This election, certainly one of President Donald Trump’s most influential advocates is 26-year-old Charlie Kirk, who has developed a novel bond with the primary household. The conservative star dines with the president at Mar-a-Lago and rang within the new yr there. Throughout every of the final two winters, he used the membership to carry a proper fundraiser for his nonprofit, Turning Level USA, that featured Donald Trump Jr.
At a Turning Level event in June, the president, addressing the group, stated, “Allow us to additionally present our appreciation to my good pal, Charlie. I am going to let you know, Charlie is a few piece of labor who’s mobilizing a brand new era of pro-American pupil activists.” On a Turning Level webpage soliciting donations, Trump Jr., a detailed pal of Kirk’s, is quoted as saying, “I am satisfied that the work by Turning Level USA and Charlie Kirk will win again the way forward for America.”
The tax-exempt charity says its mission is to teach “college students concerning the significance of fiscal duty, free markets, and capitalism.” As its profile has risen, its income has ballooned, reaching $28 million, a sevenfold enhance in 4 years.
However behind the scenes, Turning Level USA has entered into questionable monetary preparations, significantly involving Kirk’s mentor, William Montgomery, the lesser-known co-founder who’s credited with discovering Kirk. Montgomery, 80, an Illinois entrepreneur and onetime Tea Get together activist, is certainly one of three Turning Level insiders who’ve gained profitable offers from the group to deal with its printing, payroll processing and fundraising.
The nonprofit has additionally made deceptive assertions about its funds to state and federal regulators, in response to interviews and an examination of tax and enterprise information.
Charities are required to conduct annual impartial audits certifying their books are sound with a purpose to fundraise in additional than a dozen states. However the accounting agency Turning Level makes use of has engaged in a number of enterprise relationships with Montgomery, who for years served because the nonprofit’s treasurer. The dynamic, consultants say, imperils independence and undermines the credibility of Turning Level’s monetary statements, together with its federal tax returns — a problem of significance at a second when increasingly money is flowing into the group’s coffers.
“This raises actual questions concerning the legitimacy of the return,” Philip Hackney, a College of Pittsburgh College of Legislation professor who previously labored within the IRS’ chief counsel’s workplace, informed ProPublica. “It makes it troublesome to belief what’s reported and begins to boost the likelihood that it is a fraudulent assertion.”
The IRS requires, beneath the penalty of perjury, that charities attest whether or not they acquired an impartial audit. Each Kirk and the co-founder have signed off on Turning Level’s filings.
In response to questions from ProPublica, Sally Wagenmaker, an legal professional for the nonprofit, stated that funds to companies belonging to group officers “offered a compelling operational profit in Turning Level’s greatest and different pursuits,” and that they had been “in full compliance with TPUSA’s IRS-compliant battle of curiosity coverage.”
Andrew Kolvet, a Turning Level spokesman, stated the enterprise relationship between the group’s auditor and its former treasurer is just not important and maintained the accounting agency is certainly an impartial firm. One other potential problem, ProPublica discovered, is that the license of the agency expired in late 2018, although the one which personally belongs to the agency’s managing companion has not.
Turning Level was based in 2012 by Kirk, then 18, and Montgomery, who invested within the younger activist after listening to him communicate at a small school within the state. On the 2016 Republican Nationwide Conference, Kirk met Trump Jr. and would quickly accompany him on the street as an assistant. As Turning Level has thrived, Kirk’s wage has grown from $27,000 to just about $300,000, and he not lives along with his mother and father — final Might he purchased a $855,000 two-bedroom, two-bathroom oceanfront apartment in Longboat Key, Florida, county property information present.
Over the past yr, the president has delivered remarks on the group’s conferences three separate times. On the group’s December 2018 Mar-a-Lago affair, the president’s eldest son helped it haul in almost $5 million, tax information present. Not too long ago, Kirk published a ebook known as “The MAGA Doctrine,” which Trump and his son promoted on Twitter.
For his half, Montgomery, whose Fb profile image options him posing with Trump Jr., left Turning Level final April, when, Kolvet stated, his time period as a board member ended. Two months later, Kirk effusively praised Montgomery in a weblog post, celebrating his unmatched contributions to the nonprofit. “To anybody who has been impacted by my movies, podcast, TPUSA, our chapters, literature, occasions, conferences, area packages, or any speeches I’ve given,” Kirk wrote, “you’ve Invoice Montgomery to thank for investing in an 18-year-old with a imaginative and prescient — when everybody else thought it was not possible, silly, and deemed for failure.”
