Foreign Money in Federal and State Elections

Scott Walter’s Testimony Before the Texas Senate Committee on State Affairs
Written Testimony: text (below)
Oral Testimony: video
Texas Senate website (about 1:20:41)

Testimony

To the
Texas Senate Committee on State Affairs
Senator Bryan Hughes, chairman

Scott Walter
President, Capital Research Center

May 29, 2024

Chairman Hughes, Vice Chair Paxton, distinguished members of the Committee, thank you for the honor of testifying. I’m president of the Capital Research Center, where for decades we have studied the nonprofit world and its connections to politics.

I have testified to a number of state legislatures on efforts by nonprofits to influence elections and undermine election integrity, and I have also testified to multiple committees in the U.S. Congress on these dangers.[1]

I applaud the Texas legislature’s prior efforts to prevent election abuses such as the infamous “Zuck bucks” monies that plagued the 2020 election. I would like to survey several areas that deserve additional vigilance and especially urge you to consider further investigation into these nonprofits’ work to influence Lone Star state elections.

Foreign Money in Elections

An overwhelming majority of Americans want foreign money kept out of our elections, and existing federal and state laws partially bar this outrageous intrusion, but loopholes remain, and abuses continue. That explains why in other states, too, pressure is growing to close those loopholes.[2] The most notable abuse I know of involves the Swiss foreign national Hansjörg Wyss, the billionaire who funds the Wyss Foundation[3] and its connected 501(c)(4) “dark money” nonprofit, the Berger Action Fund.[4] According to a biography of Wyss written by his sister, his goal is to “(re)interpret the American Constitution in the light of progressive politics,” a shocking aim for a man who told a newspaper he “never felt the need to become an American.”[5] But he has become, as the Associated Press reports, “a Democratic-aligned megadonor.”[6] He has told the foreign-language press that he has “supported senators,”[7] and Federal Election Commission records document that he has contributed over $100,000 in direct donations to candidates, an unambiguous illegality though it was not caught before the statute of limitations expired.[8]

Americans for Public Trust has produced two disturbing reports on Wyss, one on his giving to state and local ballot initiatives and one more generally on his giving to influence American laws and elections, which totals a staggering half-billion dollars.[9] Both reports document how so much of Wyss’s funding flows from his private foundation and nonprofit into the massive “dark money” network operated by Arabella Advisors. Arabella’s partisan stance is indisputable. Even left-leaning news outlets report this fact. For instance, The Atlantic profiled Arabella under this headline: “Over the past half decade, Democrats have quietly pulled ahead of Republicans in untraceable political spending. One group helped make it happen.”[10] The New York Times reports Arabella “has funneled hundreds of millions of dollars through a daisy chain of groups supporting Democrats and progressive causes.”[11]

Of all of Arabella’s parts, the most politically active is the 1630 Fund, a 501(c)(4) “dark money” group that has received $243 million from Wyss’s (c)(4) group, as Americans for Public Trust report.[12] The 1630 Fund has spent millions of dollars in Texas in recent years, including to oppose a local Austin ballot proposition that would have strengthened the police force.[13] Other recent 1630 Fund outlays in Texas include

2022:

• $115,000 to the Caldwell Hays Examiner, a 501(c)(4) activist group posing as a news outlet, which receives nearly all its funding from 1630. The Caldwell/Hays Examiner sued Caldwell County in 2023.
• $200,000 to Annie’s List, whose mission is “electing progressive women in Texas.” This group also received $75,000 in 2021 and $25,000 in 2020.
• $312,000 to Avow, which backs abortion in Texas. The group also received $225,000 in 2021.
• $45,000 to Blue Horizon Texas, a 501(c)(4) group that openly credits the Rural Democracy Initiative (a 1630 Fund project) with its $45,000 in initial seed funding. Their mission is to “Build a candidate pipeline to ensure voters in rural Texas have a choice of candidates for every local and state office.”
• $160,000 to Lupe Votes, a sibling organization of La Unión del Pueblo Entero (LUPE), whose main 2024 activity appears to be endorsing the candidate Ruben Cortez in the primary for Texas State House Seat 37. The 1630 Fund provided a large share of LUPE’s total funding.
• $50,000 to the Deeds Action Fund, which also received $50,000 in 2021. This 501(c)(4) group and its sister 501(c)(3) group, Deeds Not Words, claim to fight for “gender justice.” They boast of “a presence in 17 college and high school chapters,” with a focus “on fostering inclusive and intersectional power to advance gender equity and dismantle systems of white supremacy and toxic masculinity.”
• $150,000 to One APIA Texas, which organizes Asian voters.
• $50,000 to Texas Blue Action Fund, which says it’s “on a mission to expand the electorate and build long-term sustainable Democratic organizing infrastructure in Texas.”
• $75,000 to Texas Freedom Network, which opposes school choice. The group also received $75,000 in 2021.

