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Project Veritas says it provided $20,500 in ‘excess benefit’ to its founder

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WASHINGTON — Project Veritas, the right-wing group known for its undercover operations, reported in its latest IRS filing that it provided a prohibited “excess benefit” to its founder, James O’Keefe, last year. .

Each year, the IRS asks nonprofit organizations to report whether their leaders have received undue or excessive benefits. In its 2021 filings with federal and state regulators, Project Veritas said yes, reporting $20,512 in excess benefits to Mr. O’Keefe.

In those tax returns, submitted in November and posted online by Hawaii’s charity regulators, Project Veritas did not describe the benefits.

On Monday, Project Veritas executive director Daniel Strack said expenses related to Project Veritas personnel who accompanied Mr. O’Keefe when he performed in an outdoor production of “Oklahoma!” staged on a farm in Roseland, Virginia.

“The disclosure about our 990s pertains to Project Veritas personnel helping to film behind the scenes and personnel who were on hand to greet James,” Mr. Strack wrote in a statement released through a spokesperson, referring to filing with the IRS.

As a result, the group said, Mr. O’Keefe had incurred tax equal to 25% of the excess benefit, or $5,128. Mr Strack, through the spokesman, said the tax “has been paid”.

Tax laws also require nonprofit leaders who receive excess benefits to “correct” them by reimbursing the value of those benefits, or face a tax penalty of twice that amount.

In its filings, Project Veritas said Mr. O’Keefe had not repaid excess benefits as of the end of 2021. On Monday, a spokesperson for the group said Mr. O’Keefe had repaid the money this year.

Marcus Owens, an attorney who ran the IRS division overseeing nonprofits, said it was unusual for nonprofits to report an excess benefit transaction, but said she had no not corrected the same year. Mr Owens said it could invite further scrutiny from the IRS

Project Veritas, based in suburban New York, regularly conducts undercover operations, surveillance operations and ambush interviews, primarily against liberal groups and journalists.

The group grew rapidly as Donald J. Trump — an ally and former donor, through Mr. Trump’s own nonprofit — came to dominate Republican politics. Between 2014 and 2021, Project Veritas revenue grew to $20.7 million from $2.4 million, according to tax returns.

But the latest filing shows that in 2021, the group’s expenses also rose rapidly, to $20.6 million.

Mr. O’Keefe’s compensation fell slightly to $405,000. But there was a significant increase in the group’s legal costs, to $4.7 million.

Project Veritas has been embroiled in several long-running legal battles. Prior to the presidential election, the group purchased a stolen newspaper belonging to President Biden’s daughter, Ashley, but never published its contents.

Earlier this year, two Florida residents involved in the scheme pleaded guilty to stealing the diary and other items belonging to Ms Biden. As part of this federal investigation, FBI agents conducted a court-authorized search of Mr. O’Keefe’s home and seized his electronic devices.

Prosecutors directly linked Project Veritas to the theft of Ms Biden’s items in court documents, saying an employee of the group ordered the defendants to steal additional items to authenticate the diary and paid them additional money after the have received.

Mr O’Keefe recently hired two top defense attorneys – Jeffrey Lichtman and Marc Fernich – to represent him in the case.

In August, Project Veritas was ordered to pay Stanford University approximately $150,000 in legal fees after a federal judge launched a libel suit brought by a group in 2021. And the following month, a jury of DC concluded that the conservative group violated wiretapping laws and fraudulently misrepresented themselves. to a Democratic consulting firm. Project Veritas was ordered to pay $120,000 but appealed the decision.

Project Veritas also has a libel suit against The New York Times.

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