working on. So do you agree with uh that Yes, Congressman.
▶ 3:04:06Yeah. Based on your uh research, is there an example uh for those listening that you could point to um that would exemplify that gap in transparency?
▶ 3:04:18Uh well, uh one one of the most egregious uh examples of of the abuse here uh would be a fiscal sponsor that was helping Samadun uh which is tied to terrorism. Uh I believe it was the Biden administration as Treasury Department that uh that designated them in that
▶ 3:04:38Thank you. Um are are nonprofits currently required to disclose fiscal sponsorship activity on their annual tax
▶ 3:04:46Uh I think I would call it best practices. Uh so it sometimes happens but it is not required by anything.
▶ 3:04:52Yeah, my understanding is it's not required but as you said they can choose folks can obviously choose to do that. Um, so as we're considering reforms um to the form 990, the tax form, what basic information would you suggest uh would help the public better understand how taxdeductible donations uh flow through these arrangements? You have any
▶ 3:05:17Certainly. The uh one simple thing would be uh requiring that sponsored projects be named uh on the 990. uh perhaps the basic budget of revenues, expenses, assets. Um you certainly could also designate a person as the principal officer for for the fiscally sponsored project. Um the dates of when the sponsorship began, when it ended, uh um yes or no to whether it received foreign funding.
▶ 3:05:46Um and uh yes or no to whether the fiscally sponsored project uh applied for its own independent uh taxexempt status. Yeah. Uh, all great suggest suggestions. It's literally it's all about the transparency of so anyone reading that could understand the uh arrangement where those dollars are going. So, um, thank you.
▶ 3:06:07Your testimony makes clear that if an organization offers donors a charitable tax deduction, it should expect to face the equivalent level of accountability. Um, so we're going to continue to work on uh this legislation. We hope to be able to introduce this and then have it pass out of the committee and hopefully get passed into law. I think it would protect We want to ensure that we protect legitimate charitable work but also close the door to uh potential abuse. So, thank you. Thank you, Mr. Chairman. I yield back.
▶ 3:06:37Madam Chairman, I yield back.
▶ 3:06:38Thank you very much. The chair now recognizes Mr. Byer from the great state of Virginia for five minutes.
▶ 3:06:43Madam Chair, thank you very much. And ranking member Horser, I appreciate this. Um, let me first just ask a rhetorical question and quote Miss Sutherland who said, "News networks should not be propaganda machines." I totally agree, but from the Democratic left, I wonder if that would include Sinclair Broadcasting or Perry Whites of CBS. That's a rhetorical question. I don't need an answer. Um, I'd like to quote Scott Walter. Mr. Walter, you said, uh, we possess near universal agreement that foreigners and foreign money should not meddle in our politics.
▶ 3:07:14to ignore this overwhelming democratic consensus against foreign meddling is to suppress our democracy. I hardily agree with you and I think there's a lot to learn from this and for example 990 reform um I'd love to be participating in that. We don't want foreigners affecting our elections. Um but I think I want you to share my horror at the amount of dark money that poured into seven battleground states at the end. Billions of dollars. We have no idea where it came from and can't determine where it came from.
▶ 3:07:43Um, or I think it's the nth's hypocrisy to be concerned about complaining about American nonprofits without discressing the unbelievable corruption of this Trump administration. Sparked by a president who seemingly put a for sale sign out the White House. So any foreign country individual with business for the US government, he can buy billions of dollars with the president's cryptocurrency in exchange for access to advanced American AI chips.
▶ 3:08:10You can strike deals with the Trump Organization to develop hotels, casinos, golf clubs in exchange for advanced military aircraft or relief from US tariffs. You can get $2 billion into Jared's investment fund in return for other favors. People have mentioned the jets over and over again. the degree to which this president has enriched himself and his family at the American people's at the and open the door for wealthy foreigners to influence US policy directly.
▶ 3:08:41You complain about the people investing in the Sierra Club or the League of Conservation Voters or the Center for Biological Diversity, they just skip it. They go right to the policy itself. They don't skip the elections. The only thing that's concerning about the rank corruption though is my Republican friends whom I admire and like who've been where are you? Why have you been completely silent about the sale of our government to foreign officials? Mr.
▶ 3:09:08Weissman, you talk about how this administration's worked to undermine our laws. Have you ever seen anything in American history, Democratic or Republican presidents like this?
▶ 3:09:18What do we do? What's the cumulative effect of the attacks on the IRS firing all the inspector generals, the DOJ public integrity not enforcing FAR? The overall effect is that the government is putting its hands up. We're not going to enforce the rules against foreign influence. Full stop. Except not full stop because there's one exception. We'll use those rules weaponized against our political enemies. We're getting the worst of both worlds.
▶ 3:09:48And and that's the thing that really concerns me too. I I would love to work with my Republican friends on dialing down on the many apparent abuses that come from the majority's witnesses. But I think we can only do it handinand with the abrupt the obvious corruption that's coming with right on top. And we sort of normalize with the American people that this is what we expect. You know, hund00 million here, $2 million there. Um, Mr.
▶ 3:10:19Weissman, how long will it take to rebuild this infrastructure? And what will we do about the desensitization of the American public to these kinds of cash flows? We're going to need to rebuild very quickly. It is going to be a monumental challenge. The IRS is a good example. Maybe one of the easier ones to do, but the widespread destruction of the government. Obviously, it's going to take a lot to get convince people to come back in when they no longer think that the job is safe and secure. But the point you make about the values perhaps is even more difficult.
▶ 3:10:49There is a worry that we are sliding into an into a view where Americans just have no trust in the government no matter what. Assume everybody is a crook and don't care. That is a ticket to authoritarianism. If people give up because everybody's a crook and the authoritarians get control. Massive challenge facing our nation going forward.
▶ 3:11:10Yeah. Thank you. We continue to try to fight to get a bill here that would prohibit members of Congress from trading stocks. Um, I don't think hardly anybody here would ever use inside information. There'd be a handful of things, but more importantly is that we we be the role models. We be above um suspicion. People don't think we will use our office for our personal gain. When we see it on such a broad scale, it's very discouraging.
▶ 3:11:36And with that, Mr. Chairman, I yield back. Madam Chair,
▶ 3:11:39I now recognize Miss Tiny from the great state of New York.
▶ 3:11:42Uh, thank you, Madam Chair. And I want to say thank you to the witnesses uh for being here to talk about the issue of the day, which is the growing issue issue that is concerning our nation's advers adversaries seeking malign influence into our public discourse through taxexempt nonprofit organizations, opaque nonprofit structures, and fiscal sponsorships uh which enable foreign adversaries to obtain dark influence on the unwitting public in most cases.
