Scott Bessent eyes ‘top cop’ for Treasury to crack down on shady nonprofits

The Treasury Department is seeking a new “top cop” to oversee nonprofits that abuse their charity status to avoid taxes, according to sources.

Treasury Secretary Scott Bessent is looking to appoint a senior official to monitor charities engaging in excessive political activities, lobbying, or fraud.

Michael Friedman, the former chief of staff who recently joined the SEC, was tasked with compiling a list of potential candidates for the position.

This initiative follows reports that the Treasury Department is planning to crack down on nonprofits that misuse their tax-exempt status for questionable political activities.

The appointed official will have the authority to lead an interagency task force to address “abusive” 501(c)3 organizations, as per a source familiar with the situation.

The Treasury Department spokesperson referred back to a statement from January 9, emphasizing Secretary Bessent’s commitment to preventing fraudulent nonprofits from taking advantage of taxpayers.

The search for a charity oversight official comes in the wake of the Minnesota Somali fraud scandal, where nonprofits were found to have misused federal funds for personal gain.

Amidst these developments, the Council on American-Islamic Relations (CAIR) has also faced scrutiny and potential loss of nonprofit status under Bessent’s enforcement.

CAIR, known for organizing pro-Palestinian events, has been accused of receiving funds from entities with connections to Qatar.

Several governors have taken steps to designate CAIR as a terrorist organization due to alleged ties to extremist groups.

Concerns have been raised about the political influence of certain nonprofit organizations, particularly those funded by foreign entities.

A 501(c)(3) designation grants tax-exempt status to nonprofits operating for the public good, with restrictions on political campaigning and lobbying.

Any organization deviating from these guidelines risks losing its tax-exempt status and facing reclassification.

Experts emphasize the importance of ensuring that actions against such groups are based on facts and law, rather than political motives.

It is crucial for these measures to be carried out impartially and transparently to maintain credibility and effectiveness.