Oh No They didn’t…Oh Yes They Did!
From Talking Points Memo and ProPublica!
The conspiracy-peddling nonprofit made loans to founder Catherine Engelbrecht and issued contracts to longtime director Gregg Phillips that may have violated state and federal law, a watchdog complaint filed with the IRS alleges.
Conservative activists Catherine Engelbrecht and Gregg Phillips used the nonprofit True the Vote to enrich themselves, according to a complaint filed to the IRS.
On Monday, the nonprofit watchdog group Campaign for Accountability called for an investigation into True the Vote, which has made repeated false claims about voter fraud in elections. The complaint said True the Vote may have violated state and federal law when the charity used donations to issue loans to Engelbrecht, its founder, and lucrative contracts to Gregg Phillips, a longtime director. The organization also failed to disclose the payments to insiders in its tax returns, including excessive legal bills paid to its general counsel at the time, who filed election-related lawsuits in four states, the complaint said.
“Such disclosure lapses heighten suspicion regarding whether True the Vote and or its current or former officers and directors intended to conceal the payments from the public or IRS,” the complaint said. The self-dealing contracts and loans were first reported by Reveal.
Engelbrecht started Texas-based True the Vote in 2010 after getting involved in Tea Party activism in the Houston area. Over the years, she and Phillips have promoted probes into voter fraud in their fundraising efforts, but they have failed to deliver evidence of such activity for years. The pair catapulted to national prominence when conservative provocateur Dinesh D’Souza featured the nonprofit’s discredited work in the film “2,000 Mules,” which played in theaters across the country.
Engelbrecht and Phillips have defended their voting work, and their attorney has previously said there was nothing wrong about the loans and contracts. True the Vote’s attorneys, Engelbrecht and Phillips did not respond to requests for comment.
The federal government allows nonprofit organizations to operate tax-free, and in return they are required to disclose substantial information about their finances to make sure donor funds are used appropriately. Charities like True the Vote are also not allowed to engage in certain political activity.
“I hope that the IRS and other applicable authorities take seriously what appears to be a pattern of bad behavior by Catherine Engelbrecht and Gregg Phillips, and that makes the pursuit of accountability that much more important,” said Michelle Kuppersmith, executive director of Campaign for Accountability. The organization previously filed a separate complaint in 2020 about True the Vote engaging in political activity with Georgia’s Republican Party. The IRS did not respond to that complaint.
The group’s legal woes have mounted following the D’Souza movie. A Georgia voter sued the pair and D’Souza for defamation because he said he was wrongfully accused of committing voter fraud. The case is pending. A state investigation found the voter was dropping off ballots for himself and family members, which is legal. Former Arizona Attorney General Mark Brnovich’s office asked federal authorities to investigate True the Vote’s finances after Engelbrecht and Phillips did not produce purported evidence on voter fraud to investigators in 2022.
James Bopp Jr., the former general counsel, is now suing True the Vote in federal court for breach of contract for nearly $1 million in unpaid legal bills dating back several years, according to court records obtained by ProPublica. True the Vote has countersued Bopp’s law firm, denying the unpaid invoices and accusing it of engaging in fraud and substandard lawyering, the records show.
In an interview with ProPublica, Bopp said that True the Vote’s counterclaim has no merits. “We were shocked they responded this way. They did nothing but praise our work,” he said. “This is what unscrupulous people will do when they try to avoid the repayment of debt.”
In January, ProPublica and The Dallas Morning News reported Engelbrecht and Phillips created another charity, the Freedom Hospital. It aimed to help children and elderly people affected by the war in Ukraine with medical care. Its website, which has since been taken down, said it raised halfway to $25 million for a mobile hospital. ProPublica and the News found the effort never materialized. Attorneys for Engelbrecht and Phillips said that it was a good-faith effort and that his clients only raised $268 for the project through PayPal. Lawyers said donations were returned “at Mr. Phillips’ direction.”
In its most recently available tax return, True the Vote in 2021 raised about $1.7 million but fell $289,157 into the red. The 2021 return no longer includes Phillips as a director. In 2020, the organization raised $5 million. For 2019, the organization had given a reporter and the IRS two widely different tax returns that were riddled with inconsistencies over key questions about governance and Engelbrecht’s $113,000 loan. At the time, True the Vote said it planned to file an amended return. It does not appear to have been filed with the IRS.
