The Washington, D.C. attorney general has launched a probe into conservative legal activist Leonard Leo and his nonprofit organizations, Politico reported Tuesday.
The Campaign for Accountability (CFA), a progressive group with extensive Democrat ties, filed the complaint that appeared to have prompted Attorney General Brian Schwalb’s investigation, asking his office to investigate whether Leo violated nonprofit tax law, according to Politico. CFA was founded by two former leaders of the left-wing group Citizens for Responsibility and Ethics in Washington (CREW), Louis Mayberg, a Democratic Party donor, and Anne Weismann, according to Influence Watch.
CFA launched in 2015 as part of the Arabella Advisors-managed New Venture Fund, transferring to the Hopewell Fund — also managed by Arabella Advisors — in 2016, according to Capital Research Center. Arabella Advisors provides accounting and consulting services to a left-wing dark money network that includes the Sixteen Thirty Fund, which has poured millions into Democratic candidates’ campaigns.
CFA Executive Director Michelle J. Kuppersmith also sits on the board of Fix the Court, a group that advocates for Supreme Court transparency and ethics reform, according to tax forms the group’s own executive director accidentially leaked to the Washington Examiner. The conservative National Legal and Policy Center alleged in a June IRS complaint that Fix the Court illegally overpays its director, the Examiner reported. (RELATED: ‘Political Retaliation’: Conservative Legal Group’s Co-Chair Fires Back At Dem Senators’ SCOTUS Ethics Inquiry)
U.S. National Security Adviser John Bolton speaks at a Federalist Society luncheon September 10, 2018 in Washington, DC. (Photo by Win McNamee/Getty Images)
The CFA complaint questioned whether some of the independent contractor payments made to Leo’s businesses for the purposes of research, consulting or public relations “may not have been payments for services actually rendered but rather masked Leonard Leo siphoning exempt organization income or assets for his personal use.” It also alleges Leo’s nonprofits directed tens of millions to his two for-profit companies, CRC Advisors and BH Group, between 2016 and 2020.
“Such payments were generally listed as made in exchange for alleged consulting, research, public relations, or similar services,” the complaint states. “However CFA has reasonable questions about whether those alleged services were actually rendered at all or, if services were rendered, whether the payments made were substantially in excess of fair market value.”
Politico reported in March that nonprofits Leo started have paid $43 million to a for-profit company he chairs, the political consulting firm CRC Advisors.
Leonard Leo is the co-chairman of the Federalist Society, which played a key role in shaping former President Donald Trump’s list of potential judicial nominees.
David B. Rivkin Jr., the attorney representing those named in the investigation, told Politico that the complaint “is sloppy, deceptive and legally flawed and we are addressing this fully with the DC Attorney General’s office.”
The Campaign For Accountability told the Daily Caller News Foundation it has no relationship with Arabella Advisors. However, tax documents show it has received funding from both the Hopewell Fund and the New Venture Fund.
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