Experts see 'red flags' at nonprofit raising big money for Capitol riot defendants
Experts see 'red flags' at nonprofit raising big money for Capitol riot defendants
In right-wing media, Cynthia Hughes has become one of the most prominent public faces representing families of the people held in jail, awaiting trial for allegedly attacking the U.S. Capitol on Jan. 6, 2021.
"Cynthia, you're a true patriot," former Trump adviser Steve Bannon told Hughes on his "War Room" podcast, where he included her in a roundup of "People of the Year."
Hughes, who lives in New Jersey, has become a regular on Bannon's show, where she and Bannon describe the 1/6 defendants as "political prisoners." On New Year's Eve, Bannon even pledged to send Hughes 1,000 coins from his new cryptocurrency venture, the "Let's Go Brandon" or FJB coin.
Bannon's promised crypto contribution added to the considerable pool of donations amassed by Hughes' group, the Patriot Freedom Fund — close to $900,000 as of early December, the group claimed. There are many online fundraisers for Capitol riot defendants, which have collectively raised millions from the small, but notable minority of Americans sympathetic to the Capitol riot defendants. Most fundraisers go directly to individual defendants.
Patriot Freedom Fund, by contrast, is incorporated as a nonprofit corporation, and describes itself as a kind of central hub — soliciting donations from the public to then provide services to families, including cash grants, gifts and legal aid. And they have asked for big donations. "We need somebody to drop us $500,000 today — today, Steve — because we need to have our own attorneys on these cases," Hughes said on Bannon's show in November 2021.
The group's pitch has attracted prominent supporters on the right, including Republican U.S. Senate candidate and "Hillbilly Elegy" author J.D. Vance, as well as the conservative filmmaker Dinesh D'Souza, who announced a $100,000 donation last year. Bannon has also promised that a portion of "transaction fees" from the "Let's Go Brandon" coin will go to the Patriot Freedom Project. And a former Trump administration official, Rachel Semmel, who previously worked in the White House Office of Management and Budget, is also volunteering with the group.
Because the Patriot Freedom Project says it is seeking tax-exempt status — which means it would not have to pay certain state and federal taxes, and donors could deduct their contributions at tax time — it has to comply with legal standards that for-profit organizations do not. And NPR's examination of the organization's public filings and court records uncovered what charity experts described as "red flags."
Among the experts' concerns: the composition of the group's board of trustees. The board is tasked with approving budgets, making sure the organization follows laws and regulations and setting any compensation for employees. According to public records, the three named trustees are Hughes herself, Hughes' sister-in-law and Hughes' 24-year-old son, who shares an address with his mother.
"When too many family members are in positions of authority at a charity, the independent oversight needed to ensure that donations will be used the way donors intend is significantly eroded," said Laurie Styron, who has spent nearly two decades examining nonprofits and is now the executive of the group CharityWatch.
One key role for those trustees, Styron said, is selecting and overseeing an organization's leadership. NPR's findings again raised questions, she said.
Over the last decade, NPR found, Hughes has filed multiple lawsuits, in which she represented herself, and publicly disclosed serious personal financial problems. In both 2013 and 2018, for example, Hughes sued credit rating agencies, seeking thousands of dollars in damages and changes to her credit rating. Hughes stated in court documents that she had struggled with late payments, poor credit scores and the ripple effects of filing for bankruptcy in the 2000s. In each case, the parties either settled the claims, or the cases were dismissed outright.
"How likely would it be, right, for a completely independent board of directors at a charity to actually elect someone with that kind of personal financial history and legal history to be the head of the nonprofit?" Styron questioned.
Another potential warning sign: The Patriot Freedom Project also has yet to file the required paperwork registering as a charity in its home state of New Jersey, according to authorities there.
"Certainly, from a governance perspective, CharityWatch would give them a failing grade," said Styron.
And it's not just charity watchdogs raising concerns. Family members of some alleged Capitol rioters have questioned what the group's criteria are for sending donations, and begun pushing for more transparency.
