True the Vote has been a key player in giving rise to the myth that widespread voter fraud is undermining U.S. elections.
Yet the Texas nonprofit hasn’t proven its big claims – or even produced the evidence it promises.
Our new investigation shows what True the Vote has been doing with its donations: It has engaged in a series of questionable transactions that has directed more than $1 million combined to its founder, a longtime board member and its general counsel. Based on thousands of pages of tax filings and court documents, the story highlights how promoting former President Donald Trump’s Big Lie has become a thriving economy.
Here are six takeaways from our investigation:
1. True the Vote has loaned founder Catherine Engelbrecht significant amounts of money. Under Texas law, it is illegal for nonprofits to give loans to their directors.
According to its tax filings, True the Vote issued Engelbrecht a $40,607 loan in 2015. It was still on the books in 2017. And in 2018, True the Vote disclosed an outstanding $61,896 loan to Engelbrecht. In its original 2019 tax return, the nonprofit reported giving her a $113,396 loan.
It’s unclear whether Engelbrecht took one loan that grew over the years or multiple loans.
The loans raise some potential legal issues for True the Vote. Under Texas law, it is legal to lend employees money under certain conditions. And while Engelbrecht is an employee of True the Vote, she’s much more than that. She’s also a member of the board of directors.
And Texas law forbids nonprofits from loaning money to their directors.
We asked True the Vote a number of questions about the loan: Was it approved by the board of directors? Did Engelbrecht vote on it? What are the terms of the loan? Did Engelbrecht’s business associate and alleged romantic partner, Gregg Phillips, vote for it while he was on the organization’s board?
True the Vote wouldn’t answer questions about who approved the loan, its conditions and whether Engelbrecht voted on it as a board member.
“I’m not going to respond to you on this,” said general counsel James Bopp Jr. “If you want free legal research, go pay a lawyer to do it.”
True the Vote originally reported the $113,396 loan to the IRS in its 2019 tax filing, yet it provided us with a return that shows no loan balance. An accountant for True the Vote said there “are no outstanding advances” but didn’t explain the differences between the two documents.
2. The year that Gregg Phillips joined the True the Vote board, the nonprofit began regularly paying money to entities connected to him.
Phillips replaced Engelbrecht’s ex-husband, Bryan, on the True the Vote board in 2014. In the years since, Phillips and Catherine Engelbrecht have become closely linked. Engelbrecht has served in key roles in Phillips’ private companies. In a court filing, a disgruntled donor said Phillips and Engelbrecht are lovers.
They haven’t acknowledged the relationship, but they haven’t exactly denied it either. Here’s what Engelbrecht told The New York Times: “You know, Gregg and I have actually talked about this and how we would answer this question. And the best answer that I think either of us are going to give is, it is totally unrelated and unimportant.”
Before he joined the board, Phillips had been dogged by allegations of financial impropriety, accused of leveraging his government positions in Mississippi and Texas to make himself money. Phillips in previous news stories has denied wrongdoing. He did not respond to repeated requests for comment.
In 2014, True the Vote paid $25,000 to American Solutions for Winning the Future for a “donor list rental.” Phillips was the director, records show. The next year, True the Vote gave $30,000 to a company called Define Idea Inc. for “IT support services.” Phillips was a director of the company, according to its formation documents.
Those payments all dwarf Phillips’ 2020 payments, however. That year, he created a new company, OPSEC Group LLC, to do voter analysis in 2020, and it received at least $750,000 from True the Vote. It’s unclear whether OPSEC has any other clients. One expert called the contract “eye-popping” for its largess.
True the Vote didn’t respond to questions about whether it was appropriate to contract with Phillips.
It’s unclear when Phillips left the nonprofit’s board. In court documents, he says he left in 2017. However, the organization’s 2018 tax return listed him as a board member, as did the original 2019 filing. True the Vote’s amended 2019 filing removes him as a board member.
Engelbrecht and Phillips’ ties go beyond True the Vote. Their companies have shared the same mailing address.
While she reported working full time for True the Vote, Engelbrecht also was the president of a health care software company owned by Phillips that promises to detect fraud and abuse in government programs, according to records. The state of Mississippi awarded the company a nearly $1.7 million contract for work through 2023.
3. Engelbrecht’s own companies also have received contracts from True the Vote.
In 2015 and 2016, True the Vote paid ARC Network LLC and Ao2 LLC a total of $82,500 for “database license fees” and “software license fees,” respectively, according to its tax returns, which disclose that the companies are tied to Engelbrecht.
Court filings indicate that Engelbrecht owned 100% of ARC Network; she is listed as the owner of Ao2 in registration documents in Wyoming.
We couldn’t find other clients or a footprint for the two companies. But ARC Network was barred by Texas in 2015 from doing business, state records show. A business can be forfeited when a company doesn’t file a mandatory annual report showing its owner, directors and registered address – or when it does not pay taxes.
Bopp wouldn’t answer questions about who approved the contracts, saying that was confidential financial information. He said there was “nothing inherently wrong or improper with contracting with board members to do services for the corporation.”
