Sidney Powell’s Defending the Republic raised more than $14 million as she spread election falsehoods
By Emma Brown, Rosalind S. Helderman, Isaac Stanley-Becker and Josh Dawsey,
Elijah Nouvelage Reuters
In the months after President Donald Trump lost the November election, lawyer Sidney Powell raised large sums from donors inspired by her fight to reverse the outcome of the vote. But by April, questions about where the money was going — and how much there was — were helping to sow division between Powell and other leaders of her new nonprofit, Defending the Republic.
On April 9, many members of the staff and board resigned, documents show. Among those who departed after just days on the job was Chief Financial Officer Robert Weaver, who in a memo at the time wrote that he had “no way of knowing the true financial position” of Defending the Republic because some of its bank accounts were off limits even to him.
Records reviewed by The Washington Post show that Defending the Republic raised more than $14 million, a sum that reveals the reach and resonance of one of the most visible efforts to fundraise using baseless claims about the 2020 election. Previously unreported records also detail acrimony between Powell and her top lieutenants over how the money — now a focus of inquiries by federal prosecutors and Congress — was being handled.
The split has left Powell, who once had Trump’s ear, isolated from other key figures in the election-denier movement. Even so, as head of Defending the Republic, she controlled $9 million as recently as this summer, according to an audited financial statement from the group. The mistrust of U.S. elections that she and her former allies stoked endures. Polls show that one-third of Americans — including a majority of Republicans — believe that Trump lost because of fraud.
Matt Masterson, a former senior U.S. cybersecurity official who tracked 2020 election integrity for the Department of Homeland Security, said Powell’s fundraising success demonstrates one reason so many people continue to spread falsehoods about the 2020 election: It can bring in cash.
“Business is good and accountability is low, which means we’re just going to see continued use of this playbook,” Masterson said. “Well-meaning folks that have been told that the election was stolen are giving out money that they might not otherwise be able to give.”
[For Trump advocate Sidney Powell, a playbook steeped in conspiracy theories]
Last week, The Post reported that federal prosecutors have subpoenaed financial and other documents related to Defending the Republic and a political action committee by the same name, also headed by Powell. The House select committee investigating the Jan. 6 insurrection sees Powell as a leading beneficiary of election-related falsehoods and has been seeking to determine how much money she raised, said a person familiar with the committee’s work who spoke on the condition of anonymity to discuss confidential conversations.
The group’s financial statement, publicly filed last month in Florida, shows the organization raised $14.9 million between Dec. 1, 2020, and July 31. Of that, it spent about $5.6 million, mostly on legal fees and unspecified awards and grants. It gave $550,000 to help fund the Republican-commissioned ballot review in Arizona, according to a separate accounting by the contractor that led the review.
The group’s assets at the end of that period included nearly $5.3 million in cash and $4 million in mutual funds, the audit says.
The report did not cover the period before Defending the Republic was officially established on Dec. 1. It remains unclear how much Powell, who began urging donations to her cause as early as Nov. 10, may have raised in those first weeks and whether that money was eventually transferred to Defending the Republic.
It is also not clear who, other than Powell, is now running Defending the Republic. Powell and a lawyer for the organization, Howard Kleinhendler, declined to answer detailed questions for this report.
“Defending The Republic is pleased that its audited financials clearly refute and put to rest previously reported allegations of financial impropriety,” Kleinhendler said in a statement to The Post. “Defending The Republic will continue to focus on its important work for #WeThePeople.”
Manuel Balce Ceneta
AP
Michael Flynn, former national security adviser for President Donald Trump, leaves D.C. federal court with his lawyer Sidney Powell, left, in 2019.
‘The president was fascinated’
Powell, a 66-year-old former federal prosecutor from Dallas, first gained celebrity among Trump supporters for representing Michael Flynn, the Trump national security adviser who was charged with lying to the FBI in the Russia investigation. Flynn was ultimately pardoned by Trump.
