Days after the Southern Poverty Law Center was federally indicted for allegedly sending millions to the Ku Klux Klan, Aryan Nations, and the American Nazi Party, the Treasury Department announced it’s tightening IRS reporting rules to expose how nonprofits actually spend their money.
Treasury Secretary Scott Bessent said the changes to IRS Form 990 are aimed squarely at so-called “dark money” arrangements that let organizations hide financial flows behind shell entities and vague descriptions.
“Public money and tax-exempt status demand public accountability,” Bessent wrote. “We are ending the days of hiding fraud, abuse and extremist activity behind complicated nonprofit arrangements.”
“When bad actors misuse charitable structures, directors and officers should understand that transparency can lead to scrutiny, accountability and liability under the law,” he added.
The SPLC indictment dropped Tuesday. Acting Attorney General Todd Blanche announced it at a DOJ news conference, saying the organization had been lying to its donors for years.
“The SPLC was doing the exact opposite of what it told its donors it was doing, not dismantling extremism but funding it,” Blanche said.
Federal prosecutors allege payments got routed through fraudulent front entities. Two of the shells named in the case: “Fox Photography” and “Rare Books Warehouse.” Neither has anything to do with what the SPLC publicly claimed to be doing. Under current Form 990 rules, nonprofits aren’t required to disclose who’s actually receiving money when it flows through arrangements like this, and that’s precisely the gap Treasury says it’s closing.
FBI Director Kash Patel praised the indictment. “This is an important case brought by President Trump’s administration, and we’re thankful to the president for his leadership and funding of not just the FBI and DOJ, but his commitment to go out there and wipe out fraud, conspiracy, and waste and abuse wherever it occurs, including the Southern Poverty Law Center,” he said Tuesday.
The SPLC isn’t going down quietly. Interim president and CEO Bryan Fair released a video statement claiming the payments were part of a paid informant program to gather intelligence inside extremist organizations. “While we no longer work with paid informants, we continue to take their safety seriously. These individuals risked their lives to infiltrate and inform on the activities of our nation’s most radical and violent extremist groups,” Fair said.
He also accused the administration of using the case to attack civil rights work broadly. “The federal government has been weaponized to dismantle the rights of our nation’s most vulnerable people,” Fair said.
The SPLC posted roughly $129 million in revenue in fiscal year 2024 and sat on nearly $800 million in total assets at the time of the indictment.
Under the Treasury’s proposed Form 990 changes, nonprofits would need to clearly identify who controls funds and where money ends up, rather than hiding payments inside opaque “sponsorship arrangements.” The administration says the SPLC case shows exactly why current disclosure rules aren’t working: prosecutors allege the group exploited existing loopholes to pay groups it publicly claimed to be fighting.
