Washington D.C. Attorney General Brian Schwalb is investigating judicial activist Leonard Leo and his network of nonprofit groups, according to a person with direct knowledge of the probe.
The scope of the investigation is unclear. But it comes after POLITICO reported in March that one of Leo’s nonprofits — registered as a charity — paid his for-profit company tens of millions of dollars in the two years since he joined the company. A few weeks later, a progressive watchdog group filed a complaint with the D.C. attorney general and the IRS requesting a probe into what services were provided and whether Leo was in violation of laws against using charities for personal enrichment.
David B. Rivkin Jr., an attorney for the parties in the investigation, said in a statement that the complaint “is sloppy, deceptive and legally flawed and we are addressing this fully with the DC Attorney General’s office.”
The news of the investigation comes as the nonprofit that was a subject of the complaint quietly relocated in recent weeks from the capital area to Texas, according to paperwork filed in Virginia and Texas. For nearly 20 years the nonprofit, now known as The 85 Fund, had been incorporated in Virginia.
Gabe Shoglow-Rubenstein, Schwalb’s communications director, declined to confirm or deny the existence of the probe, including whether the attorney general took any action in response to the complaint.
Schwalb, who took office in January, has a background in tax law and served as a trial attorney in the tax division of the Department of Justice under President Bill Clinton.
Best known as Donald Trump’s White House “court whisperer,” Leo played a behind-the-scenes role in the nominations of all three of the former president’s Supreme Court justices and promoted them through his multi-billion-dollar network of nonprofits. Trump chose his three Supreme Court picks, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett, from a list drawn up by Leo. More recently, Leo was the beneficiary of a $1.6 billion contribution, believed to be the biggest political donation in U.S. history.
He is also the co-chair of the Federalist Society, the academic arm of the conservative legal movement, for which he worked in various capacities for decades while building his donor base.
While Leo grants few interviews, in mid-July he was featured in a two-part podcast with the Maine Wire, a conservative news organization. Asked why he’s become a “lightening rod for criticism,” Leo cited his commitment to “defend the Constitution” and spoke about the “long history” of dark money in U.S. politics.
“It’s not to hide in the shadows,” he said. “It’s because we want ideas judged by their own moral and intellectual force.”
He did not address any allegations of potential misuse of nonprofit tax law.
Real estate and other public records illustrate that the lifestyle of Leo and a handful of his allies took a lavish turn in the course of the making of the current ultraconservative court, beginning in 2016, the year he was tapped as an unpaid adviser to Trump. Citing the report, a progressive watchdog group called on the IRS and D.C. Attorney General a few weeks later to investigate whether the groups may be violating their tax-exempt status by “siphoning” assets or income for personal use.
Anthony Burke, a public affairs specialist with the IRS, declined to comment. “Under the federal tax law, federal employees cannot disclose tax return information,” he said.