WASHINGTON, D.C. – Reports indicate that individuals associated with organizations enjoying generous tax benefits under the U.S. tax code have direct ties to and may be under the influence of America’s foreign adversaries – including China. In a letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel, led by Ways and Means Committee Chairman Jason Smith (MO-08), Oversight Subcommittee Chairman David Schweikert (AZ-01), and Ways and Means Republican Nicole Malliotakis (NY-11) – and joined by every Republican Ways and Means member – the Committee raises concerns about foreign adversaries’ exercising influence over American-based tax-exempt organizations and calls on the IRS to engage in rigorous oversight with respect to suspected organizations with ties to the Chinese Communist Party (CCP) that have financed and fueled the spread of Chinese propaganda:

“Our concerns stem in part from recent public reporting that identifies several specific tax-exempt organizations that promote CCP propaganda and related initiatives. These include the U.S.-based Energy Foundation and The People’s Forum, among others. We are concerned about how these tax-exempt organizations are funded and whether they are being operated for exempt purposes under Section 501 of the Internal Revenue Code.”

The letter details the level to which these organizations – including the Energy Foundation – have direct ties to the CCP and, while receiving tax benefits in the U.S., are conducting business in a way that furthers the economic interests of China:

“Although the organization claims to be headquartered in California, filed tax forms show the group refers to itself as ‘Energy Foundation China,’ and reports suggest that the majority of its operations are conducted in China with a staff that has substantial connections to the CCP – including its CEO and President who previously served as the deputy director general of China’s National Center for Climate Change Strategy. Even more concerning is the fact that this group contributed $3.8 million to promote ‘green’ energy policies that would increase our country’s dependence on Chinese minerals and materials.”

The Ways and Means Committee cites reports identifying Roy Singham, a tech mogul based in Shanghai who has given nearly $1.8 million to the Maku Group, a Chinese media company that says its goal is to “tell China’s story well.” Of concern to the Committee, Mr. Singham owns and operates a complex network of America-based nonprofits that push CCP propaganda and have engaged in activities to influence America’s political landscape as well as foment antisemitism:

“Mr. Singham is actively fueling CCP propaganda and financing indoctrination efforts abroad by providing hundreds of millions of dollars to groups that mix progressive advocacy with CCP talking points. Despite this foreign activity and engagement with CCP-tied organizations across the world, Mr. Singham’s American-based nonprofit organizations continue to do business as usual, supporting political activity and pro-CCP propaganda. These political activities include those believed or intended to influence Americans about the political or public interests, policies, or relations of a foreign government…

“The People’s Forum, another 501(c)(3) organization funded by Mr. Singham, was recently at the center of a series of massive antisemitic events in the wake of the Hamas attacks on October 7, 2023.”

In December 2023, the Ways and Means Subcommittee on Oversight heard testimony on the total lack of transparency surrounding how money from foreign nationals can influence the American political systemwhen funneled through 501(c)(3) and 501(c)(4) organizations. That hearing followed a November 2023 hearing by the Ways and Means Committee on the spread of antisemitism on the campuses of tax-exempt universities as well as financial links between so-called charitable organizations operating within the United States and terrorist organizations. 

Ways and Means Committee Members are requesting information from the IRS about what the agency is doing, if anything, to investigate these matters and gather information to discern how tax-exempt organizations receive funding from foreign sources like the CCP, whether such organizations are operating within the protocols required for tax-exempt status, and what action the IRS would take against those organizations if they were found to be promoting conduct counter to public policy.

Read the full letter here.