Washington, D.C.’s Democratic Attorney General Brian Schwalb has launched an investigation into conservative judicial activist Leonard Leo’s network, a move that Leo’s attorney says is a politically motivated attempt to silence Leo and his associates. In August, Politico reported that Schwalb had initiated a probe into Leo and his affiliated organizations, prompted by a complaint from the left-wing Campaign for Accountability. The complaint alleges that Leo has enriched himself with consulting fees through his network.
The Campaign for Accountability was initially a project at Arabella Advisors, a for-profit consulting firm managing the largest liberal dark money network in America. Arabella Advisors oversees a vast web of groups and has a consulting fee arrangement similar to that of Leo’s for-profits and nonprofits. Since becoming an independent organization, the Campaign for Accountability has received millions of dollars in funding from groups within the Arabella-managed network.
Seth Rosenthal, Schwalb’s deputy, has connections to a left-wing judicial group that has targeted conservative Supreme Court justices in the past. Leo, as the co-chairman of the Federalist Society and a former judicial adviser to President Donald Trump, has consistently been a target of Democrats.
Leo’s attorney, David Rivkin, called Schwalb’s investigation a politically driven fishing expedition aimed at silencing Leo. According to Rivkin, there are no legal or factual grounds for the investigation, and the complaint itself is ironic considering its source, the Arabella Advisors Network. Rivkin argues that any attempt to weaponize the legal system for political purposes undermines justice, which he believes is desperately needed in Washington, D.C. due to rampant crime.
The complaint against Leo, which forms the basis of Schwalb’s probe, alleges that Leo “misused” nonprofit funds by diverting $73 million to his for-profit companies for consulting services between 2016 and 2021. It should be noted that the Leo-linked groups are outside Schwalb’s jurisdiction. The Campaign for Accountability’s Executive Director Michelle Kuppersmith has also sent the complaint to the IRS and Schwalb’s office, urging them to examine the materials and revoke the tax-exempt status of the seven nonprofits associated with Leo.
The Arabella-managed network includes the New Venture Fund, Sixteen Thirty Fund, and Windward Fund. These funds raise over a billion dollars annually from anonymous donors and provide fiscal sponsorship to numerous liberal nonprofits. Tax documents reveal that the New Venture Fund has sent at least $2.2 million to the Campaign for Accountability after it broke away from the network. This funding accounted for a significant portion of the organization’s annual revenue.
Campaign for Accountability’s complaint is centered around Leo’s alleged enrichment through consulting fees, a practice that closely mirrors Arabella Advisors and the funds it manages. Between 2016 and 2021, Arabella Advisors earned $190 million in fees for administrative and management services, significantly surpassing the consulting fees received by Leo’s nonprofits. Arabella Advisors states that it regularly evaluates its fee structure to provide the best value to its nonprofit clients.
Although the Campaign for Accountability’s complaint does not provide direct evidence of its accusations, Schwalb’s office is now requesting documents from several organizations linked to Leo. It is worth noting that both Schwalb and Rosenthal have ties to Venable law firm, which has represented groups within the Arabella-managed network. Rosenthal also previously worked at the left-wing dark money judicial group, the Alliance for Justice.
The Alliance for Justice has been involved in efforts to influence President Biden’s judicial nominations, including the appointment of Supreme Court Justice Ketanji Brown Jackson. The D.C. attorney general’s office has not confirmed the existence of any investigation as a matter of policy. Senators Sheldon Whitehouse and Dick Durbin have also targeted Leo, sending a letter to Leo…
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