Foreign Influence: Scott Walter’s testimony to the House Ways and Means Committee

Scott Walter’s Testimony to the House Ways and Means Committee

Oral Testimony and questions for Walter video (transcript below)
Written Testimony: HTML or PDF (House website)
Hearing page (House website includes full video)

Rep. Jason Smith, chairman

Hearing on Foreign Influence in American Nonprofits:
Unmasking Threats from Beijing and Beyond

Scott Walter

President, Capital Research Center

February 10, 2026

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Transcript of Mr. Walter’s oral testimony

(Coming soon: video of testimony and questions posed to Walter)

Chairman Smith, Ranking Member Neal, distinguished members of the Committee, thank you for the honor of testifying. I’m president of the Capital Research Center, where we’ve long studied the nonprofit world and its connections to politics.

How refreshing to have a hearing where all witnesses share strong agreement on a central point: foreign money should be kept out of America’s politics. Mr. Weissman urges passage of the DISCLOSE Act in part because it drastically limits foreign political spending. Ms. Sutherland deplores political spending by the Swiss foreign national billionaire Hansjörg Wyss. Mr. Sohn objects to past funding from Middle Eastern countries to the Council on American Islamic Relations. And I criticize domestic environmentalist groups’ ties to the Chinese Communist government.

A lot of these problems involve America’s nonprofit sector, which has traditionally been a glory and a strength of this exceptional country. But foreigners abuse this sector—especially tools like fiscal sponsorship and donor-advised funds, which aren’t inherently bad things—to hide their influence ops.

Americans’ homegrown groups also exploit those tools. Recall the politicized, multibillion-dollar nonprofit network operated by Arabella Advisors, one of whose presidents admitted their business, which heavily uses fiscal sponsorships, is “a workaround to the tax regime.”[1] This same Arabella network’s first major funder whom we can discern was Hansjörg Wyss, the Swiss foreign national and Democratic “mega-donor”[2] Ms. Sutherland discussed.

A big part of this problem is so-called campaign finance reform. It greatly narrows money flows into “hard dollar” entities like political candidates and parties, but it places no restraints on 501(c)(3) private foundations and public charities. This preference for the charitable sector is explained by the fact that 8 billionaires, all with the same last name: Foundation, gave almost all the money to pass the last campaign finance law, McCain-Feingold. That law hurts both political parties and drives anyone seeking to influence our politics to send money, not to parties and candidates, where it would be disclosed, but into nonprofits where the money is hidden, sometimes under multiple layers, and also where the money is unlimited, both in dollar amounts and also in its source:  Foreign governments and foreign nationals like Hans Wyss can give unlimited amounts.

As one left-wing activist admits, the law that forbids using 501(c)(3) charities “for electoral work … is a joke.”[3] “Philanthropy can help win elections, pass legislation, enact policy, decide court cases, shape press coverage, catalyze protests, smear your enemies, boost your allies, and even help set the overall cultural direction of American life.”[4]

New York Times reporter Teddy Schleifer agrees, confessing that 501(c)(3) charities “are often surprisingly as [much a] part of big-money politics as your neighborhood super PAC.”[5]

Some left-wing practitioners celebrate the collapse of the traditional separation between charity and politics, including Eric Kessler, who founded the Arabella network of left-wing nonprofits.  In a case study of the business he paid for, we read that when Arabella was founded in 2005, “most donors still equated philanthropy with giving to charity for community services.” But he and his business partner “saw things differently.” They were obsessed with “bold change-making strategies,” “advocacy,” and “innovative methods”—like fiscal sponsorship—that would “soon help billions in new philanthropic resources”—from left-wing billionaires, foreign and domestic—“flow into the nonprofit field with unprecedented velocity.”[6]

It’s undesirable when American donors produce this pseudo-philanthropy and manipulate our politics through it. It’s far worse when foreign donors are involved, because nearly all Americans reject foreign money entering our politics through any channel, much less through alleged “charities.” That’s why states keep passing laws to block foreign funds. Only this past week, Alabama and Michigan saw houses of their state legislatures pass bills to prohibit foreign nationals from directly or indirectly funding ballot initiatives. At least 19 states have laws prohibiting foreign nationals from contributing to ballot measure committees. On the federal level, this Committee should consider whether 501(c)(3) “charities” should continue to be allowed to engage in ballot initiative campaigns, given that charities have no limit on their spending and may receive unlimited foreign funding.

The Committee should also consider whether “charities” should be allowed to engage in voter registration, given the documented abuses by “charities” who flout laws and regulations that only permit this when it’s done in a nonpartisan manner. “Charities” that hire Democratic microtargeting firms to help register voters are laughing at your tax code.[7]

Thank God Americans give generously to nonprofits. They give because they want nonprofits to help people. They don’t want anyone, especially foreigners, to use politicized nonprofits to manipulate people.

Thank you for taking this grave problem seriously.

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[1] “Arabella Advisors Leader on Generational Differences in Giving,” Chronicle of Philanthropy, March 6, 2020, https://www.philanthropy.com/article/arabella-advisorsleader-on-generational-differences-in-giving-podcast/.

[2] https://puck.news/inside-the-democrats-dark-money-machine/.

[3] David Callahan in an e-newsletter sent to Blue Tent supporters, Dec. 18, 2021, and quoted in https://thegivingreview.com/a-selection-of-quotes-about-nonprofit-laws-distinction-between-politics-and-charity/.

[4] https://www.insidephilanthropy.com/toplines/toplines-nov22-politics-and-philanthropy.

[5] https://puck.news/inside-the-democrats-dark-money-machine/.

[6] “Arabella Advisors: Built for Impact at Scale,” Georgetown Business for Impact (Georgetown University’s McDonough School of Business), November 6, 2023, https://businessforimpact.georgetown.edu/wp-content/uploads/2024/01/BFI-Arabella-Case-11-1-28-pages-1.pdf.

[7] See https://capitalresearch.org/?s=charities+secretly+help+win.

Source: https://capitalresearch.org/article/foreign-influence-scott-walters-testimony-to-the-house-ways-and-means-committee/