Florida cracks down on Sidney Powell and Michael Flynn’s “deceptive” fundraising

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A nonprofit run by the former president’s lawyer Sidney Powell, pardoned felon former National Security Advisor Gen. Michael T. Flynn, and Flynn’s brother Joseph all just got hit with an Administrative Complaint by Florida’s statewide charity regulator.

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Last Friday, Ag. Commissioner Nikki Fried gave a 20-minute press conference in Tallahassee, Florida, announcing the service of a new administrative complaint against Defending the Republic, Inc. of Texas alongside Rick Kinsey, Director of the Consumer Services Division.

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A former insider who requested anonymity says it’s common knowledge within the Defending the Republic organization that the lawyer has raised at least $10 million, but higher figures have been discussed.

A filing with the Texas Secretary of State shows the Flynn brothers replaced attorney Lin Wood on its board of directors on December 4th, only three days after the nonprofit was created. The former CEO of Powell’s company, Patrick Byrne reached out to give a comment after publication, saying that the Flynns resigned from Defending the Republic Inc. and his statement will appear in full at the bottom of this story.

In its press release, the department cited this newsletter’s original reporting on the origins of its investigation into Sidney Powell and DefendingtheRepublic.org.

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The new complaint against the 501(c)4 social welfare organization Defending the Republic, Inc. of Texas was at least partly caused by her reaction to this newsletter’s reporting on May 21st, as you will see below.

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Joseph Flynn photo via American Priorities.

That story revealed in March, a Florida Agriculture and Consumer Services civil investigator subpoenaed her private web domain registration information for defendingtherepublic.org after sending an initial solicitation registration notice to Powell last December.

On the very same day of publication, Powell personally shuttered a Florida nonprofit 501(c)4 also named Defending the Republic, Inc. though it is unclear if she had the legal authority to do so. She also updated DefendingtheRepublic.org to contain a materially false disclosure that the nonprofit registered with state charity regulators in Florida, and her records were on file, as well as with multiple other state solicitation regulators.

In response to last week’s new enforcement action, DefendingtheRepublic.org took affirmative steps to conceal the false disclosure that led to an administrative complaint and instead direct donors in some states, including Florida, to donate to an FEC-registered Super PAC named Defending the Republic PAC Inc., which is an unusually formed Florida for-profit corporation.

Defending the Republic is facing the Administrative Complaint about using a “device, scheme, or artifice to defraud or to obtain a contribution by means of any deception, false pretense, misrepresentation, or false promise” in a charitable solicitation, and also for failure to register before soliciting funds.

It carries a combined $15,000 fine and demands that Powell and Flynn’s group register with the Florida Department of Agriculture and Consumer Services within 21 days. Registration entails disclosing budgets, fundraisers, control persons, and numerous additional information that would shed light on the Texas attorney’s purportedly vast fundraising operation.

If Powell doesn’t comply, the department could sue Defending the Republic in court to force them to cease and desist from continuing to raise funds.

Knowingly and willingly refusing to register before charitable fundraising in Florida can be a 3rd-degree felony crime, as is knowingly making false statements on the registration forms.

“When we spoke to Defending the Republic, seeking answers, they intimated, ‘Oh, that’s not us. You’ve got the wrong people. It must be the other, Defending the Republic.’” says Commissioner Fried about her agency’s discussions with Powell’s attorneys in Washington, D.C.

“The response to the subpoena told a very different story that Defending The Republic, their public website is affiliated with Sidney Powell, and is, in fact, the same one allegedly operating in violation of chapter 496 of the Florida Statutes,” the Commissioner concluded, after beginning the press conference ominously noting the role of her department in kicking off the WeBuildTheWall investigation which led to its founder’s indictment on federal wire fraud, money laundering, and tax charges.

Kinsey explained that the department took these steps because “they are located in Florida and soliciting from Florida from a West Palm beach address. Their website asks donations to be specifically sent to this address in West Palm Beach.”

A month ago, Sidney Powell, her associates, and a cadre of lawyers representing her refused to comment on the initial report that the state of Florida started investigating her fundraising, and she refused requests for comment via email and phone for this story.

But the same day this newsletter’s report came out, May 21st, she updated defendingtherepublic.org and voluntarily dissolved the Florida nonprofit corporation also named Defending the Republic Inc.

Unusually, the Florida Secretary of State’s website never listed Powell as a director of that entity. MyPillow CEO Mike Lindell, Joseph Flynn, and Emily Newman were the only directors listed. Nonetheless, she electronically signed the termination statement personally as “Chairman of the Board,” claiming that the vote to dissolve took place on May 21st and came down 3-0 in favor of dissolution but didn’t file a notice or minutes of the meeting.

“What’s wrong with this is that Sidney Powell has no power to dissolve Defending the Republic, Inc. of Florida because she was never registered as a director of the nonprofit corporation with the Secretary of State, which would have been reported on its website, Sunbiz.org,” says Miami-based lawyer David J. Winker, Esq.

Florida law makes it a 3rd-degree felony to make a false statement to the Secretary of State, which Powell acknowledged in the filing.

“These laws exist to protect donors and give transparency to the public,” says Winker.

“On April 9, Joe Flynn, Patrick Byrne, and any previously listed officers of the company Defending the Republic, Inc. of Florida and of Texas other than Sidney Powell resigned in writing. All records for the corporate handoff to Sidney were carefully organized and turned over in the office for her. Sidney communicated her understanding of our departure,” says Patrick Byrne, former CEO of the company. “If Sidney is not updating her corporate filings promptly and professionally…. it does not surprise me.”