"A few of us have asked for transparency and got NO WHERE," said one family member, whose relative is currently in jail pending trial. (They requested anonymity out of concern of backlash from the organization and its supporters.)
The Patriot Freedom Project's website currently features their relative's photo alongside links to donate to the group. But this family member told NPR that on conference calls with Hughes, they have struggled to get specific information about exactly who is receiving money and why.
"People deserve to know where their money is going," said Molly, whose cousin, Kyle Fitzsimons, is in jail pending trial for charges related to the Capitol attack, which he denies. (Molly also asked NPR to withhold her last name, due to fears of backlash against her family.) She questions why a "middleman" group is even necessary. "It is really getting in the way of funding the individual's fund raisers," said Molly. "It is not the best way to donate."
NPR has verified that some families and lawyers have indeed been paid by the Patriot Freedom Project. But part of families' frustration stems from the fact that less than half of Patriot Freedom Project's donations had actually been disbursed by December 2021, according to the group's own statement.
Now, the families' criticisms have begun to surface in right-wing media.
"My personal belief is one should not donate to these big groups just because you saw them on Steve Bannon's 'War Room,'" Gavin McInnes recently told viewers of his own web show. McInnes, the founder and former leader of the Proud Boys, specifically cited concerns about the Patriot Freedom Project. Multiple members of the extremist group are currently being jailed pending trial for their alleged role in the attack on the Capitol. They have pleaded not guilty.
Hughes declined an NPR interview request, and directed questions to a spokesperson, who agreed to speak on the condition that they not be named.
The spokesperson did not address specific concerns from family members, such as their calls with Hughes, but argued that the group was a model of transparency. They pointed to a "Statement of Activities" document posted under the "1/6 News and Updates" section of its website. The spokesperson also said the presence of family members on the board of trustees was an asset, comparing it to a mom-and-pop operation. They said the organization is complying with all relevant laws and regulations, and said that the group also linked to some defendants' individual fundraisers on their website. The spokesperson declined to speak on the record about Hughes' legal disputes.
"Patriot Freedom Project exists to fight for political prisoners. The ones that are being attacked by our very own government and being denied due process and living in hellacious conditions in the DC jail," the spokesperson added in a written statement. "We will never stop fighting for these people, their families and children, and if the government funded media doesn't like it will do it even more."
Regardless of the group's politics, and its controversial approach to the Capitol riot, charity experts said the group should take concerns about transparency seriously.
"We know very little about this organization," said Sean Delany, a former assistant attorney general in charge of the Charities Bureau of the New York State Attorney General's Office. "However, what we do know presents some concerns."
The origins of the Patriot Freedom Project
The Patriot Freedom Project's origin story starts shortly after the Jan. 6, 2021 riot.
On Jan. 15, 2021, federal authorities arrested 30-year-old Timothy Hale-Cusanelli. Prosecutors alleged he recorded himself at the Capitol "screaming at and interfering with United States Capitol Police officers, climbing a scaffolding to enter the United States Capitol building through doors that had been kicked open by rioters, and chanting 'Stop the Steal' with other protesters." Hale-Cusanelli has pleaded not guilty to all charges. Hale-Cusanelli had served in the Army reserves and at the time of the riot was working as a security contractor at a Naval weapons station in New Jersey.
The Justice Department sought to hold Hale-Cusanelli in jail pending trial, citing interviews with coworkers, who described him as white supremacist and Nazi-sympathizer who frequently expressed hatred for Jewish people and other minority groups. "Hitler should have finished the job," Cusanelli allegedly told one coworker. The government also presented photos of Hale-Cusanelli with a "Hitler mustache." Hale-Cusanelli has denied that he is a white supremacist, though his own attorney acknowledged evidence that he is a "Holocaust Denier."
To try to secure Hale-Cusanelli's release, his attorney filed a letter from Cynthia Hughes in the court.
"I have known Tim his entire life, in fact I was present when he came into this world," Hughes wrote. "I was his mother's best friend." According to Hughes' letter, the friendship with Hale-Cusanelli's mother later soured, but she still considered Hale-Cusanelli akin to family and continued to provide him guidance. She now often refers to him as her "adoptive nephew."