▶ 3:12:08and our election systems while evading IRS disclosure, oversight, and public accountability. And as uh Mr. Scott Walter from the Capital Research Center said, the line between philanthropy and politics has been obliterated. So, thank you for that great line in your testimony today.
▶ 3:12:24Um, in recent years, we've witnessed a sharp escalation of anti-semitic incidents on American campuses, including harassment, intimidation, disruption, and rhetoric um that increasingly justifies or glorifies violence against our Jewish students. These incidents are not isolated. They're all over upstate New York in my district where I live. And uh they are coordinated, they'reworked, they're wellunded, and we lack the enforcement rules necessary to know who's really behind these.
▶ 3:12:51It's also been exposed that these groups seek to disrupt and influence our election systems by proposing ballot initiatives at local and state levels using these nonprofits as cover within the United States. Elections are the cornerstone of our constitutional republic. I established the election integrity caucus to promote transparency, which we need to have here, and accountability. And we thank all the witnesses for talking about this.
▶ 3:13:14Uh but it seems that whenever we attempt to bring transparency to these issues, whether it's election integrity or the funding of campus hate or our colleagues across the aisle always pivot to the partisan politics and the theatrics of lawfare rather than working on a bipartisan basis, though I saw a little breakthrough today uh with Mr. Arrington.
▶ 3:13:34But we do have credible data-driven research that shows that campuses receiving non-transparent funding experience higher levels of anti-semitic incidents and suppression of speech which has documented was documented recently uh by our colleagues on the House Education and Workforce Committee in their October 24 2024 report. When many flows are are hidden, we cannot rule out foreign influence and that's where we want to get to especially when messaging timing and tactics are coordinated across campuses.
▶ 3:14:03Um, this isn't a question of protected speech. It's a question of who is financing and coordinating this activity under the protection of US law and whether existing IRS rules and campus oversight are adequate to counter malign influence orchestrated by our nation's en enemies against Jewish students and others. Um, as an example, and I want to address this, my first question I want to address to Mr. Walter, but I just want to give an example.
▶ 3:14:28In my home state, a 501c3 called Westchester Peace Action Committee Foundation functions as a fiscal sponsor for multiple activist groups operating on college campuses that individually, it's known as Westpak, by the way, uh that individually lack nonprofit status, lack independent financial reporting, and are not subject to meaningful transparency requirements.
▶ 3:14:49Through fiscal sponsorship, Westpak enables anonymous taxdeduct deductible donations to flow to organizations that engage in campus agitation, political pressure campaigns, and rhetoric that many universities themselves uh describe the universities themselves describe as destabilizing or threatening towards their students and faculty. Uh for Mr.
▶ 3:15:12Walter, I just want to ask you in your dark money ecosystem, you high in your testimony, uh, the dark money ecosystem highlights a disturbing trend where nonprofits essentially lend out to their tax exempt organizations. Can you explain to me a little bit about what we can do to solve this issue with Westpak? I only have a minute left, but um, you you have been a leader on this with your organization. Uh, tell us how we can do this legally, you know, um, legislatively to to correct this. And I think you mentioned a few ideas, but I'd like to hear them.
▶ 3:15:41Uh well, as I said, the Westpak operates by fiscal sponsorships and the groups that you're com uh complaining about rightly uh are fiscally sponsored projects. So, uh at a bare minimum, more transparency about fiscal sponsorship uh would be valuable and it's not currently in the law. I will say that the more you and uh this committee do to expose what's going on here, shame sometimes works.
▶ 3:16:06uh the at least one of the worst groups at Westpak uh I believe has left them as a fiscal sponsor. Now they just found another fiscal sponsor, but uh shame did
▶ 3:16:16Yeah. And al obviously you've been pivotable pivotal in exposing the the whole Zuckerbucks phenomenon that we talked about in the past with election integrity. Um you've testified that the and extensively on our NZ Zuckerbucks act which uh seeks to restore election integrity by banning the private takeover of public democratic process. Would you think this same type of 990 disclosure you just discussed with the Samadune would actually help with uh businesses or operations like Westpak?
▶ 3:16:43Uh it would certainly make some uh be some help. Yes.
▶ 3:16:46Thank you. I my time is expired. I yield back. Thank you.
▶ 3:16:49Thank you. I now recognize Miss Fishbach from the great state of Minnesota for five minutes.
▶ 3:16:53Thank you, Madam Chair. And Mr. Walter, we're not going to leave that topic because um I appreciate that uh Miss Tenny brought it up and I was just kind of and and first I would just ask was there anything that you didn't get to say that you wanted to respond to Miss Tenny with because you know we we are challenged by the clock sometimes. So I just wanted to make sure
▶ 3:17:12I appreciate that but but no thank you.
▶ 3:17:14Okay. All right. And well, I was kind of um as she was talking, I was thinking of the um who's ultimately responsible. Uh I mean, as the this kind of this lending thing is going on um if they are if they're engaging in prohibitive prohibited political activity or they are receiving some kind of illegal funds, who ultimately is responsible or is it just kind of glossed over?
▶ 3:17:38Uh well, I believe in law all the parties would be, you know, both the sponsor and the sponsores. uh are all going to share uh uh the legal responsibility for what's going on. Uh I'm I'm confident that lots of the sponsors would try to pretend, oh, what do we know? And the rest and and in fact, they may not have known very clearly. Uh but there's a lot, I think, of winks and nods going on like, oh, I don't know what you guys may be doing at the college campus next week.
▶ 3:18:06Okay. Well, thank you very much. And do you do you feel like it is I mean I I you didn't speak about any specific cases but do you feel like that the prevalence is just wink nod oh we don't know what you're doing I mean there's nothing prosecuted there's none of the transparency is there so we really can't get at it would that be a correct
▶ 3:18:28well uh the part of the trouble is that um if you were trying to do something criminally um you would have to uh prove all the things required under the criminal law for consp conspiracy uh and one of the things is actually knowing clearly what's going to happen. And obviously I suspect some of the bad actors are very careful not to know uh what's going to happen.
▶ 3:18:48So being able to just eliminate that kind of um relationship would be far more effective than
▶ 3:18:56uh well certainly exposing it. Now again in the case of in the case of of groups that we know if a group is constantly organizing demonstrations that get wildly out of hand and become illegal, uh I think it would be reasonable for there to be serious investigations to see who knew what when.
