Text of Scott Walter’s Testimony Before the House Ways and Means Committee

Scott Walter’s Testimony Before the House Ways and Means Committee
Written Statement: HTML or PDF
Oral Testimony: Video (below) and HTML
Full Committee Hearing (House website)

Oral Testimony

To House Ways and Means

Subcommittee on Oversight

Rep. David Schweikert, Chairman

Scott Walter

President, Capital Research Center

December 13, 2023

Chairmen Smith and Schweikert, Ranking Member Pascrell, distinguished members of the Subcommittee, thank you for the honor of testifying. I’m president of the Capital Research Center, where we study how special interests engage in politics, especially through nonprofits.

I’m excited to be asked to discuss foreign money in American nonprofits, because in our deeply polarized world, foreign money in our politics is opposed by nearly everyone—left, right, and center. Last year when I testified alongside today’s Democratic witness, he raised the spectre of illegal foreign contributions to 501(c)(4) nonprofits and cited a journal article whose author insisted foreign donations pose “different and greater” dangers than legal, domestic donations to (c)(4)s—donations often criticized as “dark money.”[1]

Our happy task of bringing Left and Right together on this threat should be even easier, because by far the largest case I know of where foreign money flows to American (c)(4)s and (c)(3)s involves a billionaire. While conservatives don’t insist billionaires shouldn’t even exist, as one Democratic Member of this House has said,[2] we do criticize billionaire donors when they improperly interfere with American politics, as when the Zuckerbergs gave a half-billion dollars to manipulate the 2020 elections.[3]

Today we can focus on the Swiss billionaire and foreign national Hansjörg Wyss, who in the last two decades gave roughly a half-billion dollars to America’s largest “dark money” network, the sprawling empire run by Arabella Advisors. Don’t think I’m pushing a conspiracy theory. My written testimony carefully documents this foreign billionaire’s meddling in America citing only mainstream media sources—the New York Times, Politico, and the Associated Press—plus the Federal Election Commission’s general counsel.

The FEC’s general counsel notes Wyss illegally made direct political contributions, though the statute of limitations has expired, giving to Sen. Dick Durbin and Reps. Jay Inslee and Mark Udall, among others.[4]

The Associated Press calls Wyss a “Democratic-aligned megadonor” and reports his nonprofits helped “bankroll efforts to lift President Joe Biden’s agenda and paid for TV ads promoting Democratic congressional candidates” in the midterms.[5]

The New York Times reports, “tax filings show [the Wyss Foundation and (c)(4) Berger Action Fund] donated $208 million from 2016 through [2020] to three other nonprofit funds that doled out money to a wide array of groups that backed progressive causes and helped Democrats in their efforts to win the White House and control of Congress.” “Beneficiaries” of Wyss’s “direct giving included … organizations that ran voter registration and mobilization campaigns to increase Democratic turnout, [and] built media outlets accused of slanting the news to favor Democrats.”[6]

Politico reports Wyss gave $1 million to the “National Redistricting Action Fund, a sister group of Democrats’ national redistricting hub.”[7]

This is truly shocking:  A foreign national billionaire appears to have affected the very membership of this House and this Committee. The lines governing the districts you represent may have been carved in part by foreign money. The same foreign cash may have funded the turnout efforts in your last elections.

Surely we can all agree this is not the role of foreign billionaires.

Note that this foreign billionaire wasn’t operating alone. For two decades he’s been joined at the hip with the undisputed heavyweight of Democratic “dark money,” the Arabella Advisors empire. The nonprofits run by Arabella include (c)(3)s and (c)(4)s. They are gargantuan. In the 2018 election cycle, these nonprofits raised $1.2 billion; in 2020, $2.6 billion; in 2022, $3 billion.

Several remedies have been suggested to deal with this problem. Some are reasonable. For instance, legislation introduced into the House that would prohibit (c)(4)s that receive foreign cash from donating to Super PACS for several years. Other responses include Prof. Hackney’s suggestion that private foundations be eliminated from the tax code, and my own think tank’s suggestion that (c)(3) foundations and charities not be allowed to fund or execute voter registration and turnout. The president of Wyss’s Foundation and (c)(4), Molly McUsic, was involved in a massive (c)(3) voter registration scheme that’s still active and deserves its own hearing.[8]

Some people call for greater enforcement by the IRS, but we all know the IRS has been badly abused by both parties in the past and is always likely to have partisans like Lois Lerner overseeing enforcement.

Lastly, there’s the supposedly all-purpose cure for everything nonprofit; namely, government-coerced donor disclosure. I’m proud to stand with the NAACP of Bull Connor’s 1950s Alabama and the NAACP of this afternoon, who oppose that ugly intrusion on the privacy of American citizens.

Thank you.

[1] Norman I. Silber, “Foreign Corruption of the Political Process Through Social Welfare Organizations,” 114 Northwestern University Law Review, 2019, 106, https://scholarlycommons.law.hofstra.edu/faculty_scholarship/1203, cited in Philip Hackney, “Written Testimony of Philip Hackney to the U.S. Senate Finance Committee Subcommittee on Taxation and IRS Oversight, May 4, 2022, https://www.finance.senate.gov/download/0504-hackney-testimony.

[2] Quoted in Eliza Relman, “Alexandria Ocasio-Cortez said billionaires shouldn’t exist as long as Americans live in abject poverty,” Business Insider, January 22, 2019, https://www.businessinsider.com/alexandria-ocasio-cortez-thinks-billionaires-shouldnt-exist-2019-1.

[3] The Capital Research Center has analyzed the data on “Zuck Bucks” in all of the battleground states and found that without exception, this 501(c)(3) “charitable” effort went disproportionately to Democratic-leaning jurisdictions. Our analysis and complete data are available at https://capitalresearch.org/article/shining-a-light-on-zuck-bucks-in-key-states/.

[4] Wyss’s direct donations remain in FEC records: https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Wyss%2C+Hansjoerg&contributor_name=Wyss%2C+Hansjorg.

[5] Brian Slodysko, “Group steers Swiss billionaire’s money to liberal causes,” Associated Press, April 4, 2023, https://apnews.com/article/dark-money-democrats-wyss-politics-elections-601d40cd01569190559d545418afe396, citing https://apnews.com/supreme-court-of-the-united-states-5d2ebf287562443fb4c36e235b4afec9

[6] Ken Vogel, “Swiss Billionaire Quietly Becomes Influential Force Among Democrats,” New York Times, May 3, 2021, https://www.nytimes.com/2021/05/03/us/politics/hansjorg-wyss-money-democrats.html, citing an appraisal of the news sites by the left-leaning group NewsGuard; see https://web.archive.org/web/20210810023737/https://www.newsguardtech.com/wp-content/uploads/2020/02/Courier-Newsroom-NewsGuard-Nutrition-Label.pdf.

[7] Scott Bland, “Liberal billionaire’s nonprofit splashed $56M in 2020,” Politico, March 18, 2022, https://www.politico.com/news/2022/03/18/liberal-billionaire-nonprofit-dark-money-00018513.

[8] Molly McUsic used her Wyss Foundation email to send an early version of this $100+ million (c)(3) partisan voter registration scheme to political operative John Podesta as he planned for Hillary Clinton’s presidential campaigns in 2016 and 2020. Her email is available at https://web.archive.org/web/20220909192538/https:/www.wikileaks.org/podesta-emails/emailid/8885. For the full story on the registration scheme, see Parker Thayer, “How Charities Secretly Help Win Elections,” Capital Research Center, https://capitalresearch.org/app/uploads/CRC-Voter-Registration-Report.pdf.