2021

• $200,000 to Mexican American Legislative Policy Counsel, based in Austin.
• $575,000 to Move Texas Action Fund, which claims to be “one of the most effective voter registration and engagement groups in the state.”
• $15,000 to Texas Impact, an interfaith organizing group.

Of course, a “dark money” group based in Washington, D.C., may legally fund this kind of partisan work in Texas, but it should only do so with entirely American funds, not hundreds of millions from foreign billionaires. I urge you to investigate the 1630 Fund and the Wyss nonprofits that so liberally fund it. They have claimed to reporters that Wyss’s money is kept apart from such election-oriented work, but even to friendly reporters they have provided no evidence for the claim.[14]

Note that Arabella’s network has also sent additional millions into Texas via its 501(c)(3) New Venture Fund and its 501(c)(4) North Fund. For example,

New Venture Fund

• $210,000 to Houston in Action, a generic left-leaning organizer group.
• $300,000 to OCA Greater Houston, an Asian organizing and advocacy group.
• $225,000 to Texas Equal Access Fund for abortion support.
• $25,000 to Texas Gun Sense.
• $150,000 to Texas Organizing Project Education Fund, the (c)(3) arm of a (c)(4) group that aims to “transform Texas” by electing left-wing candidates in Dallas, Harris, and Bexar counties.

“Charities” Operating Partisan Voter Turnout Campaigns

Another significant challenge to election integrity involves 501(c)(3) public charities that violate legal prohibitions against partisan election work. This has been a prominent abuse on the left for over a decade. Liberal journalist Sasha Issenberg, in his acclaimed 2013 book The Victory Lab: The Secret Science of Winning Campaigns, reported on the partisan nature of one such group, the Voter Participation Center: “Even though the group was officially nonpartisan, for tax purposes, there was no secret that the goal of all its efforts was to generate new votes for Democrats.”[15]

Unfortunately, the Voter Participation Center has made grants to Texas “charities.” For example, in 2020 the Voter Participation Center gave the Barbara Jordan Institute $250,000 for “DIGITAL AND TEXT VOTER EDUCATION PROGRAM.” The same year, it gave the Organization of Chinese Americans of Greater Houston $100,000 to support their “2020 VOTER EDUCATION PROGRAM.”[16] Adding insult to injury, the group demanded in 2021 that Gov. Abbott veto the legislature’s “anti-voter bill” passed in the special session, because it “bans drive-through and 24-hour voting and places limits on vote-by-mail.”[17] The Center’s partisan schemes rely on the lack of such election-integrity measures to operate.[18] That’s why a Super PAC founded by the mother of Democratic megadonor Sam Bankman-Fried urged donors in a secret 2020 strategy memo to give to the Voter Participation Center and two other left-wing nonprofits, because the nonprofits’ microtargeted efforts were the “single most effective tactic for ensuring Democratic victories.”[19]

The same Super PAC’s 2024 strategy memo also leaked, but it recommends Democratic donors only give to the third of the 2020 memo’s endorsed grantees, namely, the Voter Registration Project.[20] My colleagues have a thorough report on this “charity” and its illicit partisan work.[21] In the 2020 elections, the Project did not target Texas, but as a job listing indicates, Texas is a target state for the Project’s 2024 campaign.[22]

As our report documents, the Voter Registration Project deserves intense scrutiny for its apparent disregard of the law forbidding charities from operating as partisan voter turnout campaigns. America has no shortage of noncharitable groups that may properly engage in partisan turnout operations, but “charities” betray their entire reason for being if they step into those partisan waters.

Private Funding of Election Administration

Another abuse of the electoral process by “charities” is the private funding of government election offices. The most notorious case of this involved the hundreds of millions of so-called “Zuck Bucks” in the 2020 election. Roughly $350 million of the Zuckerbergs’ 420 million Zuck Bucks passed through the 501(c)(3) Center for Tech & Civic Life. The Center received an additional $25 million from the Arabella “dark money” network,[23] a fact that alone should settle the question of whether this, too, was a partisan operation. In addition, the Center was founded, and is still led, by three political operatives who previously worked together at the New Organizing Institute, a 501(c)(4) political nonprofit described by the Washington Post as, “the Democratic Party’s Hogwarts for digital wizardry.”[24]

Above all, there is the rank partisanship of the Center’s donations, especially clear in the case of Texas. By my colleagues’ calculations from the Center’s IRS filing, it sent nearly $39 million into 97 local government election offices across Texas in 2020. A whopping 94 percent of the money went to jurisdictions won by President Biden. All ten of the largest grants went to those jurisdictions. Of the 15 grants of $100,000 or more, 12 went to Biden jurisdictions. Most egregious of all is the disproportion in the per capita rate of giving: the average per capita funding of jurisdictions won by Donald Trump was 93 cents, while the average for jurisdictions Biden won was more than double, running $2 a person.[25] The discrepancy is even larger in the 15 counties most affected by the Center’s money—i.e., those receiving $100,000 or more: Trump counties’ per capita funding here was 75 cents, compared to triple that—$2.31—for Biden’s counties.