▶ 3:19:13Thank you very much. And I would like to just shift just a little bit um on the 990s. I know there's been a lot of discussion about them. So, um, if there's someone who wants to jump in, but my concern was, um, the the nonprofits, uh, obviously the 990s do not do what they need to be doing, but they don't require organizations who are involved in immigrant resettlement to report the number of individuals they assist, um, particularly when those activities occur through fiscal sponsorship.
▶ 3:19:43And so, um, I'm wondering, um, would that be a legitimate kind of I I think it would be very transparent and very helpful to have that on the 990. So, is, um, anybody, um, you know, providing that oversight or I know that there's been some discussion. I'm kind of throwing it out there. There's not a real there's not a specific question, but I'm kind of throwing it out there if anyone else has any thoughts on it. Uh well, I would just say quickly that um the 990 calls for you to to give your program accomplishments.
▶ 3:20:13Uh requesting spe more specificity in terms of the numbers of persons served uh would be reasonable. That certainly appears on many 990s because people want to brag about their numbers.
▶ 3:20:26Like to build on that. So we we at the NCRI, we look at what an organization says it does in its mission and then we also do digital mapping to see what they're actually doing in the real world. So let's take the example of care California again where they received an enormous amount of money. I think it was 7 million in to provide this Afghan refugee immigration service to help them resettle.
▶ 3:20:48Um so we once we've identified that uh they had been promoting their immigration services quite uh robustly and then they get the money from the taxpayers. As soon as they got the money, we did a digital mapping to try to figure out uh are they promoting these services more now that they received all this money. And when we looked at their website, their social media, uh they were actually they dropped their promotion of those services by more than 50%.
▶ 3:21:12So if you just received millions of dollars from the American taxpayer to provide services for immigration, why did you drop your marketing of those services by more than 50%. So what you say and what you do are two different things. And that's not the IRS's role really. I mean, they're looking at tax compliance. So to be able to identify uh narrative analysis to be able to uh do digital mapping I don't know where that falls within the federal government.
▶ 3:21:35So I do think there needs to be some uh uh infrastructure that's either additive to the IRS or somewhere else in the federal government to identify that. Again this shouldn't be political because there are digital footprints attached to all of this. Thank you.
▶ 3:21:49Thank you very much. And it looks like I have four seconds left. So I'm yielding all that back.
▶ 3:21:54Thank you. The chair now recognizes Mr. Petta from the state of California for 5
▶ 3:21:58Thank you, Madam Chair. Gentleman, lady, thank you very much. And Mr. Walter, I'm sorry you're leaving. No, I'm kidding. Go ahead. Go ahead. Even though you were late, but that's a whole another issue. Um, no, look, I I uh I don't I'm not going to ask you any questions. I just got a couple of statements to make to be frank. And um coming into this uh I wasn't too excited for this hearing. I think there's other areas that we can be working on. However, listening to all of your testimony on all sides of this, um you guys have been very impressive.
▶ 3:22:29Uh and I really appreciate your expertise quite a bit and I think uh what you are talking about is important. Um in all areas though, obviously not just in nonprofits, in our white house, in our elections. Um in all areas, we have to keep out foreign influence.
▶ 3:22:44So I guess the one piece of advice I would say to all of you who are experts I would say is um I think you sense the frustration from our side of the aisle about the potential for hypocrisy and that you're so good on one area especially when it keeps out foreign influence the least you could do is provide an opinion on other areas as well rather than just kind of put up a shield and say I'm not an expert I can talk about it because I think it kind of dings your credibility a little bit that's all and you guys got a lot to talk about and I don't but like I said I don't think you guys,
▶ 3:23:14you guys have a lot of credibility. Maintain that credibility by being uh not being afraid to talk about uh foreign influence in other areas of our government as well is what I'd recommend. Now, speaking of credibility, um I want to get back to this letter that was mentioned earlier and you guys may know about it or not.
▶ 3:23:32um in regards to dated February 3rd by Chairman Smith by David Schwiker subcommittee chair and Tracy man who is the co-chair of the future farmers of America caucus the FFA caucus here in Congress I am the other co-chair of that caucus and I can tell you I was deeply disappointed in representative man that he represented that this was from the FFA caucus let me be clear this letter was not from the FFA caucus this letter.
▶ 3:24:02No member of the FFA caucus besides Tracy reviewed this letter. No vote was held on this letter. No meeting was held on this letter. No members were asked to sign this letter except Tracy man. So as the other co-chair and co-founder of the FFA caucus, I can tell you that the FFA caucus has nothing to do with this letter. This letter has everything to do with Tracy and Jason and David, which is fine. I get that.
▶ 3:24:30but do not represent that the FFA caucus is supportive of this letter because I like I said this is about credibility and it's about making sure that when we delve into issues like this important issues like this any sort of foreign influence that it's done properly. You guys understand this and I would hope that my colleague representative man understands this as well. I've talked to him about this.
▶ 3:24:53He understands my disappointment because the last thing we want to do is take away from the good work that not just that we do on the FFA caucus, but the excellent work that the FFA does of raising our future leaders in agriculture there throughout the country. I think we see that when the Blue Jackets come here throughout the year, storm the hill and talk to us about how they are growing.
▶ 3:25:17When we talk to our FFA members in our districts and understand the importance that they will have to the future of agriculture which is taking a big hit right now and the least that we can do is support those young men and women and try not to get them wrapped up in our politics to be frank and unfortunately I believe that's what this letter did and unfortunately I think it tainted the FFA caucus. That being said Tracy and I are good friends we're good colleagues.
▶ 3:25:44We will move forward on this because we understand our priorities and our priorities are making sure that we continue to support the Blue Jackets, continuing to support the FFA, and continue to support the congressional relationship with the FFA. Now that Mr. Walter has returned, I will yield back my time. Thank you.
▶ 3:26:03Thank you very much. The chair now recognizes herself, uh, Congresswoman Vanine from the great state of Texas for five minutes. Mr. Mr. Weissman, as co-president of Public Citizen, you have long positioned yourself as a leading voice against dark money and foreign influence in American democracy. Yet, your testimony today has been nothing more than a hit job on President Trump. I don't like it when Democrats attack Republican witnesses. I don't like it when Republicans attack Democrat witnesses.