I have seen documentation that would appear to confirm Byrne’s account of April 9 resignations, shown in full below, saying that General Flynn’s resignation was as a “consultant and advisor.”

That evening, Defending the Republic also unveiled a new website (archived from June 17th, 2021 via Google Cache) that contained a “Uniform Disclosure Statement” (downloaded and archived) claiming to have registered with Florida’s Division of Consumer Services with a revision date of May 21st, 2021.

A metadata search inside the file reveals that it was created at 5:37 PM by an author named “wcbhq,” which could be Defending the Republic’s DC-based law firm Webster, Chamberlain & Bean (whose web domain is wc-b.com).

Right at the top of the statement, Defending the Republic claims to be registered with Florida’s Division of Consumer Services.

It was not.

Interestingly, none of the nine other states listed in their disclosure have a registration listing for Defending the Republic based on electronic searches for this story.

Armed with a new disclosure that directed me to ask the Florida Division of Consumer Servies, on the morning of May 26th, I contacted the department’s spokesman for a copy of the records.

On the morning of June 8th, the department confirmed after a diligent search that they did not have the records that Powell’s charity said they had filed.

In the wake of Fried’s announcement, DefendingtheRepublic.org has made yet another change to the fundraising page on its website with implications that draw in another opaque organization named Defending the Republic directly tied to Sidney Powell.

The Texas nonprofit’s uniform disclosure statement is now gone, and a new solicitation pitch is there in its place.

This new disclosure is below the donations buttons:

If you are from one of the following states:

Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Utah, Virginia, Washington, or Wisconsin.

Please do not donate to Defending The Republic, INC – Consider contributing to DefendingTheRepublicPAC.com.

Defending The Republic

10130 Northlake Blvd

214-342 West Palm Beach

FL 33412

The new solicitation asks members of the public to donate to a Super PAC run by Sidney Powell personally.

That’s because Super PAC Defending the Republic PAC Inc. is also a Florida for-profit corporation.

“Perhaps there’s an explanation, but I’ve never heard of a for-profit Super PAC,” said attorney Kenneth Gross of Skadden Arps, who is a nationally renowned expert on campaign finance law. “It should be a political committee which is a not-for-profit entity under 527 of the IRS code.”

It is even more unusual that Defending the Republic PAC Inc. has no listed directors on its Articles of Incorporation. It throws into doubt if it has ever conducted lawful business in the state.

Florida Statute 607.0803 specifies that “[a] board of directors must consist of one or more individuals….” For that reason, it’s unclear if Defending the Republic PAC Inc. can conduct any lawful business because it would be unable to adopt bylaws without the minimum number of directors or do much of anything else.

However, the Miami attorney Winker says that Florida’s Secretary of State does accept new non-profit corporate filings with blank slates of directors, which he called a “loophole in the law,” and then add directors at an organizational meeting. But if they want to conduct business, “they generally have to file with the Secretary of State to get a bank account. It would be highly unusual for a bank to issue an account without such a filing in SunBiz. Otherwise, they only have to file their slate of directors by May 1st of the following year.”

“As you can see, registration Form 1 for PACs requires clear identification of the treasurer and the custodian of records for every PAC, including whether the non connected PAC is incorporated for liability purposes,” says Public Citizen’s Craig Holman, Ph.D. who is an expert on federal campaign finance laws. “It also requires disclosure of any affiliated entities. It does not look like the identities of the affiliated corporate board need to be disclosed, but that should be mandated by state law governing corporations as well as the Internal Revenue Code.”

In early March, attorney Peter Haller, who litigated some of Sidney Powell’s frivolous election challenges, acted as Defending the Republic PAC’s incorporator and initial treasurer for the FEC and Mary O’Neill as the committee records custodian.

For no apparent reason, Haller filed a dissolution statement on March 29th on behalf of Super PAC, which only raised $300, including an itemized donation of $100 from the now-defunct Defending the Republic Inc. of Florida. But he made an about-face on March 31st, reopening the PAC and transferring the position of Treasurer and Document Custodian to Sidney Powell two days later in an April 2nd filing.

On April 15th, Powell changed the banking institution from Englewood Bank & Trust, located in Joseph Flynn’s hometown, to First Florida Integrity Bank in Naples, Florida.

Significantly, because a for-profit corporation doesn’t require three directors in Florida, which non-profit corporations do require, this Super PAC setup appears to give Sidney Powell total control over the organization’s bank account.

On the state level, the formation of a corporation without a functional board or bylaws raises some similarities to WeBuildTheWall’s corporate catch-22, which I reported on two summers ago. That was one year before both its founder and former Trump Campaign manager got indicted on federal wire fraud and money laundering conspiracy charges for misappropriating a million dollars.

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“Sidney Powell seems to be banking on the fact that nobody seems to enforce the law, and she could probably get away with it, and she’s probably right,” says Holman. “When it comes to the FEC, I have no confidence that they would step in to enforce FECA. Half of the FEC believes that free speech rights outweigh enforcing these laws.”

Here’s a copy of Patrick Byrne’s statement:

Here’s a copy of the complaint:

Here’s a complete copy of the “Uniform Disclosure Statement” from defendingtherepublic.org:

 

Grant Stern

Editor at Large

Grant Stern is a columnist for the Washington Press. He's also mortgage broker, writer, community activist and radio personality in Miami, Florida.

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