Non-profit pays $1.3m for legal services to law firm owned by Republican official

The San Francisco lawyer Harmeet Dhillon is a fixture on Fox News who has garnered support from the likes of Matt Gaetz, Tucker Carlson and Laura Ingraham; she also helms a non-profit that appears to have directed more than $1m into her law firm, Dhillon Law Group.

Dhillon most recently made headlines when she signed on to represent Carlson in a gender discrimination lawsuit he and Fox News face from former producer Abby Grossberg. She also acted as an attorney for Donald Trump and former Project Veritas head James O’Keefe, who in 2021 sued Twitter for banning him.

Last November, Dhillon was able to mount a serious challenge to Ronna McDaniel for chair of the Republican National Committee (RNC). Archived snapshots of her campaign’s official website touted endorsements from elected officials such as Gaetz and conservative media figures such as Carlson, Ingraham and Jack Posobiec.

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Her growing profile proved a huge advantage. Since becoming an RNC committeewoman for California in 2016, she made hundreds of appearances in conservative media, predominantly Fox News. From 2019, these appearances were often based on lawsuits sponsored by that non-profit she helms, the Center for American Liberty (CAL), and aimed at rightwing bugbears like Covid restrictions, leftist street protesters and gender-affirming healthcare.

The Guardian has found that at least $1.32m has been transferred from the CAL to her law firm, Dhillon Law Group, in a move one charity expert described as “problematic”. Additionally, state and federal filings show Dhillon takes a $120,000 salary from CAL for a two-hour work week.

Meanwhile, the non-profit has entered into a close relationship with a well-heeled rightwing foundation whose financial generosity has been matched by a seat on the non-profit’s board.

CAL was founded in 2018, initially under the name Publius Lex, by California lawyers with extensive connections to Republican politics and rightwing legal organizations, according to state and federal filings. All of the founding members are still officers: president Jason Clark; treasurer Lee Cheng; secretary Christopher Hage; with Dhillon as CEO. A fifth founding member, Christopher Marston, is a Virginia-based Republican lawyer whose work includes non-profit compliance and who is listed as an officer for a wide array of organizations.

Publius Lex received little public attention until mid-2019, when Dhillon offered full-throated support to Andy Ngo, the far-right media performer and provocateur who was filmed being punched and doused with milkshakes in downtown Portland that June.

Ngo’s alleged assault became the focus of intense coverage in rightwing media: Dhillon either accompanied Ngo or was billed as his representative in eight appearances on Fox News alone in the following two months.

This helped cement Dhillon as a Fox News regular. In the three years following her 2016 debut on the network, she appeared as a guest on the network 70 times. In the three years beginning in 2019, the year she began advocating for Ngo, she appeared on Fox News 200 times, according to broadcast transcripts published by Nexis. She appeared most often on Tucker Carlson Tonight and The Ingraham Angle.

Days after Ngo’s assault, on 5 July 2019, Dhillon in effect relaunched the non-profit in a Twitter thread, writing that “the first cause Publius Lex will take up will be to advocate legally for Mr Andy Ngo, a journalist viciously assaulted in Portland by Antifa thugs” and directing supporters to a since-deleted crowdfunding page for Ngo’s legal expenses on the Publius Lex website.

That crowdfunding effort was successful: it shows up as a donor-restricted asset of $104,380 in the organization’s 2019 tax return, the first filed under its current name, CAL.

But another single-donor contribution of $500,000 contributed far more to CAL’s 2019 haul of over $690,000, a figure more than 20 times what they had raised in their first year.

In CAL’s published returns, the identity of that donor is redacted, but a separate tax return from the Adolph Coors Foundation that year reveals a grant of $500,000 to Publius Lex, which was among the foundation’s largest grants to any single recipient that year.

The Coors Foundation was established in 1975 by the heirs of the Colorado brewing magnate Adolph Coors II, and it has continued that family’s history of supporting rightwing causes. The foundation and the spinoff Castle Rock Foundation – which operated between 1994 and 2011 – have given significant funding over decades to rightwing activist organizations including the American Legislative Exchange Council (Alec), the State Policy Network and the Federalist Society, along with donations to community groups in Colorado.

On its website, the foundation says its aim is to educate Americans about “the wisdom of the free enterprise system, traditional Judeo-Christian values and the rule of law”.