▶ 3:26:30But you've brought this on yourself, not only with your testimony, but also with your responses to questions. Instead of confronting how foreign actors linked to the Chinese Communist Party, Iran,Qatar, and other adversarial regimes have exploited taxexempt organizations to influence American politics, support terrorism, fuel anti-semitism, and sew division within our country. Your remarks have focused on attacking President Trump while giving a pass to networks that amplify foreign malign influence on the left.
▶ 3:26:58We have documented cases, you've heard it today, of CCP connected funding flowing through Neville Roy Singum to groups like Code Pink, the People's Forum, and others that have organized anti- ICE riots, campus disruptions, and protests that stroke anti-semitism and undermine law enforcement. We see Qatari and Iranian linked money propping up narratives that divide Americans and target Jewish communities. These are not abstract concerns. They endanger lives.
▶ 3:27:26They erode national security and the destabilize our democracy from within. You've described dark money as enabling a corporate oligarchy that raised the system against ordinary Americans. Yet in the 2024 elections, Democratic aligned dark money groups outspent Republican ones by nearly double, $1.2 billion versus $664 million. Why hasn't Why hasn't Public Citizen highlighted this disparity or called out Democrats for benefiting the most from the from the postcitizensite landscape?
▶ 3:27:56Public Citizen has led campaigns against dark money from groups like Americans for Prosperity. What about Democratic counterparts like Majority Forward, which funded $136 million into Senate races while tied to Senate Democratic leadership? Has Public Citizen ever investigated or criticized such groups for their undisclosed spending? You've testified before Congress about the dangers of undisclosed political spending.
▶ 3:28:17And yet, how do you reconcile that groups like Forward Future USA Action, which raised $63 million in 2024, mostly from 10 massive anonymous donations, funneled hundreds of millions to support Kla Harris and attack Donald Trump? Isn't this the same chokeold on democracy that you decry from other corporate sources?
▶ 3:28:39As a longtime advocate for disclosure laws like the Disclose Act, why hasn't public citizen addressed major liberal dark money hubs like the 1630 F fund, which distributed over $400 million in 2020 to anti-Trump efforts and Democratic causes and continued funding influences influencers and ballot measures with undisclosed donors in later cycles. You've warned about foreign link dark money corrupting US elections.
▶ 3:29:04What about examples like a Swiss billionaire who readed over a hundred million dollars through the 1630 fund to democratic super PACs? Does public citizen view this as problematic and only when it benefits conservatives? Groups like vote vets action fund and the league of conser of of conser conservation voters, both dark money entities, has spent tens of millions supporting Democrat candidates. Given your work on veterans and environmental issues, why focus criticism on right-leaning dark money while these progressive groups operate similarly without donor transparency?
▶ 3:29:35You've opposed dark money that aids corporate friendly policies. What about Patriot Majority USA, funded by Democrat consultant with ties to Harry Reid, which has spent millions on elections to help Democrats? Isn't this fighting fire with fire exactly what perpetuates the system that you want to public citizen campaigns against billionaire influence in politics. And yet, Bill Gates donated $50 million anonymously to Future Forward's dark money armed to support Harris.
▶ 3:30:02Why no outcry from your organization about such undisclosed mega donations while they align with progressive causes? You advocate for a constitutional amendment to end dark money entirely. And if that's the goal, why does public citizens work disproportionately target conservative or corporate dark money?
▶ 3:30:19While groups like the House Majority Forward, pours millions into Democrat races without similar scrutiny from your Public scrutiny, of which you are co-president, claims to champion transparency and expose dark money and foreign influence. And yet, its funding comes from overwhelmingly progressive powerhouses.
▶ 3:30:38George Soros's Open Society Foundations, the Ford Foundation, Rockefeller Brothers Fund, Rockefeller Foundation, and others ideologically aligned with the same left-leaning networks that it refuses to scrutinize. This financial dependency appears to drive your glaring double standard.
▶ 3:30:56In your testimony, you turned what should have been a serious examination of CCP linked funding, Qatari money fueling anti-semitism on campuses and Iranianbacked networks that are sewing discord into a blatant one-sided hit job on President Trump. Your testimony was not about protecting democracy from foreign threats. It was about weaponizing a national security hearing to smear the president.
▶ 3:31:20And until you and my Democrat colleagues apply the same rigor to your own funding ecosystem and to left-leaning dark money networks, your calls for reform are pretty much hollow and your credibility compromised. I yield back.
▶ 3:31:34Will you permit me to respond, Madam
▶ 3:31:36I now repres uh the chair now recognizes Mr. Kerry from the great state of Ohio for five minutes.
▶ 3:31:43I uh want to thank the chair and I want to thank all of our witnesses. um got to see some of the testimony on the on the screen in the back. Um but uh just we had a a voting issue that we had to take care of in the House Admin Committee and oddly enough we had a very similar hearing about some of the same things. So I'm going to do a line of questioning.
▶ 3:32:05I'll try to be quick and through my work on the committee of house administration we have diligently strived to establish a system that in that actually secures fair elections at state local federal levels and this is obviously something that needed to be addressed through that committee but along the way there and miss suin I know it's it's good to see you again and we've talked about this before and I'm going to allow you to talk about this there was a han uh Hans Doug
▶ 3:32:35Ves who is a Swiss billionaire again a Swiss billionaire who funneled millions of dollars through this organization called the 1630 fund. Now this 1630 fund great catchy name was to influence a number of ballot initiatives in the state of Ohio.
▶ 3:32:57Uh, in response, our Ohio Secretary of State Frank LaRose alongside the Ohio Republicans in the state work to pass legislation that essentially banning all foreign contributions to ballot measure campaign. So, Miss Sin, along with Ohio, 18 other states have enacted similar laws to protect prevent foreign nationals and entities from financially contributing to ballot measures and campaigns.
▶ 3:33:26Why would you think why haven't uh other states pursued legislation to prevent those same t those same contributions that would ultimately undermine
▶ 3:33:37Uh Representative Kerry, uh thank you for those remarks and uh good to see you again. Uh yes, your uh the House Administration Committee has been at the forefront of getting foreign money out of our elections and I'm very glad that we can continue this conversation today and thank you so much for bringing up uh foreign influence and ballot measure campaigns. uh is a huge loophole that foreign nationals can't give to candidates, but they can give to these ballot initiative campaigns that are often rewriting the state's constitution like what almost happened uh in your home state of Ohio.
▶ 3:34:07And in under two years, uh over 10 states have also closed that foreign funding loophole. Uh we are hopeful that by at the end of time all 50 states and hopefully the federal level, I know Congressman Fitzpatrick is trying to close this loophole on the federal level. To me, it seems bipartisan, common sense. Uh, but yet in your home state of Ohio, as you know, every single Democrat in the Ohio legislature voted against banning foreign funding in your state.
