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The SPLC has been federally indicted on six counts of wire fraud, four counts of false statements to a federally insured bank, and one count of conspiracy to commit concealment money laundering. And the charges were filed in the Middle District of Alabama. 14-page indictment PDF here.
In brief, the indictment alleges that the SPLC raised money under false pretenses by claiming to fight right-wing extremism, instead funding extremist informants with roughly $3 million dollars of donor money. The informants included members of the KKK and an organizer of the infamous Charlottesville unite the right fiasco. They allegedly did this using illegal means, creating fictitious cutouts and lying to banks to open phony bank accounts to obscure the flow of funds from the SPLC to their informants.
I can't help but feel some schadenfreude here - "no one is above the law" also applies to left-wing NGOs who think they can larp as spies. They even named one of their cutouts Center Investigative Agency... It seems like they flew very close to the sun thinking that their brand and political affiliation would shield them from scrutiny. Project Veritas got a lot more heat for doing a lot less.
From a layman's perspective the indictment seems pretty compelling but I'd be curious to hear what the legal commentators here think. Of course this is only one side of the argument, but those statements to the bank in particular seem quite incriminating. Also, what exactly would be the consequences for the SPLC if the DOJ succeeds on some or all counts?
This is pretty thin gruel. Nonprofits have broad discretion to use unrestricted funds any way they see fit to support their mission. Cases of nonprofit fraud usually fall into five general categories:
Entirely fraudulent nonprofits: These are grifts from the beginning where the founders never intended to spend any of the money they raised on the ostensible purpose and only lined their pockets. This is the most obvious fraud.
Embezzlement: Where an employee or director of a legitimate nonprofit misappropriates funds to line his pocket. Again, an obvious fraud, though it's limited to one person (or a few people) and isn't representative of the organization as a whole.
Questionable nonprofits: This is a term I made up to refer to organizations whose administrative expenses are grossly disproportionate to program expenses. E.g., a food pantry in a large city that raised $45 million one year but only distributed $149,000 worth of food. These are usually the biggest media scandals because they often involve large organizations that do a lot of advertising and fundraising, reflected in financial statements that suggest they spend money on little else than advertising and fundraising.
Improper use of restricted funds: This is often benign in a PR sense but serious in a legal sense. If someone donates money for a specific project, it can't be used for another project or to cover general expenses. If the food bank in the above example solicited donations for a building fund that would pay for planned renovations to their facility, and when food stamps were in jeopardy last fall they raided the fund to buy food for the needy, one could argue that it wasn't that big of a deal, maybe even the right thing to do. But it isn't permitted.
Other improper use of funds: Again, this usually involves some personal benefit to the organization's employees or directors, like directing program services towards them or distributing profits. It also includes other miscellaneous non-nos like spending money on political campaigns or endorsements and improperly paying volunteers in ways that subject you to labor laws that you aren't following.
The first thing I would note for any of these is that none of them is particularly likely to result in a Federal fraud indictment. regulation of nonprofits is done at the state level, usually by the AG. Federal involvement is limited to the IRS for tax status and the FTC if they are large organizations that do a lot of advertising. What SPLC is accused of doing, though, doesn't fit into any of these categories, and there's no clear violation of nonprofit law. What the indictment accuses them of is fraudulently soliciting donations by using the funds in a manner that is inconsistent with the mission statement as it appears on their website. If what they are accused of doing is a matter for Federal criminal charges, then practically every nonprofit in the country should be charged, mostly for stuff that is entirely unobjectionable.
Consider the following fictional example: The Allegheny Trails Alliance is a nonprofit whose advertised mission is to support trail maintenance and construction on public lands in Pennsylvania and West Virginia. They donate $10,000 in unrestricted funds to support a trail construction project in Garret State Forest in Western Maryland, which is outside of their technical operating area but is frequented by the same people who frequent trails in PA and WV. Is this wire fraud? What if they pay a contractor to perform invasive species removal at a state park where they have a maintenance contract? Is this wire fraud because it isn't directly related to trail construction or maintenance?
The answer is no, because advertising gets a lot of leeway when it comes to promises like this. Practically every product you buy contains some kind of statement that would constitute fraud if we held the manufacturers to their exact word. The biggest risk to a nonprofit spending program funds like this is from donors, who might not donate again if they don't like the projects. From a legal perspective, what matters is the mission statement that appears in official filings, and even then, most nonprofits write these as widely as possible, state AGs will only pursue the most egregious violations, and the penalties are civil, not criminal. But in SPLC's case, it's not even clear that what they did violated their ostensible mission. I don't think Todd Blanche or anyone else in the administration is going to argue that SPLC gave money to hate groups because they really like white supremacy. It's pretty uncontroversial that they were using the money to pay informants, and that they notified the authorities if any illegal activity was discovered. It may be a shady practice, but it's not directly contrary to their mission, and when you add that to the fact that the government is relying on an advertising statement on a website as an inducement for fraud, it's hard to see how this stands up.
