Several tax-exempt organizations linked to right-wing legal activist Leonard Leo appear to have funneled more than $73 million to his for-profit firms the BH Group and CRC Advisors, according to a complaint filed this week by the nonprofit watchdog group Campaign for Accountability.
The complaint calls for an investigation into whether the seven Leo-affiliated nonprofits have diverted substantial portions of their income and assets, directly or indirectly, to the personal benefit of Leo, who helped engineer the right-wing takeover of the Supreme Court.
As former President Donald Trump's adviser on judicial nominations, Leo helped build the Supreme Court's conservative supermajority, and in the meantime, also grew his personal wealth substantially.
"People should be concerned when one person has such an extraordinary influence on who becomes a justice appointed for life on our Supreme Court and they should also be concerned about the personal political agenda of a person and anyone who would have such a role, and Leonard Leo has that singular role," said Lisa Graves, the executive director of the watchdog group True North Research, which tracks dark money.
CfA's complaint concludes that Leo "caused" several recently formed non-profits "to pay him (directly or indirectly) more than $73 million over a six-year period from 2016 through 2021."
The non-profits include the Rule of Law Trust, 85 Fund, Concord Fund, Federalist Society for Law & Public Policy Studies, Freedom and Opportunity Fund, Wellspring Committee and Marble Freedom Trust.
Although the Leo-affiliated nonprofits have made millions of dollars in payments to Leo's for-profit businesses, such as BH Group, the complaint says, the details of each transaction, such as contracts for consulting or public relations services, are not publicly available.
"We are still waiting to understand what services were rendered by these for-profit companies to the nonprofits," said Michelle Kuppersmith, executive director of Campaign for Accountability. "$73 million is a whole lot of money to flow through nonprofits."
Some evidence, according to the complaint, suggests that Leo's for-profit businesses, BH Group and CRC Advisors, which received millions of dollars for alleged consulting, "may have either not have provided those services at all or may have provided services at a level not commensurate with the payments received."
"The important thing here is that these types of organizations are not supposed to be laundromats for for-profit companies," Kuppersmith said.
Leo, whose funders have long remained a mystery, saw his own personal wealth grow when his fundraising prowess accelerated after he was tapped as an unpaid adviser to Trump on Supreme Court justices, Politico reported last month.
Operating as an unofficial judicial adviser to Trump and not a government employee, Leo wasn't required to fill out the standard financial disclosures that employees of the White House are, Graves said.
"Those financial disclosures are designed to detect potential conflicts of interest, tell you where someone is getting a substantial increase in assets while they're performing government service," Graves explained.
As Leo counseled Trump on judicial picks, he and his allies raised money for nonprofits that under IRS rules do not have to disclose their donors, The Washington Post reported.
A network of nonprofits, funded mostly by anonymous donors, poured in millions of dollars in donations to promote conservative judges and causes.
Leo's list of potential Supreme Court nominees, which included Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett, helped Trump secure conservative and evangelical voters. All three voted to overturn the Roe v. Wade ruling protecting abortion rights nationwide.
Prior to Trump's victory in 2016, Leo served as the vice president of The Federalist Society, an influential nonprofit organization, through which he helped advise Republican presidents on the selection of Supreme Court justices. During that period, he maintained a largely middle-class lifestyle.
But once he took on the role of Trump's "judge whisperer," Leo's wealth skyrocketed, allowing him to accumulate "two new mansions in Maine, four new cars, private school tuition for his children, hundreds of thousands of dollars in donations to Catholic causes and a wine buyer and locker at Morton's Steakhouse," according to Politico's review of public records.
One day before the Senate took a procedural vote to move forward on Kavanaugh's nomination, Leo bought a $3.3 million mansion in Mount Desert, Maine, according to Politico.
"If someone who was playing such a singular role in who gets on the court is suddenly becoming very wealthy, acquiring huge assets, that raises all sorts of red flags," Graves said. "Who has been paying him? What are his sources of income? How did he come into that much money in such a crucial time in the history of the Supreme Court?"
Making this information transparent to the American people is vital, Graves argued, adding that citizens should know who is playing such a significant role in trying to influence the outcome of the law and the donors that are backing him.
Most recently, Leo's Marble Freedom Trust received a $1.6 billion donation from a single donor to promote conservative causes ahead of last year's midterm elections.
Leo defended the influx of money, telling The Post it was "high time for the conservative movement to be among the ranks of George Soros, Hansjörg Wyss, Arabella Advisors and other left-wing philanthropists, going toe-to-toe in the fight to defend our constitution and its ideals."
CfA is urging the IRS to investigate Leo's activities as well as BH Group, CRC Advisors, and other Leo-affiliated nonprofits to see if the services rendered by the groups were for the public good or just "a way of passing money through tax-exempt organizations," Kuppersmith said.
"We always say that sunlight is the most effective disinfectant and it's really important that we make sure that that example is set," Kuppersmith added. "Here is a place where dark money is flowing freely… We want Leonard Leo or anyone that is engaged in behavior like this to know that you're being watched."