▶ 3:34:35Now, why they would be on support of foreign influence in Ohio is beyond me, but they took it one step further.
▶ 3:34:40And I'm I'm going to jump in here quickly. I think those same people that vote against it probably rooted for Michigan. Um, Mr. Walder, your organization, Capital Research Center, has documented the was it Arabella Advisors Network role in channeling large sums of I'm talking large sums of money uh into ballot initiatives on election related advocacy.
▶ 3:35:04So using Ohio issue 1 as example, can you explain how groups like the 1630 fund operated within the network and the extent to which foreign sourced wealth such as funding linked to the Swiss billionaire that I just mentioned can lawfully influence elections in states like Ohio and elsewhere?
▶ 3:35:25Uh sure, the 1630 fund operates dozens upon dozens of fiscal sponsorships. uh and it also directly engages in all kinds of electoral issues, including ballot initiatives. And we should add, of course, ballot initiatives are now seen as uh the one of the best ways to drive your voters to the poll for everything else you want, including getting people elected. Uh and yet our current law allows C3s to do that. And it also allows foreigners like Mr. V to give money to the 1630 fund.
▶ 3:35:54I would add one quick thing to what Caitlyn just said, and that is uh the top Democrat election lawyer, Mark Elias, sued your state of Ohio after you passed uh a ban on foreign money in these ballot initiatives, which I can only call that Um so led by the 16 1630 fund it appears that only a few key I mean they really essentially only had a few king key far extremist if you will
▶ 3:36:24very exotic um type funders that invest the lion share into these ballot initiatives in your opinion um was that the case and what is the well you know what I only have 10 seconds listen I'm going to submit a lot of my questions to both of you and uh for the record and I will do that. And with that, Mr. Chairman, I yield back and thank the witnesses.
▶ 3:36:44Thank you, Mr. Horford.
▶ 3:36:46Thank you, Mr. Chairman. Uh, thank you for hosting this hearing and I appreciate the opportunity for my colleagues and I uh and our witnesses to publicly examine the extent to which foreign influence money is running rampant in the United States. Yet, what is striking is that too often we avoid the most obvious cause, that is the deliberate choices that have been made by this administration to open the floodgates to foreign money and foreign influence. Mr.
▶ 3:37:14Weissman, in your written testimony, you highlighted how the Trump Vance administration is effectively ignoring an 88-year-old law whose sole purpose is to monitor foreign influence and prevent abuse. Yes or no, Mr. Weissman is ignoring the Foreign Agents Registration Act a serious commitment to stopping foreign foreign influence. No.
▶ 3:37:39Pam Bondi was confirmed as attorney general on February 4th, 2025 as one of her first official acts the very next was to announce minimal enforcement of the Foreign Agents Registration Act and other foreign influence laws. I have her memo here for anyone who doubts that. I think that the American people and Neadans back in my home state deserve to understand what that decision means for them. So, so I'll share an example.
▶ 3:38:10On January 21st, 2026, President Trump announced a 39% tariff on goods from Switzerland. That tariff later dropped to 15% shortly after Swiss business leaders presented the president with a Rolex watch and a personalized gold bar.
▶ 3:38:30This conduct was so egregious that lawmakers in Switzerland have called on their own prosecutors to examine whether these gifts violated Swiss anti-bribery laws. So, let's examine this deal to see if the American people got anything resembling the art of the deal. According to the Swiss, they promise to accept 500 tons of US beef.
▶ 3:38:55But the US exporting 500 tons of beef will not help Nevada cattle producers. Why? Because just three days ago, the Trump administration announced an unprecedented expansion of preferential access for Argentine beef, increasing imports to 100,000 tons.
▶ 3:39:17That represents roughly 800 million do uh dollars in Argentine beef exports that could otherwise support American ranchers. And this comes on top of approximately $40 billion in financial support extended to Argentina. To the American people who are watching, your tax dollars that should be used to lower the cost of health care or help our farmers is going to foreign companies.
▶ 3:39:46Nevada ranchers see no benefits. Instead, they will need to compete with Argentine beef exports as foreign producers gain preferential access because foreign influence laws are not being enforced. Let me be clear. If this committee is serious about addressing foreign influence, we must focus on who is enforcing the law. Foreign influence is not abstract.
▶ 3:40:13And that influence being used on the president means he gets richer while people in Nevada pay the price. That is not how our system should work. And that is why today's hearing is so important. and I look forward to working with the chairman and the ranking member and other members on this committee to make sure that we uphold ourselves to the higher standards including those uh embraced in the foreign agents registration act.
▶ 3:40:43With that, I yield
▶ 3:40:46Mr. Moran.
▶ 3:40:48Thank you, Mr. Chairman. Uh Mr. Chairman, Congress and this committee specifically, this committee on the ways and means has a responsibility to ensure that the tax exempt status is applied only to entities that actually benefit our local communities and our country as a whole. That responsibility includes understanding not only how money flows through the nonprofit sector, but how influence flows, especially in an era where technology allows narratives to be manufactured, amplified, and disguised at an unprecedented scale.
▶ 3:41:18Our adversaries like China understand our system and they exploit it. Artificial intelligence, social media networks have changed the consumption and accuracy of information Americans consume. When those tools are paired with vague nonprofit structures and limited disclosure requirements, it leads to widespread misinformation and confusion for the public. That is a legitimate concern for Congress regardless of party ideology or viewpoint.
▶ 3:41:44The privileges that come with nonprofit status also come with responsibilities to follow the letter and the spirit of the law. I want to show you uh a uh a graphic here as I asked some questions, Miss Sutherland, because it was your organization that was instrumental in uncovering the activities of British billionaire Christopher Hol, whose Children's Investment Fund Foundation poured more than $500 million into US advocacy that supported left-wing political causes.
▶ 3:42:14in addition to the CCP's Belt and Road Initiative. What's concerning about this is Mr. Hone's ties to CCP linked organizations which led to him abruptly pulling his funding from US groups once it was exposed. But it's also concerning because of the level of foreign money trying to influence our political activities and our policies. Miss Southerntherland, I understand your organization was key in res researching Mr. Han's funding activity and suspicious connections.
▶ 3:42:41Can you speak more about what you found in your research and what we see up here on the
▶ 3:42:46Uh thank you for that question and uh thank you for including the chart. Uh his uh foreign money does flow through a very complex web and we are at the forefront of exposing it and his foreign giving went under the radar for far too long because it was done through a charity called the Children's Investment Fund Foundation. You think it's about investing children in children? How noble.
