Company: Ex-Trump lawyer raiding nonprofit for personal use | PA Power and Policy – About Your Online Magazine


Former attorney for Trump and self-proclaimed “Kraken Releaser” Sidney Powell told potential donors that his group, Defending the Republic, is a legal defense fund to protect the integrity of US elections.

But the company suing Powell of his unfounded claims of a rigged presidential election, he says that the real beneficiary of his welfare organization is Powell herself.

Dominion Voting Systems claims that Powell broke into Defending the Republic’s vaults to pay personal legal expenses, citing his own observations in a radio interview. The Denver-based voting technology provider sued Powell and others for spreading false allegations that the company helped steal Donald Trump’s 2020 election.

“Now Powell tries to abuse the corporate forms she created for her law firm and fundraising website to hide funds she raised through her libel campaign, protecting those funds from the very company that was harmed by the libel campaign.” Dominion lawyers wrote in a May 5 lawsuit.

The dispute shows how Trump’s allies continue to support, spread and allegedly profit from lies about fraud in the 2020 election. Although the election is resolved and all major legal challenges have been rejected, Powell’s legal defense fund continues to raise money, with the help of conspiracy supporters like QAnon supporters.

Your group will receive a portion of the proceeds from ticket sales to a Memorial Day weekend conference in Dallas called “For God & Country Patriot Roundup,” says the event’s website. Some of the leading providers of far-right conspiracy theories are the main attractions, including pro-Trump lawyer Powell Lin Wood and former national security adviser Michael T. Flynn.

Event organizer John Sabal, known as “QAnon John” by followers of QA not conspiracy theory, declined to explain the decision to financially support Powell’s non-profit organization, also known as DTR, but said the money is not for his personal benefit.

“As far as I know, DTR is benefiting from many different causes. I won’t talk about those, but you can talk to her about it,” he said.

Powell did not respond to requests for an interview, but one of her lawyers said she denies Dominion’s allegations. Powell’s personal legal accounts are covered by his negligence operator, and his nonprofit organization has an adequate corporate structure with a board of directors, said his attorney, Howard Kleinhendler.

“She has no unrestricted control over her funds or how the funds are spent,” Kleinhendler wrote in an email. “DTR intends to comply with all federal and state filing requirements upon expiration. At that point, you and the rest of the world will see the necessary finances. ”

Trump and his allies filed more than 50 lawsuits in several states during the election and lost at every stage. Powell and Rudy Giuliani were among the lawyers behind the cases alleging conspiracy by Democrats, despite state Republican leaders, and Trump’s own attorney general and other government officials, publicly declaring that there was no major electoral fraud. Powell appeared with Giuliani at a press conference and made several TV appearances.

But after Powell threatened to “blow up” Georgia with a “biblical” lawsuit, Trump’s legal team distanced themselves from her, saying she wasn’t working on his behalf. She later commented on how she would release “the Kraken”, an apparent reference to the movie “Clash of the Titans”, in which Zeus gives the order to release the mythical sea monster.

In a November interview, Powell noted that he was not being paid by Trump’s campaign, but “by the people of the United States of America”.

Tickets to the Dallas conference are $500 for general admission and $1,000 for VIP passes. The event website does not name other beneficiaries or specify how much money goes to Powell’s non-profit organization. Much of the conference was to be held at a complex called Gilley’s Dallas, but Sabal said the venue canceled his reservation after press coverage of the event’s QAnon connections.

QAnon’s followers believe Trump has secretly been fighting a conspiracy of “deep state” enemies, Satan worshipers, prominent Democrats and Hollywood elites who operate a child sex trafficking gang.

Logan Strain, a conspiracy theory researcher who co-hosts the “QAnon Anonymous” podcast, said Powell has appeared on QAnon’s YouTube promoters’ channels and is seen as a “republic hero” among QAnon’s followers. It wouldn’t surprise Strain if Powell was trying to harness the movement as a fundraiser.

“There is a lot of money to be made to promote and serve QAnon,” he said. “That’s why a lot of people suspected it was a kind of grift to make money, at least in part, from the beginning.”