The bank fraud allegations seem more serious, but upon closer inspection, they aren't. What they basically did is have an employee open up various accounts in the name of fictitious sole proprietorships. The SPLC then put money into these accounts, which were used to funnel money to organizations they targeted. The purpose of the fictitious businesses was to disguise the origin of the money from the organizations. If we look at the text of the statute they are indicted under:
I omitted a lot of surplussage there. In fact, I admitted so much surplussage that I wouldn't be surprised if the attorney presenting this to the grand jury read the part up to the ellipses and skipped to the end, because, and I never thought I'd say this, the indictment doesn't allege facts that make a prima fascia case! I don't see anything in that statute about opening a bank account. If you read the entire section, including the short title, it's clear that it is referring to loan applications. There are no allegations in the indictment that the SPLC ever applied for a loan. There might be some FinCen reporting requirements or something that they violated, but cursory searching has failed to uncover anything that would have been in force when the accounts were opened in 2008, which incidentally creates a statute of limitations problem as well.
The money laundering charges are subordinate to the fraud charges, and are thus bogus. I predict this goes nowhere.
Don't get my hopes up. I would love for them to go for those wikipedia guys next.
That's practically impossible. Wikimedia Foundation (the org behind Wikipedia) does not do the editing and does not exercise any editorial control (excepting some rare cases where it is necessary to comply with the US laws). The editing cabals and Wiki admins are not controlled by Wikimedia and by any other official organizations, and a lot of them not even in the US. Those in the US would be protected by the First Amendment. Wikimedia sponsors a lot of stuff, including a lot of woke leftist stuff (don't think any Nazis though, SPLC is way ahead of the curve here), but there's no possible way to consider it fraudulent - they do it all in the open AFAIK. I am not very happy that the biggest and one of the most trusted (despite all) knowledge repositories on the planet is captured by the woke, but the US government can't do much about it, at least not without discarding the First Amendment, which would be a much bigger loss.
I think the argument is more Wikipedia begs for donations "to keep the servers running" but uses the vast majority for causes completely unrelated to running Wikipedia.
"Running Wikipedia" is a very nebulous term. You can take it in a very restrictive sense - paying for hardware, bandwidth and maintenance for the skeleton crew necessary so that the site remains on air. Then indeed, most of the donations do not pay for that. If, however, you allow development of new software and new modes - there are many more wikis beyond Wikipedia, though most are not as well known, but they exist and have their own audience, such as Wikidata, Commons, Wiktionary, Wikivoyage, and many others - then the donations would cover a significant part of this already. If you add some grants that are aimed at improving wiki content - such as paying people for writing software or articles for the benefit of Wikipedia - then you cover the substantial bulk of the expenses. Sure, some of these grants would have very woke tint - e.g. specifically concentrating on some woke selection or aspect and serving specific woke audience - but you can not say these grants are fraudulent and a private foundation has the right to be woke and finance woke grants. While for a federal government distributing tax money the equanimity and absence of any discrimination must be a requirement, for a private entity it is not possible to ask for that, and if they do choose to prefer woke causes, it is not a crime.
Moreover, if I remember correctly, the fundraising banners don't even claim these donations are necessary to run Wikipedia (indeed, they are not for many years now, though once they used to be, Tides foundation's support ensures Wikipedia can survive financially without any additional donations, if necessary, even though at the cost of freezing a lot of projects) - see the example here: https://en.wikipedia.org/wiki/Wikipedia:Fundraising/2025_banners#%22Current_best%22_banner_as_of_July It just says, roughly, "Wikipedia is cool, please give us a little money". It does not make any claim about necessity of the donation or where that donation would go.
I would call it somewhat deceptive:
Implicitly the last point relates to the first two, ie your donations allow Wikipedia to continue to exist.
If they had the first paragraph be an introduction to their grants program, that would be different, but I would call their current banner less than maximally honest. Obviously legally it’s safe.
Yes, it's leading on, of course, but that's a cornerstone of advertising industry. Like they show a guy drinking $BRAND_NAME_DRINK and then beautiful lightly dressed ladies surround him adoringly. The implication is clearly that the same would happen to you if you start drinking $BRAND_NAME_DRINK even though it's clearly a lie. But it's a lie within socially accepted boundaries.
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