▶ 3:43:05Uh what we found through our report and through your chart is that through a tangled uh foreign web, he was investing in climate litigation, protest, research, a radical green energy uh agenda, all while maintaining uh close and questionable ties uh with China. Uh Hones Charity actually has an office in Beijing. They actively work uh with the Chinese government.
▶ 3:43:27They bankroll CCC uh CCP connected organizations and their CEO got a friendship award from the Chinese government. I do not want anyone funding a US cause that is a friend of China and the fact that we exposed his money got him to finally stop bankrolling US causes. Uh but more uh attention needs to be done uh given those Chinese connections.
▶ 3:43:55And you wonder why is he working with China and bankrolling US causes at the same time.
▶ 3:44:01Yeah. And I got to tell you, it's extremely deceptive the way they go about it by hiding this this money through entities that are not correctly named. Certainly not named uh in a way that understands what they're actually doing. But it's it's amazing to me that we are subsidizing this activity through our nonprofit tax laws, actually giving them tax breaks and allowing them to do this uh under the radar.
▶ 3:44:26Do you think that strengthening this the u the foreign agents registration act or including nonprofits within its scope would help solve this problem of nonprofits acting on behalf of foreign individuals or entities?
▶ 3:44:40Absolutely. I think strengthening FAR is a great first step. uh we need to eliminate some of the exemptions in the nonprofit sector and tighten up some of those loopholes. Uh I think that a very strong case can be made for those nonprofits that are receiving hundreds of millions of dollars from this British activist hedge fund manager potentially could have a far violation on their
▶ 3:45:00Mr. S, you have a unique perspective on how adversaries exploit our nation's openness to so division. A recent network contagion research institute report specifically analyzed the Singum network, a donor portfolio linked to Neville Roy Singum and its ties to organizations like the People's Forum uh where he funneled at least $20 million um and the answer coalition, a pro Palestinian Palestinian organization.
▶ 3:45:26Your data shows these groups effectively co-opted domestic activism to push anti-American and pro-CCCP talking points following October 7th attacks. Can you explain the me mechanics of how the Singum network uses social media or AI to amplify these CCP align narratives? And do you also agree that we should strengthen and make more strict our foreign agents registration act to include nonprofits?
▶ 3:45:50Yes, I do agree that uh the Foreign Agent Registration Act should be uh uh applied to nonprofits. Um, so every time Americans see these uh staged and amplified protests that shut down bridges or block hospitals, they should know that these are multifaceted efforts. They're funded by millions of dollars designed to rile up Americans and join these foreign aligned uh uh these hostile nations uh to to the American public. I want to give you an example.
▶ 3:46:17If you look at Wall Street, if you have a million people on social media say buy this stock now, that's legal. If you have a bot army that looks like a million people being run by one person that says buy this stock now that's illegal would be called painting the tape I believe. So I just want to try to apply that now to what's happening with foreign influence. They're using these narratives and it actually it it brings about authentic activity. So just like you'd have in the stock market if you have a bot army it looks like a million people.
▶ 3:46:47It starts to get regular people engaged. Next thing you know, a stock's being pushed up or a stock's being pushed down. And it's a combination of inauthentic and authentic activity, but it's born out of designed inauthentic activity. And I think that's what you're seeing here.
▶ 3:47:00Yeah. And just to finalize, Mr. Chairman, I know I'm out of time. We're not talking about curbing free speech here. We're talking about refusing to subsidize foreign agents that are engaging in uh covert activities that are impacting our policies and our politics in the United States. and that is not what we should be doing through our tax code. With that, Mr. Chairman, I yield back.
▶ 3:47:22Mr. Moore. Thank you, Mr. Chairman. As uh my colleagues on this committee will know, I have been a very vocal supporter of charities, foundations, the larger nonprofit sector. My previous time in in Congress was in the social impact space in consulting an array of um philanthropic and efforts um through corporations that are trying to you know do their double bottom line differently and through uh
▶ 3:47:52just individual philanthropies. So big huge supporter and and maybe maybe one of the most vocal. I've uh I championed the enactment of the charitable act um giving everyday folks an above the line deduction on their donations and have highlighted the importance of private foundations because of the impact they've had particularly in Utah but I know that happens throughout the world. Um I recently launched the philanthropy caucus with Mr.
▶ 3:48:16Davis and have worked closely with philanthropists to ensure that invest America's initiative that we pass through the one big beautiful bill trump accounts are as successful as they can be. Miss Southernland, you actually just mentioned the the need, it's not a question right now, but the need to be focused on, you know, the next generation. What better way for philanthropy to be involved in supporting something like this invest America push, right? And and and and providing investment opportunities for children.
▶ 3:48:43That said, our witnesses have pointed out today, it's clear that in some cases, foreign actors are taking advantage of this sector. foreign money should not be funneling through nonprofits into our media uh or to our education and and especially into our elections. Um there this type of influence should not exist and it should not ever type to fuel this type of hostilities in our country.
▶ 3:49:05If we want a strong nonprofit sector to survive and for more support to come towards it, which I would love, we should all want to make sure that the loopholes are closed and that there is immense trust in the system. Mr. Dinsky, you've addressed some of this today and many of you have talked about it, but I want to just, you know, ask one more simple time. What specific gaps in the IRS's current taxexempt oversight system are at the root of this problem?
▶ 3:49:34Quite simply, lack of information, lack of information that's actionable. Um, if you go back to the forms, it doesn't ask about fiscal sponsorships. There's not even a checkbox for it. Um, someone mentioned that it's up to the not for-p profofit, the actual sponsor to have a narrative about it. That leaves that open to how much narrative how much is in that narrative. How much can be uh gleaned from that about what's going on. So, I I I come back to it that the form is is it's it's old. It's outdated.
▶ 3:50:00It needs to be uh brought into line with what's going on in today's world. give the IRS the tools they need, the the AI, have them develop better AI systems to take this information and figure out how to use it properly in a non-political way uh to make sure that our system is safe and Americans can trust the charitable system.