The half-million donation in 2019 was just the start of the Coors Foundation’s largesse. Subsequent IRS filings indicate a $400,000 grant to CAL in 2020; $300,000 in 2021; and a 2022 filing published this week by ProPublica’s Nonprofit Explorer shows a further $200,000 contribution.

The running total of $1.4m is a significant chunk of the $7m lifetime income CAL reported as of 2021.

By 2020, according to CAL filings, the Coors Foundation chief executive, Carrie Coors, Tynan – the great-granddaughter of Adolph Coors II – had a seat on an expanded CAL board.

The Guardian emailed detailed requests for comment to Carrie Coors Tynan, Harmeet Dhillon, and the board president, Jason Clark.

None responded directly, but CAL’s executive director, Mark Trammell, emailed a response to the questions sent to Dhillon.

On Tynan’s board seat, Trammell wrote: “All board members are subject to the organization’s conflict of interest policy”, and “there is no conflict of interest in having the CEO of a grantmaking foundation that supports an organization also serve on its board”.

“Rather, it is both ethical and a best practice for board members to also financially support their nonprofits,” Trammell continued.

Non-profits must distinguish between program expenses – those made in pursuit of its mission – and expenses incurred by fundraising efforts and administration costs. Legal fees are a program expense for CAL, as is executive compensation.

In 2020, Dhillon Law was listed as the largest single contractor in CAL’s 990 IRS filing, receiving $814,714 in legal fees, which was over 45% of all program expenses that year, and 30% of its total expenses of almost $2.8m.

In 2021, Dhillon Law received $507,469 in fees from CAL, making it the second highest earning contractor. Dhillon began receiving a $120,000 annual salary without increasing her two-hour weekly commitment to the organization, according to that year’s 990 filing.

Together, then, Dhillon and her law firm were taking just over 37% of CAL’s program expenses that year.

On Dhillon’s weekly time commitment as reported to the IRS, Trammel wrote that “the 2021 Form 990 should show Ms Dhillon working 40 hours per week. That correction will be made shortly through an Amended Form 990.”

Trammell added that CAL is “governed by a Board of Directors, and Ms Dhillon’s compensation is set by disinterested board members. Ms Dhillon has no control over what salary the board pays her for her extensive CEO services, and the board has the authority to hire or fire the chief executive officer position.”

Dhillon’s position as CEO in a non-profit whose biggest contractor is Dhillon Law Group is a “conflict of interest”, according to Joan Harrington, a fellow at the Markkula Center for Applied Ethics at the Santa Clara University, and an expert on non-profit law and ethics.

Harrington added that non-profits can navigate this, and that “the board can accept conflicts of interest if they are brought to the board’s attention annually”.

But another ethical problem “the board can’t fix”, Harrington said, is the issue of compensation.

Several sources, including Charity Navigator’s 2016 CEO compensation study, put the amount of Dhillon’s annual salary roughly in line with expectations for the organization’s fundraising.

Harrington said non-profit boards can also approve high salaries, and so avoid tripping IRS rules about “excessive compensation”.

With her law firm being paid so much by CAL, Harrington said, and the law firm’s own financials hidden from public view, “we don’t know all the ways she is being compensated as CEO.”

Trammell, the executive director, wrote on the extensive use of Dhillon Law that “the organization’s day-to-day legal operations are managed by me, its executive director”, adding, “I select the law firms the Center for American Liberty partners with on its public interest litigation.”

Trammell also wrote: “We select law firms based on their expertise, geographical location, and interest in representing our clients at nonprofit legal rates.”

But Harrington added that “transparency protects donors, and this is not a transparent situation”.

With Dhillon acting as CEO and legal contractor, running cases sponsored by the non-profit, and making Fox News appearances in both guises, Harrington said: “It looks like Dhillon Law and the non-profit are overlapping to the extent that its hard to tell the difference.”

? The headline and standfirst were amended on 20 June 2023 to better reflect the text of the article. An earlier version included reference to Harmeet Dhillon taking a $120,000 salary for a two-hour week; while these figures are reported from official filings, the article also notes a representative for CAL saying there was an error in the 2021 Form 990 and that it would shortly be corrected to show Dhillon working a 40-hour week.