Legal experts have called for quick probes into the “troubling” mismatch after a Washington Free Beacon investigation revealed a $12 million shortfall in the financial declarations of President Joe Biden’s preferred super PAC.
In 2021, Future Forward claimed to have received only $3.4 million in funding from its associated dark money group, despite being supported by the Biden White House as the “preeminent super PAC” backing the president’s reelection bid. The organization Future Forward USA Action disclosed the donation of $15.3 million to the super PAC in its tax return to the IRS for the year 2021. Experts think the group’s financial mistakes are serious enough to trigger a federal investigation, and the lost $12 million is only one example.
“The apparent numerous and blatant discrepancies in the recent filings by both the nonprofit and the super PAC are beyond troubling,” said Kendra Arnold, executive director of watchdog group Foundation for Accountability and Civic Trust. “This situation calls for an investigation,” Arnold said, adding that the radical divergence in the figures reported in the groups’ financial disclosures “is a telltale sign of inaccuracies and a deeper problem.” Nonprofit attorney Jason Torchinsky echoed that call, saying an apparent failure to report millions in contributions “would be a serious matter that the Federal Election Commission would investigate.”
Biden’s campaign for reelection in 2024 may be hampered by an inquiry into Future Forward. Ads backing Biden and Democrats in swing states have been discreetly funded to the tune of nearly $400 million over the previous five years by an organization founded by former Obama campaign staffers. Future Forward received a significant amount of money from Future Forward USA Action, a 501(c)(3) that is exempt from disclosing its contributors. Even though Vice President Joe Biden has called dark money a “erodes public trust” and “serious problem facing our democracy,” White House Deputy Chief of Staff Jennifer O’Malley Dillon has indicated that the organization Future Forward will “play a key role” in helping Biden win reelection.
Neither Future Forward nor Future Forward USA Action responded to specific inquiries about the discrepancies in their financial filings.
When a super PAC reveals the amount of money it received from a dark money group, it will usually be the same amount that the dark money group reports to the IRS. However, Future Forward’s filings with the IRS and FEC contain a number of obvious inconsistencies.
Future Forward USA Action disclosed a donation of $15.3 million to the super PAC in its tax return to the IRS for the year 2021. In its filings with the FEC, Future Forward should have included the same sum. However, in 2021, the super PAC only reported receiving $3.4 million from the related dark money entity. Arnold has dubbed the missing $12 million a “beyond troubling” gap in the super PAC’s reports.
“If the filings are not accurate then not only are they worthless, but they are misleading,” Arnold told the Free Beacon.
Attorney for nonprofit organizations Jason Torchinsky called the inconsistencies in Future Forward’s reporting a “serious matter” that might lead to hefty fines.
“It seems very odd to tell the IRS that you sent $15 million to a super PAC, but to only have that super PAC report $3 million,” Torchinsky told the Free Beacon. “If the FEC determined that there were $12 million in underreported receipts by a super PAC, that could result in a substantial fine because FEC penalties are often assessed based on the amount at issue.”
According to the Free Beacon, the $3.4 million that is accounted for in Future Forward’s 2021 reporting could possibly get the organization into legal difficulties. Since these payments were clearly intended for the super PAC, Future Forward’s dark money arm acknowledged in another section of its 2021 IRS tax form that it was required to report the identities of its donors to the FEC. However, Future Forward remained secretive about the donors’ identities.
“Future Forward USA Action admitted to making over $3 million in earmarked political contributions, where they apparently obscured the true super PAC donor’s identity by routing the money through the nonprofit,” Republican election lawyer Charlie Spies told the Free Beacon. “The U.S. DOJ has sent people to prison for this sort of illegal activity, and the FEC has imposed major fines on conservative organizations accused of less blatant earmarking.”
There are even more inconsistencies in Future Forward’s reporting between 2018 and 2020. Since the Super PAC has never disclosed any payroll expenses in its FEC filings, it is unlikely that it employs any full-time workers. The super PAC instead employs people from the dark money organization with whom it is associated. Although it is usual for companies to compensate their employees in kind, Future Forward’s two groups reported vastly differing totals for in-kind donations made by their employees between 2018 and 2020.
In 2020, Future Forward disclosed to the FEC that it had received in-kind contributions of $467,204 from the dark money organization. However, the secret donor group told the IRS that they only gave the super PAC $67,479 worth of in-kind staff time that year. There ought to be an identical correspondence between the two sets of figures, but instead there is a discrepancy of roughly seven.
In previous years (2018 and 2019), Future Forward’s shadowy funder claimed to have donated nothing in the form of in-kind personnel services to the PAC. Future Forward, on the other hand, claimed to have received $137,000 in in-kind staff services from its dark money affiliate over the course of those same years.
“There must be an independent audit of both groups for these egregious discrepancies and an investigation and possible enforcement action by both the IRS and the FEC,” said Paul Kamenar, an attorney with the National Legal and Policy Center watchdog group.