▶ 3:50:19And do you believe by by addressing that root cause what you're talking about, we can ensure that policy changes go after the bad actors, but also um we don't we don't put an undue burden on all of the compliant organizations out there. Uh the smaller charities that they they they're often understaffed and things like that. Can we do that balance if we address this? I
▶ 3:50:40I think we can. It's as I said earlier, it's not like implementing an anti-moneylaundering system that financial institutions have. Those are ownorous. I think there's a there's a middle ground or even lesser than a middle ground to to redesign these forms and not put the uh put an undue burden on charitable organizations. I was a treasurer of a charitable organization and on the board it was a small organization. We didn't have a lot of resources. But to answer some simple questions about these these topics that we've talked about is not going to put an undue burden on charitable
▶ 3:51:09Miss Southern I did mention you earlier. Would love your thoughts on anything that I've asked and I'll I'll wrap up my
▶ 3:51:14Uh thank you for that question. Uh I agree. I'm obviously much like you and I think we all are a huge fan of the charitable sework se uh sector uh but when charity turns into advocacy and they're using foreign money to do it is the problem and I think that the topic that we hear in the committee uh I think a real easy solution is to identify whether or not you are receiving foreign donations and if you can't reform the foreign 9990 I think that uh nonprofits in the advocacy space can elect
▶ 3:51:44to prohibit foreign funding My 501c3, Americans for Public Trust, does not accept any foreign funding. However, we have the Democrat witness joining with us that is actually received a donation from the V Foundation, the very Swiss billionaire that we are talking about who is influenced in our politics and policy. So, we can then all elect to not receive foreign money from foreign governments, foreign charities, and foreign nationals like my 501c3.
▶ 3:52:12Thank you, and I yield back, Mr. Chairman. Mr. Suazi.
▶ 3:52:17Thank you, Mr. Chairman. This is such an important topic. I want to thank the witnesses for spending all this time here with us. I really appreciate it. Listening to some of the testimony here today and some of the comments from my colleagues. You'd think this is a Democratic problem or a Republican problem. And this is not Democrats versus Republicans. This is the United States of America versus our foreign adversaries. So, I want you to all just tell me a yes or no answer. I hope you're all going to say yes. that you recognize this affects Republicans and Democrats, progressive organizations and conservative organizations. Do you agree with that, Mr. Walter?
▶ 3:52:48Miss Southerntherland?
▶ 3:52:50Miss Stone, Mr. S?
▶ 3:52:52Mr. Dubinsky?
▶ 3:52:53100%. Yes.
▶ 3:52:53Mr. Weissman.
▶ 3:52:55Okay. So, our country is so divided these days. People are being pulled apart from each other. And there are four factors that I've identified. I'm sure there's more, but there's four factors I've identified. One is we have all these safe seats in Congress. You can't lose. You're the Republican, the Republican seat, you're going to win. in the Democrat in the Democratic seat, you're going to win. So everybody panders to their base because the only way they could lose is by losing a primary and nobody votes in the primaries. Very few people vote in the primaries. So everybody panders to their base. That's a big problem dividing us. Second, social media. Social media rewards extremism.
▶ 3:53:23The more crazy things you say, the more extreme things you say, the more likes you get, the more followers you get, the more small dollars donations you get, it rewards extremism. Third, cable news. The most watched show on cable news is Fox News, 4 million viewers. Most watched show on MS is two million viewers. 350 million people in America. But these shows are not selling journalism or educating us. They're selling entertainment endorphin rushes in echo chambers. And the messages they give are completely different. Further dividing us in our country. But the biggest factor and the purpose of this hearing today.
▶ 3:53:53The biggest factor causing division in our country is our foreign adversaries. The Chinese Communist Party, the Russians, the Iranians, the North Koreans who are using our freedom. Today we're talking about how they're doing it through not for profofits but all through also through social media and they are feeding division in our country. They cannot defeat us economically. They cannot defeat us militarily. So they want to take what they see as being our biggest weakness which is our diversity.
▶ 3:54:19And they fuel dissent in our country utilizing the things that you talked about here today that affect Republicans and Democrats, progressives and conservatives. And they use our social media and they send different messages. They take issues where there's a some truth to it like Black Lives Matter versus Blue Lives Matter or Evangelicals versus Transgender or Israel versus Hamas and they give different messages to different groups and they fment division and they get us to all look at each other AND SAY, "WHAT'S WRONG WITH THOSE PEOPLE?
▶ 3:54:47THERE'S SOMETHING WRONG with you guys." So, we have got to recognize this is not Democrats versus Republicans. This is America, the United States of America, against our foreign adversaries that are trying to get us to divide each other. And we need people like yourselves to work together across party lines the same as we need in our committee to work across party lines, to work to defeat our foreign adversaries that are using our freedom, that are using our social media, that are using our not for profofits to try and divide us in our country.
▶ 3:55:17Mr. Densky, I looked at your testimony. You had some very practical things that you suggested about reforming the 990s to give more information to create more transparency. Mr. Weissman, as the Democratic witness looking at Mr. Dubinsky, one of the Republican witnesses, do you support the idea of reforming the 990s to have more transparency to give more information?
▶ 3:55:36I thought his ideas make sense. Yes.
▶ 3:55:37Okay. Mr. Dubinsky, I looked at Mr. Weissman's testimony. In his testimony, he supported thing called the Disclose Act for transactions over a certain amount that they should have to disclose whether there's foreign influence or not. Do you as the Republican witness support the idea of Mr. Weissman's idea of supporting the Disclose Act?
▶ 3:55:51I I do support the idea.
▶ 3:55:52So why don't we get Democrats and Republicans to work together to save America against our foreign adversaries that are trying to destroy our country utilizing our diversity and start working together to actually solve THESE PROBLEMS AND STOP MAKING THIS ABOUT YOU guys are no good. No, you guys are no good. No, you guys are no good. You you're no good. Let's work together and actually address the real problems that we face in our country. Mr.
▶ 3:56:14Chairman, I yield back and I want to thank you for holding this hearing and I hope that you'll get us to work together as a committee to actually find some common ground to address this issue to save our country against the foreign adversaries that are trying to divide us in our nation and stop letting other people try and make this into a political issue where it's Democrats versus Republicans. And I yield back.
▶ 3:56:36Thank you, Suazi. Mr. Yakam.
▶ 3:56:38Thank you, Mr. chairman for holding this important hearing and to our witnesses for lending their expertise today. We are sounding the alarm today on foreign actors seeking to exploit and abuse America's taxexempt sector to interfere with our elections. I want to focus on Mr.
▶ 3:56:54Hans Jurgv, a Swiss billionaire that the New York Times has called quote a leading source of difficult to trace money to groups associated with Democrats who routes money through quote a daisy chain of opaque organizations that mask the ultimate recipients of his Mr. V has leveraged a web of 501c3 and C4 organizations to donate hundreds of millions of dollars to groups that help Democrats in elections.
