House Ways and Means hearing examines alleged foreign influence flowing through U.S. nonprofits

Chairman Smith opened a House Ways and Means oversight hearing saying the panel has investigated ‘‘money trails behind tax‑exempt organizations’’ and will pursue abuses that, he said, ‘‘fuel antisemitism and interfere in elections.’’ He named groups and individuals he said were part of complex donor networks and vowed the committee would use available tools to hold actors accountable.

Witnesses detailed how foreign donations and multi‑layered grant flows can obscure original funders. Caitlin Sutherland, founding executive director of Americans for Public Trust, called the rise of ‘‘foreign dark money’’ a threat to democratic processes and cited reporting that, she said, identified billions routed through charities and donor vehicles to finance litigation, protests and advocacy. She urged stricter disclosure and tighter rules around how nonprofits participate in public policy fights.

Adam Sohn of the Network Contagion Research Institute described case studies he said showed how donor networks and fiscal sponsorships can bootstrap projects, amplify digital narratives and mobilize protests rapidly. He cited the Neville Roy Singham network and the People’s Forum as examples of organizations he said coordinated messaging and actions that, in his view, had destabilizing effects.

Forensic accountant Bruce Dubinsky told the committee the IRS form 990 lacks structured fields that would let regulators trace pass‑throughs, fiscal sponsorships and donor‑advised fund (DAF) flows. He recommended adding standardized questions—checkboxes for fiscal sponsorships, declarations on foreign funding, and project‑level budget lines—and using modern data tools and artificial intelligence to flag anomalous patterns for investigation.

Scott Walter of the Capital Research Center and other witnesses urged enactment of disclosure legislation, including the DISCLOSE Act, and reforms to the Foreign Agents Registration Act to close nonprofit exemptions they said foreign actors exploit. Witnesses and members repeatedly returned to the role of DAFs, which they said can mask donor identity when funds are granted years after contributions, and to fiscal sponsorships that allow nonexempt projects to receive tax‑deductible donations under a sponsor’s EIN.

Democratic members pressed back, arguing the hearing selectively targeted advocacy groups opposed by the majority and that concerns about presidential gifts and business ties should also be examined. Representative Doggett and several others said oversight must be even‑handed and respect constitutional protections for speech and association. Republicans and some witnesses countered that harm from opaque foreign funding transcends politics and called for bipartisan action on disclosure and enforcement.

Committee members pressed for actionable proposals. Suggestions that drew support from witnesses included modernizing Form 990 with specific fields on fiscal sponsorships and foreign receipts, targeted reporting thresholds for DAF inflows and outflows, stronger enforcement and clearer guidance on what activity disqualifies tax‑exempt status, and technological investments at the IRS to enable risk‑based reviews.

The hearing ended with leadership allowing two weeks for written questions to witnesses and the committee adjourned. No formal votes or legislative actions were taken during the session; members left clear differences on emphasis and next steps but notable cross‑party agreement that improved transparency could reduce the risks raised at the hearing.