The Center and all its dealings with those large counties deserve thorough scrutiny, especially given known controversies surrounding its giving in Louisiana,[26] Wisconsin,[27] and Pennsylvania.[28] Its re-branded work under the name, “Alliance for Election Excellence,”[29] is not, to my knowledge, active in Texas, but you should be on guard. The Alliance’s efforts to manipulate elections have been documented in a report from the Honest Elections Project.[30]

The Threat of “Biden Bucks”

President Biden’s Executive Order 14019, “Promoting Access to Voting,” is another example of improper collusion between nonprofits and government, aimed at manipulating elections by ordering federal agencies to boost turnout and weaken election integrity. For example, it encourages finding “ways to provide access to voter registration services and vote-by-mail ballot applications.” The order appears clearly to have been prompted by yet another “charity—the left-wing Demos think tank—aiming for partisan turnout results, as the Heritage Foundation’s Oversight Project and others have observed.[31] The Oversight Project’s May 16, 2024, memo on the order details numerous federal agencies involved and also the entirely left-leaning, Democratic-aligned nonprofits with which the Biden Administration has collaborated.[32]

Media reports confirm the threat. For instance, the Washington Examiner’s recent report, “Inside the left-wing dark money voter turnout operation targeting vulnerable patients,” documents how federally funded health centers have partnered with the “charity” Vot-ER to register vulnerable patients.[33] Vot-ER has received funding from Arabella’s network.[34] Its website claims it works with 14 centers in Texas, including Baylor College of Medicine, Lone Star Family Health Center, and Project Vida.[35]

All of this and more deserves investigation and documentation if the Lone Star state is to maintain elections in which it is easy to vote but hard to cheat.

Appendix

Center for Tech & Civic Life Grants to Texas in 2020

See Appendix.

Notes

[1] Some of my testimonies are available at https://capitalresearch.org/article/scott-walter-testifies-about-foreign-money-in-american-politics-before/; https://capitalresearch.org/article/scott-walter-testifies-to-committee-on-house-administration/; https://capitalresearch.org/article/scott-walter-testifies-to-a-senate-finance-subcommittee-on-the-political-activities-of-tax-exempt-entities/; https://capitalresearch.org/article/election-irregularities-involving-ctcl-scott-walter-testifies-before-arizona-house-committee/; https://capitalresearch.org/article/scott-walter-testifies-before-the-arizona-senate/; https://capitalresearch.org/article/election-irregularities-involving-crcl-scott-walter-testifies-before-georgia-senate-subcommittee/; https://capitalresearch.org/article/should-pennsylvanias-elections-be-privatized/; https://capitalresearch.org/article/virginia-moves-closer-to-banning-zuck-bucks-after-scott-walters-testimony/; https://capitalresearch.org/article/the-left-wing-megadonors-pushing-for-ranked-choice-voting/; https://capitalresearch.org/article/scott-walters-testimony-on-ranked-choice-voting-to-the-ohio-state-senate/.

[2] https://thefederalist.com/2024/05/10/pressure-grows-for-ohio-speaker-to-advance-bill-keeping-foreign-cash-out-of-elections/.

[3] https://www.influencewatch.org/non-profit/wyss-foundation/.

[4] https://www.influencewatch.org/non-profit/berger-action-fund/.

[5] Wyss, Hedi, Hansjörg Wyss – My Brother, eFeF–Verlag Wettingen, 2014, p. 50. Müller, Giorgio V., “We Have Found A Good Home for Synthes,” Neue Zürcher Zeitung, June 11, 2011.

[6] 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.

[7] See the article by Mūller cired earlier (https://www.nzz.ch/wir_haben_ein_gutes_heim_fuer_synthes_gefunden-ld.589550). In Google’s translation, Wyss says of his time in America during the Geoge W. Bush administration, “I already had three foundations and supported senators.”

[8] https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Wyss%2C+Hansjoerg&contributor_name=Wyss%2C+Hansjorg.

[9] https://americansforpublictrust.org/wp-content/uploads/2024/04/APT_1630_Ballot_Spending_Report_FINAL.pdf; https://americansforpublictrust.org/news/report-left-wing-swiss-billionaire-exploiting-the-foreign-influence-loophole/.