In interviews since then, she has argued that Hale-Cusanelli's ideology is misunderstood, and compared him to a "shock jock" just looking to get a reaction. "It's not a crime to read certain history books that you can buy on, you know, Amazon, such as the book 'The Turner Diaries,'" Hughes said in one interview. (The Anti-Defamation League describes "The Turner Diaries" as "an apocalyptic, violently anti-Semitic and racist novel that has achieved cult status among far-right extremists.")
U.S. District Court Judge Trevor McFadden, a Trump judicial nominee, was unpersuaded, and ordered Hale-Cusanelli to remain in jail along with other defendants facing trial.
Around that time, Hughes began connecting with those defendants' families. "I decided to learn who the families were and connect with them and start a family support group which has now evolved into something bigger - helping these families," Hughes said in a podcast interview last year.
In July 2021, she launched a page on the Christian crowdfunding website GiveSendGo, and registered the website PatriotFreedomProject.com.
"With your generous donation, we can not only help the families of these defendants, but we can donate to legal defense funds to compensate the generous lawyers stepping up to assist," the group wrote in its pitch to donors. "We are working on how to best provide transparency for how the donations are spent while protecting family members. But the need is immediate!"
Public records indicate that Hughes incorporated the Patriot Freedom Project as a nonprofit in New Jersey in August 2021 under the legal name Hughes Advocacy Foundation. That group's stated mission is "to provide financial, emotional, and other charitable support and assistance to individuals and families with financial and other needs."
Around that time, Hughes also received the high-profile donation of $100,000 from Dinesh D'Souza.
Hughes made the rounds in conservative media, such as Steve Bannon's show, where she solicited donations for her new group, and touted the work of New York-based attorney Joseph D. McBride.
McBride represents five Capitol riot defendants, and he said the Patriot Freedom Project is providing money for the legal defense of one of his clients, Victoria White. (White is not currently being held in pre-trial detention, and has pleaded not guilty.)
McBride is one of the more high-profile and outspoken defense attorneys representing Capitol riot defendants. For example, he refers to the House Select Committee investigating the riot as a "communist witch hunt," and has made multiple appearances on Tucker Carlson's Fox News shows. In an interview, he told NPR he became a lawyer as a "second career" following work in tech, fitness and mixed-martial arts.
McBride praised Hughes effusively, though he said he was not familiar with the group's inner workings.
Hughes "has transitioned from somebody who lives in New Jersey and has an ordinary life to sort of being this public figure and at the forefront of the Jan. 6 family sort of movement," said McBride. "I think that what she's doing — stepping up despite having no experience in doing anything like this ever before — is an honorable and an awesome thing."
By December 2021, it was clear that Hughes' media appearances had paid off: the group reported that it had raised close to $900,000. The GiveSendGo page Hughes runs for Timothy Hale-Cusanelli individually has also raised more than $10,000.
The Patriot Freedom Project's rapid growth, however, raised some concerns among family members.
The two family members of Jan. 6 defendants who spoke to NPR each said they were worried about whether "favoritism" plays a role in how funds are distributed, because the group does not publicly list a set of detailed criteria for donations on its statement of activities. "I just want them to show WHO they helped and how much they helped them," said one family member in a message to NPR.
The group's statement of activities in December stated: "We are currently working with 9 criminal defense attorneys that represent 28 defendants, many of whom are willing to take on clients at a reduced rate." That document did not name those defendants, and that number represents a fraction of the more than 700 people who have faced federal charges stemming from the Capitol riot, including more than 70 held in pre-trial detention.
In one case, a defendant's decision to switch from a private attorney to a public defender also led to conflict. Cynthia Hughes has repeatedly criticized the work of federal public defenders and other government-appointed counsel, calling them "public pretenders." Defendant Zach Rehl, an alleged Proud Boy leader who has pleaded not guilty, was briefly represented by private attorney Jon Moseley. Moseley told NPR in an email that "Patriot Freedom Project sent me the first $10,000 installment of a promised gift of $20,000 towards Zachary Rehl's and his household's legal bills and expenses."
