Employment Law Report

Written by Mike N. Fine

On Tuesday, February 10, 2026, the House Committee on Ways and Means held a hearing entitled, “Foreign Influence in American Non-profits: Unmasking Threats from Beijing and Beyond.” The hearing focused on the potential misuse of domestic nonprofit organizations and related structures as vehicles for flowing foreign monies into the United States.

Committee leadership, members, and expert witnesses discussed how certain nonprofit structures – including donor‑advised funds, fiscal sponsorships, and section 501(c)(4) organizations – can be used to obscure the original source of foreign funds. Participants described these structures and raised broader concerns around transparency, compliance, and oversight of tax-exempt organizations.

Examples Flagged by Committee Members

During the hearing, Committee leaders from both sides of the aisle referenced examples of alleged nonprofit misbehavior. Ways and Means Committee Chairman Jason Smith (MO-08) cited several examples in his opening statement, including:

• The Council on American-Islamic Relations (“CAIR”), a Washington, D.C.-based nonprofit organization that functions as a leading American Muslim civil rights organization and oversees a network of affiliated chapter organizations nationwide (in a January 13, 2026 letter, Chairman Smith alleged that CAIR has “suspicious ties” to Hamas);

• The Alliance for Global Justice (“AFGJ”), a Tucson, Arizona-based nonprofit organization about which Chairman Smith has raised concerns for over a year and a half (in a November 20, 2024 letter, Chairman Smith called for the revocation of AFGJ’s tax-exempt status due to its fiscal sponsorship of Samidoun, a Palestinian prisoner solidarity network listed as a terrorist entity by the governments of Germany and Canada and sanctioned by the United States for raising money on behalf of the Popular Front for the Liberation of Palestine (“PFLP”), a Middle East terrorist group);

• The People’s Forum, which was described during the hearing as having received funding from Neville Roy Singham, who was characterized by some witnesses as having ties to the Communist Party of China (“CPC”);

• Groups designated by the U.S. government as terrorist organizations, including the PFLP; and

• The CPC.

Ways and Means Ranking Member Richard Neal (MA-01) referenced organizations with links to President Trump in his opening remarks. Congressman Neal highlighted:

• The Donald Trump Presidential Library Fund, which accepted a $400M donation (i.e., a Boeing aircraft to be used as Air Force One) from Qatar raising conflict of interest and security concerns;

• The Trump‑Vance Inaugural Committee, which received a $5M contribution from a U.S. subsidiary of a Brazilian meatpacking company, circumventing the direct contribution ban[1]; and

• Trust for the National Mall (in connection with the President’s ballroom project).

Members on both sides discussed their respective concerns regarding the role of nonprofit organizations in politically related activities and the extent to which existing disclosure and enforcement mechanisms fail to address those concerns.

Witness Testimony

Five witnesses testified before the Committee:

1. Scott Walter, President of Capital Research Center [testimony]
2. Caitlin Sutherland, Executive Director, Americans for Public Trust [testimony]
3. Adam Sohn, Co-Founder, NCRI and CEO, Narravance [testimony];
4. Robert Weissman, Co-President of Public Citizen [testimony]; and
5. Bruce G. Dubinsky, Founder of Dubinsky Consulting [testimony].

Their testimonies reveal evidence that foreign donors were using complex networks of section 501(c)(3) and section 501(c)(4) organizations to create “dark money” channels, which obscure the money’s origins. They identified potential points for structural reforms – something both sides acknowledge is needed given the existing vulnerabilities. Highlights of policy suggestions include:

• Mr. Dubinsky, a forensic accountant, who called for more granular disclosure and data‑driven oversight (e.g., clearer reporting on foreign‑origin funds, pass‑through structures, and 501(c)(4) election activity), creating potential bipartisan lanes on transparency—even if each political party prioritizes different “bad actors.”

• Dubinsky recommended revising Form 990 to require clearer disclosures about foreign funding, fiscal sponsorships, pass‑through grants, and donor‑advised funds.

• He suggested using data analytics and AI to help the IRS detect patterns of risk without burdening compliant charities.

• Mr. Weissman (Public Citizen), who added some specific remedies:

• Pass the “Democracy Is Strengthened by Casting Light on Spending in Elections Act” or DISCLOSE Act, to force donor transparency for 501(c)(4)s engaged in election activity and to shut foreign‑money pathways:

• The legislation would require section 501(c)(4)’s engaged in election activity to disclose their funders above $10,000 – notwithstanding Americans for Prosperity Foundation v. Bonta – and would eliminate loopholes that enable foreign money to flow into U.S. elections.

• Tighten and consistently enforce the Foreign Agents Registration Act (“FARA”):

• FARA requires those acting as an “agent of a foreign principal” to register with the Justice Department and disclose their activities if they engage in “political activities.”

Compliance Considerations

Based on the hearing, nonprofit, tax-exempt organizations should heed this reminder of existing laws and regulations restricting their involvement in election activity and inappropriate acceptance of foreign influence. Such organizations should be aware of these laws and regulations and work with legal counsel to comply with them. The hearing also highlighted ongoing lawmakers’ concerns about, and attention to, nonprofit funding structures and donor disclosure. Nonprofit, tax-exempt organizations should expect continued focus from the primary tax-writing committee in the U.S. House of Representatives on transparency and reporting of foreign influence.

[1] Federal campaign finance law and related regulations prohibit a foreign national from contributing, directly or through any other person, or an expenditure in connection with an election to any political office. In addition, it is unlawful to solicit, accept, or receive a contribution from a foreign national. See 2 U.S.C. §441e(a); 11 CFR 110.4(a)(1)-(3).

As defined in the Federal Election Campaign Act of 1971, the term “person” includes a corporation. 2 U.S.C. §431(11).