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Dominion: Powell Raiding Nonprofit     05/16 09:59

   

   (AP) -- Former Trump attorney and self-proclaimed "Kraken releaser" Sidney 
Powell has told prospective donors that her group, Defending the Republic, is a 
legal defense fund to protect the integrity of U.S. elections.

   But the company suing Powell over her baseless claims of a rigged 
presidential election says the true beneficiary of her social welfare 
organization is Powell herself.

   Dominion Voting Systems claims Powell has raided Defending the Republic's 
coffers to pay for personal legal expenses, citing her own remarks from a radio 
interview. The Denver-based voting technology vendor sued Powell and others who 
spread false claims that the company helped steal the 2020 election from Donald 
Trump.

   "Now, Powell seeks to abuse the corporate forms she created for her law firm 
and fundraising website to hide funds that she raised through her defamatory 
campaign, shielding those funds from the very company that was harmed by the 
defamatory campaign," Dominion lawyers wrote in a May 5 court filing.

   The dispute shines a light on how Trump allies continue to support, spread 
and allegedly profit from lies about fraud in the 2020 election. Although the 
election is settled, and all major court challenges have been dismissed, 
Powell's legal defense fund continues to raise money, with help from 
conspiracy-minded supporters like QAnon adherents.

   Her group will receive a cut of proceeds from ticket sales for a Memorial 
Day weekend conference in Dallas called the "For God & Country Patriot 
Roundup," the event's website says. Some leading purveyors of far-right 
conspiracy theories are headliners, including Powell, pro-Trump attorney Lin 
Wood and former national security adviser Michael T. Flynn.

   Event organizer John Sabal, known as "QAnon John" to followers of the QAnon 
conspiracy theory, declined to explain the decision to financially support 
Powell's nonprofit, also known as DTR, but said the money isn't for her 
personal benefit.

   "As far as I know, DTR is benefiting a bunch of different causes. Those I 
will not speak on, but you can talk to her about that," he said.

   Powell didn't respond to interview requests, but one of her attorneys said 
she denies Dominion's accusations. Powell's personal legal bills are covered by 
her malpractice carrier, and her nonprofit has a proper corporate structure 
with a board of directors, said her lawyer, Howard Kleinhendler.

   "She does not have unfettered control over its funds or how the funds are 
spent," Kleinhendler wrote in an email. "DTR intends to comply with all federal 
and state filing requirements when they are due. At that time you as well as 
the rest of the world will see the necessary financials."

   Trump and his allies filed more than 50 lawsuits in multiple states over the 
election and lost at every turn. Powell and Rudy Giuliani were among the 
lawyers behind the cases claiming a conspiracy by Democrats, despite Republican 
state leaders, and Trump's own attorney general and other administration 
officials, publicly stating there was no major election fraud. Powell appeared 
with Giuliani at a press conference and made multiple TV appearances.

   But after Powell threatened to "blow up" Georgia with a "biblical" court 
filing, the Trump legal team distanced itself from her, saying she was not 
working on their behalf. She later made the comment on how she would release 
"the Kraken," an apparent reference to the film "Clash of the Titans" in which 
Zeus gives the order to release the mythical sea monster.

   In a November interview, Powell noted she was not being paid by the Trump 
campaign but "by the people of the United States of America."

   Tickets for the Dallas conference cost $500 for general admission and $1,000 
for VIP passes. The event's website doesn't name other beneficiaries or specify 
how much money goes to Powell's nonprofit. Much of the conference was supposed 
to be held at a complex called Gilley's Dallas, but Sabal said the venue 
canceled his booking after news coverage of the event's QAnon connections.

   QAnon followers believe Trump has been secretly fighting a cabal of 
Satan-worshipping "deep state" enemies, prominent Democrats and Hollywood 
elites operating a child sex trafficking ring.