▶ 3:57:24These groups also undermine American energy independence and they promote other radical woke causes. The New York Times notes that quote several officials from organizations started by Mr. Ves and his team worked on the Biden transition or joined the administration.
▶ 3:57:41When the FEC investigated some of these organizations, the groups declined to offer specifics about what practices they have in place to ensure that money is not used to pay for ads or electoral Miss Sutherland, can you walk us through the actual mechanics here? When Mr. Bees donates to a 501c, C3, or C4, what specific steps allow that money to reemerge in a political action committee?
▶ 3:58:09How can auditors trace this money back to him when the current system makes it so easy for a foreign for foreign donor to launder contributions like this.
▶ 3:58:18Uh thank you very much for that question and as you can see that Hansorg vis uh channels most of his foreign money through the Arabell Advisers network uh using his 501c3 the V foundation and his 501c4 the burger action fund. He has funneled over two uh 307 million through the Arabell Advisers network to im you know impact a whole host of causes from ballot issues uh to climate change. And what makes it very difficult to track is is the web.
▶ 3:58:45Um and however at the same time that he is using his foreign money through this network of nonprofits, it is all going to these issue advocacy campaigns uh that are allowed to be funded with uh foreign money. And also what is very complex here and I think what we can all see is tracing the money back is there is a huge delay in when this money is reported. Uh this Friday we will finally find out how much Hans York spent in the 2024 cycle.
▶ 3:59:15So here we are, February 2026. We finally get to find out how much foreign money was spent through the Arabella advisor network almost 2 years ago. So yes, the money is uh going through a daisy chain of opaque organizations, but it is good that we are unmasking it and we do see the groups that are large recipients of his foreign money. Uh it's Indivisible, it's 1630 fund, it's the ACLU.
▶ 3:59:39Thank you. Uh Mr. Wiseman, Mr. Thompson asked you and the other witnesses to quote clarify under oath that your organizations have never received funds from a foreign national or foreign corporation. Your reply was and I quote not to my knowledge.
▶ 3:59:55Public Citizens 2014 annual report counts the wise the V's Foundation as a quote major donor and has named the new venture fund a known vehicle used by Hansorg V's to launder his foreign influence as a donor to your publicly available report since 2012. So I'd like to give you a chance to clarify that under your certification under oath that you have not taken funds from a foreign national.
▶ 4:00:21Well, I think those are coming from US foundations which makes the issue a little bit more complicated.
▶ 4:00:27So you think more complicated even even though his name is listed on your report
▶ 4:00:33Well, it's his it's his named foundation. It's not him.
▶ 4:00:35Yeah, the V's Foundation which is funded by Mr. V is a foreign national
▶ 4:00:40but it is not a foreign organization.
▶ 4:00:42So so so again I'm just asking you to
▶ 4:00:45if you will let me finish. I will clarify that is you are accurate. Um, our policy of not taking of affirmatively not taking foreign money is a more recent policy and we have taken efforts to make sure we do not I do not believe we had considerably in the past but the policy was not formalized. Um, and I think this if I don't want to get into the details of this there's no question there's no question what you're reporting is correct and I'm not
▶ 4:01:10so I'd actually like to go into the details of this because again Mr. Thompson asked you under oath if you taken money from a foreign national. So would you clarify and say that that you have indeed taken laundered money from a foreign national or would you stick to your earlier response of under oath of saying no we've never taken money from a foreign national which is it Mr. Wisman
▶ 4:01:29that is not money from a foreign
▶ 4:01:31Okay. Thank you Mr. Chairman and I yield
▶ 4:01:34Mr. Miller.
▶ 4:01:38Thank you Mr. Chairman. I really appreciate that. Uh thank you to my colleague Mr. Yakim. That was quite the exchange. I appreciate it for everyone who's watching. I'll just get right into it. U Mr. Walter, maybe you can help clarify this for us then um and help us with what my colleague was asking. So, from what I've heard so far, America's enemies can funnel as much cash into the nonprofit sector as they want. So, let's go through this hypothetical scenario and let's just see if I'm right or I'm wrong and please tell me.
▶ 4:02:08So theoretically, is it possible for Xi Jinping himself to entirely fund an American 501c3? I'm not done yet. By donating it through a donor advised fund without the public ever seeing his name on that C3's form
▶ 4:02:29Just again, so it is possible that Xi Jinping himself could do something like
▶ 4:02:34There's no legal barrier whatsoever. Thank you very much, Mr. Walter. I appreciate it. As a followup, Mr. Dinsky, is anyone within the United States government currently tasked with looking into these covert influence operations? And if not, would the IRS be an appropriate agency to employ skilled forensic accountants to sift through these funding networks?
▶ 4:02:57So, I think that this the answer to the second question is I think the IRS would be a good place to start. Um I don't know whether the NSA or somebody else in the government is is actively looking at this. Uh so I don't have knowledge of
▶ 4:03:09Okay. Thank you very much for that answer. Uh Mr. Dinsky. So essentially as what you're telling me is one possibly there are essentially no disclosure requirements for foreign funding so long as they flow through a DAFF. And two, the only people within the United States government who are looking into this are pretty much already extremely overworked or there's just not as much agencies or direction that should be looking into
▶ 4:03:35I I think that's correct. Okay.
▶ 4:03:37Uh Mr. Dinsky, do you think it would be valuable to set aside some specific resources at IRS CI to tackle this
▶ 4:03:45I think I I as I stated earlier in my testimony, I think it's about modernization. the IRS over many years in my career has gone through different phases of modernization. I think we're at another inflection point with AI and I think that the the bureau the service needs to adapt AI have it tailored to the function that they need it. Uh so whether there's funding there or not there there should be.
▶ 4:04:06Thank you very much. And earlier I believe it was this term we had another hearing maybe it was a subcommittee hearing or a full hearing. Um, but at the IRS, we still have fax machines, which I find in incredibly fascinating that within the United States government, we still have an agency that's using fax machines is I have a supercomput in my pocket uh with AI and chat, GPT, and everything else. Look, thank you for your time. I know it's been a very long day. I do appreciate it and I do appreciate your questions uh excuse me, your answers to our questions. Mr. Chairman, I yield back.
▶ 4:04:40Thank you, Mr. Miller. Um, uh, I'd like to thank our witnesses, uh, for appearing here today. Thank you for the conversation, the discussion, answering the questions. Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record today. Um, with that, the committee stands adjourned.