Montgomery, Kolvet informed ProPublica, “stays a pal of the group.”
Turning Level amplifies White Home messaging by recurrently tweeting memes and one-liners supportive of Trump administration insurance policies or politics to tons of of 1000’s of Twitter followers, and it retweets related messages despatched by Kirk, who’s adopted by almost 2 million folks. In the meantime, Kirk’s and the group’s tweets are sometimes retweeted by the president, selling the younger chief’s incendiary statements to greater than 82 million followers, together with his description of COVID-19 because the “China virus.”
Kirk cultivates the picture of a younger, critical govt, favoring button-down shirts and sport coats in public. He revels in scary left-leaning activists and college students on all the things from the Israeli-Palestinian battle to the consequences of “white privilege,” which he calls a “racist lie.” Turning Level promotes clips of his campus confrontations on social media, usually boasting that Kirk has “destroyed” an unworthy adversary.
Turning Level says it now has “a presence” on greater than 2,000 campuses, 272 workers and an affiliated nonprofit largely centered on supporting Trump. But because the group has expanded, it has from time to time been the middle of controversy. Politico discovered that Turning Level has fabricated its affect on school elections. And in 2017, The New Yorker drew consideration to an organizational tradition that appeared plagued with racism and detached to legal guidelines that prohibit charities from partaking in categorical political advocacy. The journal obtained textual content messages written by the group’s former area director that stated, “I HATE BLACK PEOPLE. Like fuck all of them…I hate blacks. Finish of story.” (The sender of the textual content resigned and Kirk informed the journal, “Turning Level assessed the scenario and took decisive motion inside 72 hours of being made conscious of the problem.”)
ProPublica’s examination of Turning Level’s funds raises extra questions on the best way the group is run, the reliability of its public disclosures and its strategy to laws governing nonprofits.
Turning Level is registered to fundraise in dozens of states throughout the nation. Due to the group’s measurement, attorneys basic and secretaries of state in 15 states — together with New York, Pennsylvania, New Mexico and Kansas — require it to file audits to stay in good standing. The work, every state’s statute invariably specifies, have to be carried out by “an impartial licensed public accountant.”
The IRS doesn’t require such an audit, nevertheless it asks concerning the audit’s standing. On Turning Level’s final 4 federal tax returns, in line with its state filings and spanning a interval that covers July 2015 by June 2019, the group asserts that its monetary statements are “audited by an impartial accountant.”
However Turning Level’s accounting agency, the Stapleton Group, based mostly in Orland Park, Illinois, has a big tie to the charity. Montgomery, the charity’s co-founder, has served as a “enterprise improvement advisor” for Stapleton, serving to to deliver shoppers to the agency. The corporate’s managing companion, Robert Stapleton, who handles Turning Level’s returns, has labored as Montgomery’s private tax preparer, in response to Stapleton. The agency, which employs a handful of individuals, was integrated by the identical suburban Chicago lawyer who, information present, fashioned a enterprise entity Montgomery used to gather hire and make political contributions.
Robert Stapleton and the Stapleton Group didn’t reply on to ProPublica. As an alternative, the agency offered feedback by Kolvet.
Stapleton grew to become Turning Level’s auditor after Montgomery launched the agency to the group, a referral for which Montgomery wasn’t compensated, Stapleton stated by the spokesman. On his LinkedIn web page and in a biography that when lived on Turning Level’s web site, Montgomery identifies his connection to Stapleton’s agency; on the previous, it states the affiliation started in 2010 and has continued to the current.
Montgomery acquired “no remuneration” from the agency and “acted in a enterprise improvement capability in his spare time and on fee solely” in 2011, in response to Stapleton. Turning Level, Kolvet stated, “is assured within the independence of any providers offered by The Stapleton Group.”
In a press release, the agency stated, “The Stapleton Group upholds the best ranges of integrity and independence whereas conducting audits and opinions for a lot of companies and organizations of all sizes.”