But after the election, Powell amassed legions of new followers — in two months more than doubling her Twitter following, to 1.3 million — by alleging a vast and fantastical election-fraud conspiracy involving China, Venezuela and secret algorithms inside machines made by Denver-based Dominion Voting Systems.
Trump watched as she repeated those claims on television, said Michael Pillsbury, an informal Trump adviser at the time who was asked to research some of Powell’s allegations. “The president was fascinated,” Pillsbury told The Post. “How could you not be? It just wasn’t true.”
Powell’s wild claims, and the series of lawsuits she promised to file to block Joe Biden’s victory in battleground states, gave Trump a way to believe he could still win, Pillsbury said. And her perceived closeness with the president — at one point, he tweeted that she was part of a “truly great team” of his lawyers — helped to burnish Powell’s credibility with donors. (Trump’s attorneys would later say Powell was acting on her own and not as part of their team.)
http://www.washingtonpost.com/video/politics/the-false-election-claims-cited-in-dominions-fox-news-lawsuit/2021/03/26/4471b208-2ddd-4209-b40e-775ed1a80b80_video.html
A week after the Nov. 3 election, Powell appeared on Fox Business Network’s “Lou Dobbs Tonight” and asked supporters to send money via a new website, defendingtherepublic.org.
At the time, there was no formal organization called “Defending the Republic.” Instead, according to an archived version of the site, it redirected to ldfftar.org, the site for Legal Defense Fund for the American Republic. There, visitors were urged to donate to that group to help Powell “block the certification of the election results so that justice can be done.”
A business using the acronym in that Web address was registered that same day in Delaware and applied to the IRS soon after for nonprofit tax status as a 501(c)4 social welfare organization. Such groups may not make politics their primary focus. The president of that business, Robert Matheson, did not respond to requests for comment.
By Nov. 25 — the day Powell filed the first two of her election-fraud lawsuits in battleground states, in Michigan and Georgia — her own website was live, an archived version shows. It indicated to donors that their money would go to a “legal defense fund” with 501(c)4 nonprofit status. Donors were asked to make checks payable to Sidney Powell P.C., Powell’s law firm.
It was not until Dec. 1, in Texas, that Defending the Republic was incorporated as a business, according to state records. Powell was listed as its agent and as a director, and Flynn and his brother Joseph were added as directors later that month.
Soon, Powell’s lawsuits were flopping, rejected by a series of judges.
Nonetheless, her star remained ascendant. Powell, Michael Flynn and Patrick Byrne — the wealthy founder of online retail giant Overstock — participated in a meeting in the Oval Office on Dec. 18 in which they tried to persuade Trump to appoint her as a special counsel to investigate the election. Trump considered the move but ultimately decided against it, according to previous reports.
Two days after the Jan. 6 siege of the Capitol, Dominion filed a $1.3 billion lawsuit against Powell and Defending the Republic. Dominion argued that she had defamed the company by claiming its voting machines were manipulated to elect Biden.
Powell was raising money during that period by saying donations were needed not just to advance her election-related litigation but also to help defend herself from the legal onslaught.
In late February, a new Defending the Republic was incorporated in Florida.
Mike Lindell, the MyPillow founder who had become a leading voice claiming election fraud, was listed in corporate documents as a director of the Florida-based entity. As soon as he found out, he asked to be removed, he told The Post in an interview.
“They had talked to me in the beginning, and I said, ‘No, I’m doing my own thing,’ ” he said.
Steven Ferdman
Getty Images
Patrick Byrne, the founder of Overstock, seen in 2019.
Mass resignation
On March 5, Powell called Byrne and asked that he join the enterprise in Florida, Byrne told The Post. Flynn called later that day and said Byrne’s business experience was needed, Byrne said. Byrne, who was at home in Utah and had just finished working on a book about his efforts to investigate the 2020 election, said he agreed to help through July.
Byrne said the Florida group was to be a successor to the Texas entity, which he said Powell had organized hastily and without naming staff. He said the idea was to consolidate efforts and most of the money in the Florida enterprise, leaving the Texas entity with enough funds to defend itself against litigation such as the Dominion lawsuit.
