O’Keefe’s Personal Spending Risked Project Veritas Tax Exemption

ACORN IRS Non-Profit

Marble Falls       One of the classic ACORN caveats was always, “if you live by the press, you’ll die by the press.”  This was always a reminder that our base always came first and last, so that we should never be distracted by external attacks – or praise and press clippings – but should always mind our members.  James O’Keefe and his various organizational fronts, including in recent years, the ill-named Project Veritas, lived in the media, both Fox News and beyond, to distribute its sleaze, stings, and scams to right whacks and innocent bystanders.  Having lived by mainlining media, now he and Project Veritas are being bled out by the media as well.

In short, O’Keefe is now being hoisted by his own petard as he tries to spin a future out of his disastrous resignation and all the internal documents and discussions that led to his resignation from Project Veritas, which he founded in 2010 and had been the CEO until recently.  What was private is now public as the sides are drawn, and his team, schooled in trying to manipulate the media, turns the table on him, as he tries unsuccessfully to save himself.  Wisely, he is refusing to comment on many of the mainstream stories, especially since so many of them quote chapter and verse from his own misdeeds leading to his job suicide.

Reporters for the Washington Post are now on this story like a dog on a bone.  Having won a Pulitzer Prize in 2018 for their reporting on Alabama’s Republican US Senatorial candidate Roy Moore and his sexual improprieties, no small part of the backstory had also been their under covering of an attempt by O’Keefe and Project Veritas to plant a fake story through one of their operatives, claiming an affair at 15, which would discredit the original reporting.  Payback is hell, and they are hard on O’Keefe’s latest problems.  The Post now reports that the Project Veritas board’s investigations of O’Keefe and their action in returning staff, which he had no right to fire, and putting him on paid leave was prompted by concern that they would lose their organizational tax exemption.  In answer to the claims that there is no Project Veritas without James O’Keefe, as some of his supporters have claimed, they report that a recent memo from the board to the staff “…warned, “THERE IS NO PROJECT VERITAS WITHOUT THE IRS,” referring to the Internal Revenue Service, which regulates nonprofits.”

No further detail was offered, but IRS circulars are clear that the number one way that an organization can lose its 501c3 tax-exempt status is through Personal Benefit/Inurnment.

  1. Private Benefit/Inurnment

Private benefit:

A 501(c)(3) organization’s activities should be directed toward some exempt purpose. Its activities should not serve the private interests, or private benefit, of any individual or organization more than insubstantially.


A 501(c)(3) organization is prohibited from allowing its income or assets to benefit insiders – typically board members, officers, directors and important employees of an organization. If an organization benefits insiders, the insiders and the organization could be subject to penalty excise taxes and the organization could lose its tax-exempt status.

The IRS doesn’t mince its words and its meaning is clear.  The Project Veritas board is still investigating, but the Post reported from its statement that,

… an ongoing review had already found evidence of “financial malfeasance” — specifically, that O’Keefe “has spent an excessive amount of donor funds in the last three years on personal luxuries.” It accused him of spending $14,000 on a charter flight under the pretense of seeing a donor but instead to meet someone to fix his boat; paying $60,000 for theatrical productions; and shelling out $150,000 for drivers over the previous 18 months.

If that’s not personal inurnment, then there is no such thing as personal inurnment.  O’Keefe is guilty as charged, no matter his lame claims to the contrary.

Will Project Veritas lose its tax exemption?  No, the IRS might take a look for sure, given all the media attention, but since the board has acted to separate from O’Keefe, and he’s now gone, they won’t have any trouble holding onto that status.  Compared to how profligate hospitals are while being miserly about charity to justify their tax exemptions, or how the NRA kept their exemption after countless instances of inurnment by top executives, this is small potatoes.

On the other hand, will O’Keefe easily be able to apply for a tax exemption for a new organization given his documented record of inurnment at Project Veritas?  Doubtful.  That would be a much harder climb.  It wasn’t easy for Veritas to get a tax exemption in the first place.  O’Keefe might need one of his buddies like Trump or some Trump-wannabe to end up in the White House to convince anyone at the IRS after this fiasco that anything he has to do with is about anything other than about him.