Till the spring of final yr, information present, Montgomery served on Turning Level’s board and as its secretary and treasurer, giving him oversight of Turning Level’s monetary books and custody over its company information, in response to the group’s bylaws. At one level, he was solely liable for fundraising and the spending of Turning Level’s money, in response to charity information filed in New Mexico.
“If Montgomery has a powerful relationship with the auditor, then there’s a clear battle there,” stated Tzachi Zach, an Ohio State College accounting professor. “Aside from the auditor being employed, there needs to be no different relationship between the auditor and the nonprofit.”
James Fishman, a former assistant legal professional basic within the New York legal professional basic’s workplace, stated that, on the query of independence, Turning Level’s audit association “doesn’t go the scent take a look at. If an legal professional basic seemed carefully, they might discover it wasn’t impartial.”
In a letter dated July 7, and offered by Kolvet, Robert Stapleton wrote to Montgomery on firm letterhead asking him to “instantly appropriate” his LinkedIn profile that claimed he’s “related to the Stapleton Group.” The letter was dated two weeks after ProPublica first inquired about Montgomery’s ties to the accounting agency; Montgomery’s LinkedIn profile nonetheless identifies him as a “enterprise improvement advisor” for Stapleton.
The nonprofit’s most up-to-date publicly out there audit, signed by the “The Stapleton Group” in Might 2019, presents an extra problem. The agency’s license to observe expired in late 2018, in response to the Illinois Division of Monetary and Skilled Regulation, the state company that regulates occupational licenses. In Illinois, state law prohibits licensed public accounting companies with an expired license from conducting audits.
Stapleton stated his agency “is conscious and is within the technique of rectifying the problem,” and thru Kolvet offered a replica of his private CPA license to ProPublica. Wagenmaker, the Turning Level legal professional, would not present a replica of the group’s most up-to-date audit, which isn’t but public and captures the nonprofit’s funds by final July. She additionally would not verify whether or not it was carried out by the Stapleton Group.
Montgomery hasn’t responded to calls and emails looking for remark.
Throughout Montgomery’s time at Turning Level, he personally benefited from a number of of the group’s enterprise preparations. Between July 2017 and June 2019, tax information present, Turning Level paid greater than $430,000 to a printing store owned by Montgomery, and gave him an extra $25,000 for the rental of a small workplace area. The compensation was on high of the direct earnings he acquired from Turning Level, which earned him near $200,000 throughout the identical interval.
Doug De Groote, the group’s board secretary, stated the seller funds to Montgomery “signify truthful market worth or decrease for the commerce providers acquired.” He added, “These selections had been made with Mr. Montgomery recused and with the group’s greatest curiosity paramount.”
Turning Level equally stated it was getting a greater deal by utilizing the payroll processing agency owned by the group’s present treasurer, Tom Sodeika. In late 2018, the nonprofit tapped the providers of his small, Illinois-based firm, Precision Payroll of America. Turning Level paid Precision $51,072 for its providers from late 2018 by final July, in response to tax information. The quantity, Kolvet stated, was “at a big low cost beneath market charges and in full compliance with Turning Level conflict-of-interest coverage.”
In January, Sodeika bought the corporate and relinquished all govt positions there. Turning Level wouldn’t say how a lot Sodeika bought Precision for or to whom he bought it, however Kolvet informed ProPublica that “previous to the sale of the corporate” it offered providers to Turning Level “at discounted market charges.”
Turning Level’s treasurers aren’t the one insiders who’ve reaped monetary rewards from the nonprofit. It additionally seems to have steered further money to a extremely paid worker by restricted legal responsibility firms, enterprise information present.
Stacy Sheridan, Turning Level’s “senior development director,” receives a wage of greater than $180,000, in response to the group’s newest tax filings, which additionally present over $200,000 flowing to 2 enterprise entities — GSM Technique LLC and Lionrock Ventures LLC — that had been paid for fundraising. The return doesn’t disclose who’s behind each firms, neither of which has a web site. However company information for GSM and Lionrock embrace Sheridan’s title and addresses related along with her.
When requested concerning the LLC funds, neither Kolvet nor Sheridan offered a remark. On their very own, the veiled preparations might go authorized muster, however Hackney, the previous IRS official, stated they may very well be half of a bigger, troubling sample.
“Because the variety of self-interested transactions go up,” he stated, “the potential goes up for the likelihood that the group is being operated for the non-public pursuits of those that management the group.”