Within several weeks, Byrne, as chief executive, had arranged to lease office space in a squat Spanish-style former bank next to a tattoo parlor in Sarasota, Fla., and hired a small staff.
According to documents reviewed by The Post, that team included Weaver, a co-founder of Jericho March, a Christian group that held pro-Trump marches following the 2020 election. Emily Newman, a lawyer and former White House liaison to the Health and Human Services Department, was its president and also served on the board of directors, along with Joseph Flynn. Michael Flynn was an adviser.
Almost immediately, tension erupted between Powell and the staff. One flash point was a March 22 court filing Powell made seeking to have the Dominion case dismissed. Lawyers for Powell and Defending the Republic wrote that she could not be held liable in part because “reasonable people would not accept such statements as fact,” a position that drew scorn and was soon satirized on “Saturday Night Live.”
In an email to Byrne and others shortly after midnight on April 8, she admonished Defending the Republic employees, accusing them of seeming “panicked” and “immature” in the wake of that filing.
“The job that every American who has donated to our cause expects me to do is to get the truth out in our cases and hopefully win the litigation as I did in Flynn,” Powell wrote. “I need and deserve the full team behind me on this. I MUST run the litigation. That is why I started all of this. We do not have time, money or energy to waste. Drama needs to go.”
In text messages to The Post last week, Byrne rejected Powell’s characterizations of his team and said Powell’s email outburst was a final straw for him and his employees.
Other frustrations were detailed in a resignation email Byrne sent Powell on April 9. Just about everyone was quitting, he wrote, including the executive team and himself. Michael Flynn, the client who had been her original entree into Trump’s world, was also resigning, as was his brother.
Michael Flynn did not respond to a request for comment. Joseph Flynn confirmed that he and his brother resigned in April but declined to comment further.
Byrne wrote in the April 9 email that those who left were upset that Powell was trying to control the organization and was not making good on an agreement to step back and let others lead. He hinted at concerns about the organization’s finances, writing that “a detailed accounting of every donation that has come in to any bank account must be made, and subsequent flows accounted for.”
The Post reviewed four employees’ resignation letters from that day, including the one in which Weaver urged a complete audit of the nonprofit’s finances and access to all bank accounts for any future CFO. “I strongly recommend that any new Chief Financial Officer be promptly given access to all bank accounts,” wrote Weaver, who did not respond last week to a request for comment.
A week after the falling out over the Florida nonprofit, a limited liability company established days earlier by Powell closed on a property in the historic Old Town neighborhood of Alexandria, Va., a brick house that had been an antique shop. The company, 524 Old Towne, paid $1.2 million. The sellers understood that the buyer was Powell and that she intended to establish a law office there, Politico reported and The Post confirmed.
Emma Brown
The Washington Post
Powell purchased a building in historic Old Town Alexandria, Va., in April, using a limited liability company she had established in Texas a few days earlier.
When a reporter visited on Saturday, shades were drawn, a sign promised 24-hour video surveillance and the front steps were cordoned off with a chain and a sign that said “private residence.” A man who was tending to a wreath on the front door declined to identify himself and said no one was home.
Within days of his resignation, Byrne launched a new nonprofit with Michael Flynn, the America Project, which almost immediately began raising money to help fund the ballot review in Arizona. The group ultimately contributed $3.25 million to that effort. Byrne said he has spent nearly $12 million from his own fortune on efforts to expose what he says is a “deeply flawed” election system.
On May 11, a Defending the Republic lawyer sent a five-page letter accusing Byrne of defaming Powell and spending in “wasteful and possibly fraudulent” ways. Threatening legal action, the letter demanded Byrne repay nearly $530,000. Among its accusations was that in hiring Weaver, Newman and two other employees, Byrne arranged for $50,000 signing bonuses that vested — or became permanent — 15 days after the new hires signed employment contracts. All four resigned two days after the vesting date, the letter said.