   Logan Strain, a conspiracy theory researcher who co-hosts the "QAnon 
Anonymous" podcast, said Powell has appeared on QAnon promoters' YouTube 
channels and is viewed as a "hero of the republic" among QAnon followers. It 
wouldn't surprise Strain if Powell is trying to harness the movement as a 
fundraising source.

   "There is a great deal of money to be made in promoting and catering to 
QAnon," he said. "This is why a lot of people suspected it was sort of a 
money-making grift, at least in part, from the beginning."

   Defending the Republic describes itself as a 501(c)4 nonprofit, but it isn't 
listed in an IRS database of tax-exempt organizations. Groups recognized by the 
IRS as a 501(c)(4) are exempt from paying taxes on income, including donations, 
but those donations aren't tax deductible as charitable contributions.

   Powell's website says donors can mail checks to an address in West Palm 
Beach, Florida, that corresponds with a UPS Store. Under the same address, 
Defending the Republic Inc. registered in February with Florida's Division of 
Corporations as a nonprofit formed for "social welfare purposes."

   Records link other leading conspiracy theorists from Trump's orbit to 
Powell's nonprofit. Powell, Wood, Flynn and Flynn's brother, Joseph, were named 
as directors of Defending the Republic in December 2020 filings with the Texas 
secretary of state's office.

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

   "We are not interested in talking to the fake news media," Flynn wrote.

   Wood recalls Powell asking him to serve as a director, but said he hasn't 
done any work on the nonprofit.

   "She didn't follow up with me about it," 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 as a director of Defending the Republic after less than one week 
because he decided to form his own legal defense fund. Lindell is also being 
sued by Dominion.

   "I went on my own because I don't have time for other people's stuff. I want 
to focus on what I'm doing," Lindell said.

   Defending the Republic's chairman and CEO was at one time former Overstock 
CEO Patrick Byrne, whose comments about the "deep state" led to his resignation 
from Overstock in 2019. Byrne says he resigned as Defending the Republic's 
chairman and CEO in April after less than one month in the positions.

   To support its claim that Powell is using nonprofit money for her personal 
legal defense, Dominion cited her remarks during a Dec. 29 appearance on "The 
Rush Limbaugh Show." Powell told the radio show's guest host that listeners 
could go to her website to donate to the nonprofit "that is working to help 
defend all these cases and to defend me now that I'm under a massive attack 
from the attorney general of Michigan and the city of Detroit and everything 
else."

   Michigan's governor, attorney general and secretary of state -- all 
Democrats -- have urged state bar officials in Texas and Michigan to 
permanently disbar Powell for ethical violations over election lawsuits.

   Meanwhile, Eric Coomer, Dominion's security director, has filed a separate 
defamation suit in Colorado against Powell, her law firm, Defending the 
Republic and others. Another voting technology firm, Smartmatic USA Corp., sued 
Powell in New York over her bogus election-fixing claims.

   Wisconsin Gov. Tony Evers, a Democrat, asked a federal court to order Powell 
and other lawyers who challenged Wisconsin's election results to cover $106,000 
in state legal fees. Powell called it a frivolous request. A judge hasn't 
resolved the dispute yet.

   Dominion sued Powell in federal court on Jan. 8, seeking over $1.3 billion 
in damages against her, her law firm and her fundraising website. The company 
claimed Powell treated Defending the Republic "as her personal funds, 
redirecting them to the law firm she controls and dominates ... and raiding 
them to pay for her personal legal defense."

   A nonprofit organized under Section 501(c)(4) of the tax code, as Defending 
the Republic claims to be, can engage in some political activities provided 
that's not its primary activity. Unlike political committees, tax-exempt social 
welfare groups don't have to disclose donors. Forms notifying the IRS of a 
group's intent to operate as a 501(c)(4) aren't public records, according to an 
IRS spokesman.

   Samuel Brunson, a tax law professor at Loyola University in Chicago, said 
the IRS bars 501(c)(4) groups from spending money for the benefit of private 
individuals. Doing that could jeopardize its tax-exempt status, he added.

   "In general, the IRS doesn't police it very closely," Brunson said.

 
 
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