[10] Green, Emma. “The Massive Progressive Dark-Money Group You’ve Never Heard Of: Over the past half decade, Democrats have quietly pulled ahead of Republicans in untraceable political spending. One group helped make it happen.” The Atlantic, November 2, 2021. https://www.theatlantic.com/politics/archive/2021/11/arabellaadvisors-money-democrats/620553/.

[11] Vogel, Kenneth P. and Robertson, Katie. “Top Bidder for Tribune Newspapers Is an Influential Liberal Donor.” New York Times, April 13, 2021. https://www.nytimes.com/2021/04/13/business/media/wyss-tribune-company-buyer.html.

[12] https://americansforpublictrust.org/wp-content/uploads/2024/04/APT_1630_Ballot_Spending_Report_FINAL.pdf.

[13] Ballotpedia reports the 2021 Proposition A was designed to “establish minimum police staffing and require there to be at least two police officers for every 1,000 residents of Austin; add an additional 40 hours of police training each year on topics such as active shooter scenarios, critical thinking, and defensive tactics; and provide police with additional compensation for being proficient in non-English languages, enrolling in cadet mentoring programs, and being recognized for honorable conduct.” https://ballotpedia.org/Austin,_Texas,_Proposition_A,_Police_Policies_on_Minimum_Number_of_Officers,_Training_Requirements,_and_Demographic_Representation_Initiative_(November_2021). The 1630 Fund’s $100,000 grant to Equity PAC to oppose this initiative is on p. 67 of its 2021 IRS filing, https://www.influencewatch.org/app/uploads/2022/11/Sixteen-Thirty-Fund-2021-Form-990.pdf.

[14] https://www.bloomberg.com/news/articles/2024-01-25/meet-the-swiss-billionaire-cast-by-us-conservatives-as-the-new-george-soros.

[15] Sasha Issenberg. The Victory Lab (New York: Crown Publishing, 2013), 305; the group was then operating under a different name.

[16] https://projects.propublica.org/nonprofits/organizations/550889748/202143199349320634/IRS990ScheduleI.

[17] https://www.voterparticipation.org/statement-voter-participation-center-center-for-voter-information-statement-on-texas-legislature-passing-anti-voter-bill/.

[18] See Thayer, Parker, and Ludwig, Hayden, “The Voter Participation Center: A Tax-Exempt Turnout Machine for Democrats,” Capital Research Center, July 13, 2022, https://capitalresearch.org/article/the-voter-participation-center-a-tax-exempt-turnout-machine-for-democrats/.

[19] Schleifer, Theodore, “How Silicon Valley’s Secretive Donor Group Plans to Beat Trump,” Vox, January 7, 2020, https://www.vox.com/recode/2020/1/7/21055340/mind-the-gap-silicon-valley-donors-democrats-2020-plan-140-million.

[20] Schleifer, Teddy, “The Stratosphere,” Puck News, https://puck.news/newsletter_content/sam-i-am-2/.

[21] https://capitalresearch.org/article/report-how-charities-secretly-help-win-elections/.

[22] https://www.influencewatch.org/app/uploads/2023/05/Everybody-Votes-Training-Logistics-Consultant-VRP-job-listing.pdf.

[23] https://www.influencewatch.org/app/uploads/2021/11/new-venture-fund-2020-form-990.pdf.

[24] Brian Fung, “Inside the Democratic Party’s Hogwarts for Digital Wizardry,” Washington Post, July 8, 2014, https://www.washingtonpost.com/news/the-switch/wp/2014/07/08/inside-the-democratic-partys-hogwarts-for-digital-wizardry/.

[25] See the Appendix to this testimony.

[26] https://www.influencewatch.org/non-profit/center-for-tech-and-civic-life/#louisiana-lawsuit-reinstated-2022.

[27] https://www.influencewatch.org/non-profit/center-for-tech-and-civic-life/#potentially-illegal-control-over-elections-in-wisconsin.

[28] https://www.influencewatch.org/non-profit/center-for-tech-and-civic-life/#democratic-leaning-counties-given-a-head-start.

[29] https://www.influencewatch.org/non-profit/u-s-alliance-for-election-excellence/.

[30] https://www.honestelections.org/wp-content/uploads/2023/04/HEP_Alliance-for-Election_EXEC-SUMMARY_v2.pdf.

[31] https://www.demos.org/sites/default/files/2020-12/Executive%20Action%20to%20Advance%20Democracy.pdf.

[32] https://www.heritage.org/the-oversight-project/election-integrity/biden-bucks-executive-order-14019.

[33] https://www.washingtonexaminer.com/news/investigations/2993671/left-wing-dark-money-voter-turnout-patients/.

[34] https://www.influencewatch.org/non-profit/vot-er-a-healthier-democracy/.

[35] https://vot-er.org/map/#texas. `