In a reply the following day, Byrne shrugged off the letter as “comedy-art.” He wrote that the signing bonuses were necessary to persuade people to “forgo jobs and job offers to come to Florida” to work for Powell. He told The Post that he has long used such bonuses in his business operations, and that the employees left the nonprofit not because their bonuses had vested but because of their frustrations with Powell.
Byrne lobbed accusations of his own in the May email, writing that Powell had put $1 million into an operating account but otherwise “blocked all transparency” into Defending the Republic’s funds. And, he added, Powell herself had changed her story about the organization’s finances.
“Sidney told me she had received $15 million, then she used the number $12.5 million,” Byrne wrote. He wrote that he did not know how much money Powell had raised because “she refused all oversight and would not answer questions about it.”
A few days later, in a court filing, Dominion accused Powell of “raiding” the nonprofit’s coffers for her personal legal defense. And about a week after that, the Florida offshoot of Defending the Republic was dissolved.
Defending Sidney Powell
With Flynn and others out, and the election-fraud lawsuits rejected, Defending the Republic was spending considerable time defending Powell and the organization itself.
On June 15, Florida regulators served the Texas-based nonprofit with a complaint alleging that it had not registered to solicit contributions in Florida. Ten days later, the group submitted an application to register, which required detailing its finances.
In that application, Defending the Republic projected contributions of $7.2 million during the fiscal year ending Sept. 30. It disclosed that Powell received an unspecified amount of compensation from the organization.
Powell was deposed the following month as part of a defamation lawsuit filed against her in Colorado by a former Dominion employee. She testified that her law firm had not yet been paid for bringing election-related lawsuits. However, asked whether the firm would receive payment through donations made to Defending the Republic in the future, she replied, “I certainly hope we will.”
The firm was still “trying to collect information that would be needed for anyone to consider compensating us,” Powell said. She said that she had not been paid personally for her work on the election challenges, either. Generally, she said, “I make sure everybody else gets paid for what they have done, and then if there’s any left, I have that as my compensation.”
A lawyer representing Defending the Republic, Brandon Johnson, was deposed the following month in the same case. He said he could not account for donations made before the group was formally registered on Dec. 1, 2020, the period when she was directing people to her website.
“We did not exist,” Johnson said. “We did not have a bank account.”
Asked whether Defending the Republic received a “lump sum” from another organization that had received funds collected before Dec. 1, Johnson said he did not know.
Johnson also said Defending the Republic’s work had broadened to encompass more than just election-related issues, including work on potential challenges to vaccine and mask mandates. In October, the group announced it had filed a lawsuit challenging the U.S. military’s vaccine mandate.
Johnson did not respond to requests for comment.
In August, Defending the Republic reached a settlement with the Florida regulators and agreed to pay a $10,000 fine, documents show. But around the time state scrutiny receded, federal investigators were asking questions.
The grand jury subpoena reviewed by The Post was issued in September, demanding records going back to Nov. 1, 2020, related to Defending the Republic’s fundraising and accounting.
Trump has not met with Powell since leaving the White House, and he complains frequently that she raised money using his name but ultimately did not make it possible for him to return to the White House, according to a Trump adviser who spoke on the condition of anonymity to describe private conversations.
A Trump spokesman told The Post that Powell has been a “strong supporter” of the former president and added: “Every dollar raised in Republican politics is raised using President Trump’s name, whether or not he’s involved.”
On Thursday, U.S. District Judge Linda V. Parker ordered Powell Johnson, Newman and six other lawyers involved with a failed suit to overturn the election in Michigan to pay about $175,000 to cover the legal fees of their opponents, state officials and the city of Detroit. Parker had previously called the lawyers’ suit “a historic and profound abuse of the judicial process” and recommended grievance proceedings that could result in disbarment.
Powell and the others complained the fees were unreasonable, but Parker wrote that they were appropriate to deter “similar misconduct in the future.”
She added that she was confident they could afford the fines, given that they had solicited donations from the public to fund their litigation. To illustrate, she pointed to Defending the Republic’s website.
Alice Crites and Scott Clement contributed to this report.
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