Defending the Republic describes itself as a 501(c)4 non-profit organization, but is not listed in an IRS database of tax-exempt organizations. Groups recognized by the IRS as 501(c)(4) are exempt from paying income taxes, including donations, but such donations are not tax-deductible as charitable contributions.

Powell’s website says donors can mail checks to an address in West Palm Beach, Fla., that corresponds to a UPS Store. At the same address, Defending the Republic Inc. registered in February with the Florida Division of Corporations as a non-profit organization formed for “social welfare purposes.”

The records link other conspiracy theorists from Trump’s orbit to Powell’s nonprofit organization. Powell, Wood, Flynn and Flynn’s brother Joseph were named Defending the Republic directors in December 2020 in lawsuits with the Texas Secretary of State’s office.

Joseph Flynn said in a text message that he is no longer a director, but declined to explain why.

“We’re not interested in talking to the fake media,” Flynn wrote.

Wood remembers Powell asking him to serve as a director, but said he didn’t do any work for the nonprofit organization.

“She didn’t accompany me on this,” he said,

Articles of incorporation filed in Florida in February listed MyPillow founder and CEO Mike Lindell as a director. But Lindell said he asked to be removed from the post of Director of Defense for the Republic after less than a week because he decided to form his own legal defense fund. Lindell is also being sued by Dominion.

“I went alone because I don’t have time for other people’s things. I want to focus on what I’m doing,” Lindell said.

Defending the President and CEO of the Republic was the former CEO of Overstock, Patrick Byrne, whose comments about the “deep state” led to his resignation from Overstock in 2019. Byrne says he resigned as president and CEO of Defender of the Republic in April after less than a month in office.

To support his claim that Powell is using nonprofit money for his personal legal defense, Dominion quoted his comments during a Dec. 29 appearance on “The Rush Limbaugh Show.” Powell told the radio show’s guest host that listeners could go to his website to donate to the non-profit organization “which is working to help defend all these cases and defend myself now that I’m under massive attack by the attorney general of Michigan and the city of Detroit and everything else.”

The Michigan governor, attorney general and secretary of state – all Democrats – have urged state attorneys in Texas and Michigan to permanently dismiss Powell for ethical violations in electoral processes.

Meanwhile, Eric Coomer, Dominion’s director of security, has filed a separate Colorado libel suit against Powell, his law firm, Defending the Republic and others. Another voting technology company, Smartmatic USA Corp., sued Powell in New York over his false election-fixing allegations.

Wisconsin Governor Tony Evers, a Democrat, has asked a federal court to order Powell and other attorneys who challenged Wisconsin’s election results to cover $106,000 in state court costs. Powell called this a frivolous request. A judge has not yet resolved the dispute.

Dominion sued Powell in federal court on Jan. 8, seeking more than $1.3 billion in damages against her, her law firm and her fundraising website. The firm claimed that Powell treated the Defense of the Republic “like his personal funds, redirecting them to the law firm that it controls and dominates … and raided them to pay for his personal legal defense.”

A non-profit organization organized in accordance with Section 501(c) (4) of the tax code, as Defend the Republic claims to be, may engage in some political activities, as long as this is not its main activity. Unlike political committees, tax-exempt welfare groups do not need to disclose donors. Forms that notify the IRS of a group’s intent to operate as a 501(c)(4) are not public records, according to an IRS spokesperson.

Samuel Brunson, a professor of tax law at Loyola University in Chicago, said the IRS prohibits 501(c)(4) groups from spending money for the benefit of individuals. That could harm its tax-free status, he added.

“In general, the IRS doesn’t oversee very closely,” Brunson said.

———

This story was first published on May 13, 2021. It was updated on May 15, 2021 to correct a reference to former Overstock CEO Patrick Byrne. While Byrne was president and CEO of Defending the Republic, a nonprofit formed by Sidney Powell, a former attorney for former president Donald Trump, Byrne says he resigned as president and CEO of Defending the Republic in April.

Paula Fonseca