In an underreported move on Aug. 14, the chairmen of the House Ways and Means Committee and the Oversight Subcommittee announced a joint examination into whether nonprofits have acted as a funnel for foreign funding intended to influence domestic elections, in violation of U.S. law. The two respective chairs, Reps. Jason Smith, R-Mo., and David Schweikert, R-Ariz., released an open letter soliciting input from the public.
The Internal Revenue Service publishes Code 501, which regulates what different types of tax-exempt corporations can claim as permissible activities. The most familiar political nonprofit corporations allowed under this code are 501(c)(3), 501(c)(4), and 527 groups, among several others. The IRS employs a large number of agents dedicated to tracking compliant activities and financial transactions of these groups.
On the Ways and Means Committee website, members announced they are examining whether tax-exempt groups are violating the prohibition on certain activities, including funneling funding from foreign sources. An open letter to these groups requests “information and input on existing rules and regulations governing them and foreign sources of funding for tax-exempt organizations and what, if any, policy changes Congress should consider.”
Among other examples, the open letter cites news reports of the financial activities of a Swiss billionaire named Hansjörg Wyss, who has used a network of dark money groups to donate to radically leftist causes and campaigns in the U.S. According to a report in The New York Times in 2021, Wyss’s foundations gave direct donations in the tens of millions to pro-Democrat and