Then Rehl decided to switch to a government-appointed lawyer. Moseley said that decision led to an "uncomfortable" conversation with the Patriot Freedom Project. "They weren't happy," Moseley said.
Moseley said he still has the $10,000 from the Patriot Freedom Project held in a trust account, and told NPR "I do not know what Patriot Freedom Project wants me to do about it." Moseley, for his part, blamed Rehl for the conflict, saying Rehl "threw a monkey wrench into the plans." Moseley said he remains firmly supportive of Hughes, and recently tweeted, "We need $20 million for Patriot Freedom Project's legal defense fund." However, Moseley said he had not yet found time to follow up with Hughes about the fate of the $10,000 or whether it will be applied to his legal fees for his representation of Rehl.
Meanwhile, the spokesperson for the Patriot Freedom Project said the group remains supportive of Rehl's family.
NPR was unable to reach Rehl or his family directly for comment.
The two family members who did speak to NPR also said Hughes was "defensive" when asked for additional transparency about how the donated funds were distributed. The spokesperson for the Patriot Freedom Project disputed that characterization.
When NPR asked attorney Joseph McBride about such concerns, he said he did not know the "intricacies" of the group's finances, but was confident in Hughes.
"That money is going to go to good use," McBride said. "I don't know what good use that will be. It could be one of a million different kinds of things, but it will go toward something good, toward something that's January Sixth-related."
He added that NPR should tread carefully when reporting on such concerns, "because if it's wrong, I'm telling you right now there are going to be a lot of people out there who are going to want retribution for defamation because she's done so much good for so many people."
The view from charity experts
Experts in charity law said there were reasons to closely scrutinize the Patriot Freedom Project.
"I'd want to know about compensation levels for the individuals who are involved and how those compensation levels were set," said Sean Delany. "I'd want to know about what they represented to the IRS when seeking tax-exempt status. And based on that information, I might keep an eye on this organization going forward."
In December, the group said on its website that "no one has taken a salary," though they anticipated that will change.
"We expect to hire several employees in the next few months, all of whom will be paid reasonable salaries for the work they are doing," the group said. "We expect that the expenses incurred for management and fundraising will be relatively small. But it's too early to forecast a particular amount or percentage." In general, the less money spent on overhead, the better, charity experts say. According to Charity Navigator, 70% of charities spend 75% or more of their budgets on program expenses, rather than fundraising or other administrative costs.
All of those decisions are supposed to be overseen by the organization's board of trustees - in this case, Hughes herself and her family members. NPR sent messages to both trustees, Deborah DiMichele and Joseph Bodtmann, but did not receive a reply.
"No one is going to get rich off the Foundation," the group has promised.
Right now, independently verifying that claim remains difficult. The Patriot Freedom Project is not yet obligated to provide its IRS paperwork to the public, according to the Washington, D.C.-based attorney that incorporated it, Charles M. Watkins.
Still, under New Jersey law, charities are required to register with the state Attorney General's office within 30 days of raising $10,000 in a fiscal year. Gema de las Heras, the Public Information Officer for the New Jersey Attorney General's Division of Consumer Affairs, told NPR that neither the Patriot Freedom Project nor the Hughes Advocacy Foundation had registered with the state yet. De las Heras declined to comment on whether the organization was violating state law, citing general agency policy.
And because the group said in December that it is "preparing an application for tax-exempt status," Styron said, donors should be aware that the IRS may not accept that application — meaning those big-money donations would potentially not be deductible at tax time.
In general, Delany said, donors should be cautious about where they send their money after a major event that leads to massive public attention, whether it's a natural disaster or the Capitol riot.
"Donors respond often emotionally when we're talking about a crisis that arouses their sympathies," said Delany. That's one good reason, Delaney said, donors should be even more careful about vetting groups they donate to.
Molly, the family member of accused rioter Kyle Fitzsimons, said she has struggled ever since Jan. 6, 2021 to figure out which of the many fundraisers, independent groups, and attorneys have her family's best interests at heart.
"It's been very hard finding people I can actually trust," she said.