“I’ve represented not-for-profits for 45 years,” Bopp said, “and it is common.”
However, a number of nonprofit legal and accounting experts who reviewed the documents said the transactions with Engelbrecht and Phillips raise a series of red flags.
“We always have concerns from a governance standpoint about organizations engaging in such transactions with insiders, and the organization’s behavior, in terms of its accounting and inconsistencies, only inflame those concerns,” said Brian Mittendorf, an Ohio State University accounting professor who specializes in nonprofit accounting.
Laurie Styron, executive director of CharityWatch, put it more bluntly: “This certainly looks really bad.”
4. The organization’s tax returns are riddled with inconsistencies and have regularly been amended, making it difficult to understand how True the Vote is truly spending its donations.
In one case, Engelbrecht provided us a copy of a 2019 tax return that was vastly different from the one available on the IRS website. The differences strike at the heart of our findings.
The IRS version showed Phillips as a board member. Englebrecht’s version did not. The IRS return showed Engelbrecht had a loan balance of $113,396. Engelbrecht’s version indicated the loan’s balance was gone. In response to questions from Reveal, Engelbrecht said she was going to submit an amended version of the group’s 2019 tax return – the one she’d provided to us – to the IRS.
What’s more, in the original IRS filing, True the Vote didn’t answer questions about whether it has policies around conflicts of interest, whistleblowers, document retention and how it determines Engelbrecht’s pay. “Importantly, it fails to answer questions about family or business relationships between officers and board members,” said Styron, of CharityWatch.
Because of that, she said True the Vote is “really a governance black hole.”
True the Vote says it did answer those questions in the amended return, but these kinds of omissions are common throughout its years of tax filings.
And as True the Vote has gained prominence, Engelbrecht has maintained an oversized control of the charity as its only employee in recent years and a member of a small board of directors that’s been packed with potential conflicts of interests. “That’s a real problem,” Styron said.
The federal government grants nonprofit organizations a special status, allowing them to operate tax-free in recognition of their public benefit. In exchange, they are subject to greater scrutiny and transparency to ensure that donor funds are being used properly.
Experts said an organization with more than $1 million in revenue typically would have more employees and a larger board. “These are public dollars, and the board members and officers of a charity have a fiduciary duty to … spend all of the resources of the charity carrying out the mission of the organization to the best of their ability in ways that benefit the nonprofit,” Styron said. “Not in ways that benefit them personally.”
5. One of the two agencies that would hold True the Vote accountable, the Texas attorney general’s office, is led by an ally of Engelbrecht’s, Ken Paxton.
Experts called on the IRS and Paxton to investigate whether insiders were improperly benefiting from donor money.
And Paxton’s office has already played a key role in a lawsuit filed by a True the Vote donor who said his $2.5 million donation to stop the certification of the 2020 election was essentially pocketed by Engelbrecht, Phillips and Bopp.
In court filings in that lawsuit, Paxton’s office said it would review the case to see if any action is warranted. The suit eventually was dismissed by a judge, who sided with True the Vote when it argued that it was up to Paxton – not the courts – to resolve. It’s unclear what, if any, action the attorney general has taken.
Reveal sought his office’s communications about True the Vote through Texas public records law, but he refused to disclose them, citing attorney-client privilege.
Paxton has appeared on Engelbrecht’s podcast and been an active supporter of attempts to overthrow the 2020 election.
6. True the Vote’s questionable financial transactions have also ensnared one of the legal architects of the modern conservative movement, James Bopp Jr.
Bopp has helped dismantle abortion rights, crafted many of the arguments in the Citizens United case that revolutionized campaign finance law and was part of the legal team that prevailed in Bush v. Gore. He’s also True the Vote’s general counsel.
He never served on the organization’s board and doesn’t face the same potential conflicts of interest as Engelbrecht and Phillips do for some of their transactions, but he has come under scrutiny for the amount he billed for a failed challenge to the 2020 election.
True the Vote provided Bopp’s law firm a retainer of at least $500,000 to lead a legal charge against the results of the election, but he filed only four of the seven lawsuits promised to a $2.5 million donor, all of which were voluntarily dismissed less than a week after being filed.
In court records, the donor said Bopp’s firm billed for more than $183,000 over a five- to seven-day period, in addition to more than $97,000 to supervise those attorneys. The donor called the amount billed by Bopp’s firm “unconscionable” and “impossible.”
Bopp said he dropped the lawsuits because courts didn’t act on them fast enough for him to acquire voter data.
He said his work was efficient – “remarkably cheap” – and dropping the lawsuits was the financially responsible thing to do. “Why the hell am I being criticized for trying to save my clients money rather than just go forward?” he said. “Knowing that it’s highly unlikely that any of the legal work that I do will bear any fruit whatsoever? I mean, I should be praised for saving the client’s money.”
Reporter Ese Olumhense contributed to this story. It was edited by Andrew Donohue and copy edited by Nikki Frick.
Cassandra Jaramillo can be reached at cjaramillo@revealnews.org. Follow her on Twitter: @cassandrajar.
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