Skip to Content
IRS Whistleblowers, click here to contact the Ways & Means Committee about waste, fraud, and abuse.

Oversight Subcommittee Schweikert Opening Statement – Hearing on Tax-Exempt Charities Influencing the Political Process

December 13, 2023

“If Vladimir Putin were to donate money to a U.S.-based 501(c)(4), this organization is not required to disclose the source of this donation. Hypothetically, this organization could subsequently direct this money to a Super PAC that could help elect candidates for federal office.”

As prepared for delivery.

“Good afternoon, everyone and welcome to today’s Oversight Subcommittee hearing on the ‘Growth of the Tax-Exempt Sector and the Impact on the American Political Landscape.’

“Today we’d like to hear from our panel of expert witnesses about the growth and changes the tax-exempt sector has undergone as well as discuss some recent political activities of these organizations. I have been alarmed to read of several public accounts of large sums of money, to the tune of millions of dollars, flowing from foreign nationals into U.S.-based 501(c)(3)s and 501(c)(4)s, which then have directed these funds into influencing American politics. While U.S. law makes it illegal for foreign nationals to donate directly to U.S. candidates for office, it seems that these actors have found a loophole. This should raise eyebrows for all Americans. At the same time, I would like to emphasize that Americans have a First Amendment right to privacy when they donate to nonprofits. 

“Unfortunately, under current law, if Vladimir Putin were to donate money to a U.S.-based 501(c)(4), this organization is not required to disclose the source of this donation. Hypothetically, this organization could subsequently direct this money to a Super PAC that could help elect candidates for federal office. 

“Some of our colleagues on the other side of the aisle like to argue that Republicans are the drivers of ‘dark money’ spending, but I’d like to point out some facts about Democrats’ use of sophisticated dark money networks in the hopes that they remain intellectually consistent on this issue. 

“According to OpenSecrets, total ‘dark money’ spending data for the 2020 election cycle shows that there was nearly a two-and-a-half-to-one Democratic advantage over Republicans. While some Democrats have called for closing loopholes, OpenSecrets has noted, ‘that hasn’t stopped them from using secret funds to win elections.’

“CNN has reported that during the 2020 presidential race, Mr. Biden enjoyed six times the ‘dark money’ that former President Trump did. Mr. Biden had nearly $132 million of ‘dark money’ that backed his bid as opposed to nearly $22 million that backed former President Trump. It wasn’t just the 2020 Presidential cycle though – Democrats had a ‘dark money’ advantage during the 2018 and 2022 midterm election cycles.

“I hope that our witnesses today can educate us about where there are vulnerabilities that allow tax-exempt organizations to be used in inappropriate ways. I look forward to hearing from them today.”