True the Vote Private Inurement and Excess Benefit
Sometimes I wonder if reporting on sensational “get rich or die trying” nonprofits is a good use of blog space or intellectual energy. Its all pretty boring and routine after awhile. Incessant reporting on sham organizations sort of reminds me of the 11:00 pm news where the apparent motto is “if it bleeds it leads.” And then I feel like I might need a shower. Is there anything edifying about reporting on another group of bovine defecators cheating the suckers donating to “build the wall” or to fight the “epidemic of foreign interference” in elections using voting machines to change landslide votes in favor of one candidate to another candidate? I doubt it, but the media and watchdog groups do us a service nevertheless by bringing these things to light.
So last week the Campaign for Accountablity (CfA) submitted a complaint against True the Vote, an organization that brought in over $5 million in donations according to its 2020 Form 990. Here is a sample of the sort of “election integrity” reporting TTV disseminates:
As far as I can tell, the folks running TTV are a buncha hucksters selling political snake oil. Quite successfully I might add. So CfA’s whistleblowing — relying on a gold mine of discovery in a fraud case brought against TTV by one of its donors — indicates that TTV insiders are enriching themselves at the expense of stupid donors and the rest of us. Here are snippets from CfA’s complaint:
Shortly after the November 3, 2020, U.S. presidential election, True the Vote began soliciting donors to support a $7,325,000 program called “Validate the Vote 2020.”12 Donor solicitation documents for the program stated that True the Vote intended to use donated money to uncover proof of election fraud (e.g., illegal ballots cast and counted), file lawsuits in federal court, and ultimately overturn the results of the presidential election in seven swing states. Ultimately, True the Vote only filed lawsuits in four out of the seven states and voluntarily dismissed each of them within a few days of filing, notably, before any court hearings were convened. This seemed to effectively signify the end of Validate the Vote 2020, which was confirmed when True the Vote’s general counsel, James Bopp Jr. stated that as of November 16, 2020 “there were no other cases pending from the group” challenging the results of the 2020 presidential election.
Despite quickly terminating Validate the Vote 2020 within a few days of its inception, True the Vote paid out a substantial portion of the funds raised for the program, including $750,000 to OPSEC Group, LLC, a for-profit business wholly owned by former True the Vote director Mr. Phillips. True the Vote also paid over $280,000 to the law firm of its general counsel, James Bopp Jr., a figure that has been questioned as hard to justify based on the amount of legal work involved. Fredric Eshelman, a wealthy pharmaceutical entrepreneur who had donated $2.5 million to support the Validate the Vote 2020, sued True the Vote for the return of his money, alleging True the Vote had failed to use his donations as promised, pursuing state lawsuits.
Mr. Phillips became a director of True the Vote in 2014 and continued to be listed on the group’s Form 990s as a director through 2019. True the Vote has taken inconsistent positions, however, about when or if Mr. Phillips ceased serving as a director. True the Vote initially filed a 2019 Form 990 listing Mr. Phillips as a director, but, when a media organization inquired about his director status, True the Vote created a new version of its 2019 Form 990 that did not include Mr. Phillips as a director and sent the new version to both the media organization and tax-exempt organization data aggregators, such as Guidestar.
Mr. Phillips organized OPSEC Group, LLC (“OPSEC Group”), as an Alabama limited liability company on September 17, 2020. He represented in a federal court declaration that he is the entity’s president and sole owner. Donor solicitation documents for Validate the Vote 2020 suggested that OPSEC Group’s role would be to “[a]ggregate and analyze data to identify patterns of election subversion[.]” Although True the Vote effectively abandoned Validate the Vote 2020 within a few days of its inception, OPSEC Group nevertheless sent True the Vote an invoice on November 9th, 2020 for $350,000 and on December 7, 2020 for $400,000, both of which True the Vote paid in full. It is possible the total amount paid to OPSEC Group exceeded the $750,000 disclosed in connection with Mr. Eshelman’s lawsuit, given that OPSEC Group’s invoices to True the Vote listed data, analysis, and litigation support in the description of services performed and True the Vote categorized $1,434,680 and $1,372,612 of 2020 expenses as “litigation support” and “data purchase & analysis,” respectively.27 Although it is also possible True the Vote either spent these amounts internally or paid them to other vendors, it seems unlikely given that True the Vote had zero employees in 2020 and OPSEC Group may have been the organization’s primary research and data analysis vendor.
darryll jones