Feds Are Asking Questions About Sidney Powell and Her Pro-Trump Group

  • In Politics
  • 2021-11-30 18:29:13Z
  • By The Daily Beast
Photo Illustration by Thomas Levinson/The Daily Beast/Getty
Photo Illustration by Thomas Levinson/The Daily Beast/Getty  

Ever since Sidney Powell spearheaded one of then-President Donald Trump's efforts to nullify the 2020 election, she has found herself on the wrong side of a flurry of potentially ruinous lawsuits. But voting machine-related woes are only part of the notorious MAGA lawyer's deepening troubles.

For months, a federal investigation running out of Washington, D.C., has been demanding documents and asking potential witnesses questions about Powell, according to three people familiar with the matter. Similarly, a separate investigation into Powell's anti-democratic activities took place in the Sunshine State earlier this year-and has already produced results and punished Powell and her far-right group.

The federal probe, which has not been previously reported, is examining the finances of Defending the Republic, an organization founded by Powell to fund her "Kraken" lawsuits to overturn the 2020 election, the sources said. According to two of the people familiar with the matter, a grand jury was empaneled, and subpoenas and documents requests have gone out to multiple individuals as recently as September.

Defending the Republic's finances have already prompted an investigation and a settlement with Florida's charity regulator. The group paid a $10,000 fine in September as part of a settlement agreement related to its solicitation of contributions and failure to register as a charitable organization in the state.

In secretly recorded conversations released by erstwhile Powell ally Lin Wood over the past few days, former Overstock.com and Defending the Republic CEO Patrick Byrne accused Powell of pocketing funds from the group in order to pay for her defense against a billion dollar defamation suit filed against her by Dominion Voting Systems.

Neither Powell nor representatives of Defending the Republic responded to requests for comment on this story. Neither Powell nor Defending the Republic has been charged with a crime.

Powell created Defending the Republic with great fanfare in December 2020 and listed a who's who of pro-Trump election conspiracy world on its incorporation paperwork. The group's board originally included former Trump national security advisor Mike Flynn, his brother Joe, and Q-anon enthusiast Lin Wood, a fellow Trump-connected lawyer who recently started feuding with Powell. Attorneys for Defending the Republic claim that Wood was mistakenly listed as a board member and subsequently removed from registration filings.

Overstock.com founder Patrick Byrne, who briefly served as Defending the Republic's CEO, says he had his own concerns about the group's finances.

In a phone call with Wood that Wood surreptitiously recorded, Byrne claimed that Byrne, Michael Flynn, and Flynn's brother Joseph Flynn quit the group in April after Powell refused to allow an audit of Defending the Republic's accounts.

"I gave her a laundry list of things she had to clean up and told her she had to get an auditor," Byrne told Wood on the call.

Wood released audio of the call last week as part of a larger feud with one-time friends like Flynn and Powell. Byrne confirmed the call's authenticity to The Daily Beast.

According to Byrne, Powell had received a wave of donations in the aftermath of the election after being praised by mega-popular right-wing radio host Rush Limbaugh. But the donations were often given haphazardly, sometimes as a dollar bill or quarter taped to a postcard addressed to Powell's law office. Byrne claims he discovered that Powell had amassed a fortune in contributions, somewhere between $20 and $30 million but provided no evidence to support the claim. A projected budget for Defending the Republic filed with the state of Florida lists only $7 million in revenue for the group.

Defending the Republic's funds weren't going towards the pro-Trump goals donors likely envisioned, according to Byrne. Instead, he claimed they were spent on paying legal bills for Powell, who has faced court disciplinary issues and a daunting billion-dollar defamation lawsuit from Dominion Voting Systems.

"It shouldn't be called 'Defending the Republic,'" Byrne said in the recording. "It should be called 'Defending the Sidney Powell.'"

Attorneys for Dominion have also raised questions about the finances for Defending the Republic, which the voting technology company has sued alongside Powell. In court documents filed in May, Dominion accused Powell of "raiding [Defending the Republic's funds] to pay for her personal legal defense."

Dominion attorneys claimed in the filing that Powell began soliciting donations to Defending the Republic before officially incorporating the group. That sequence, they argued, meant that donations for the group "could not have been maintained separately in a bank account" and "would have necessarily been comingled in bank accounts controlled by [Powell]."

'Kraken Queen' Sidney Powell Is Now on Trump's 'No-Go List'

While working as Defending the Republic's CEO, Byrne said he became concerned that Powell was using the money for herself and may have potentially violated the law in the process. Byrne said he had determined that he faced no legal liability himself, but had been tempted to "drop a dime on" Powell and alert law enforcement.

"Sidney's just running this as a scam," Byrne told Wood.

Defending the Republic's finances first attracted the scrutiny of regulators in Florida shortly after Powell founded the group in November 2020 when authorities received a complaint and subsequently issued a subpoena to Internet hosting service GoDaddy for information about the group's website.

In a June press conference, Florida Agriculture Commissioner Nikki Fried said Defending the Republic was "found to be soliciting contributions from the State of Florida or from persons within the State of Florida" on the Internet "without having filed in the State of Florida" as a charitable organization."

On August 24, Defending the Republic paid a $10,000 fine as part of a settlement agreement with Florida authorities over its fundraising.

As part of that agreement, Powell's group agreed to register as a charity in Florida and submitted a projected budget of over $7 million. The settlement agreement also requires Defending the Republic to submit an audited financial statement for the group's operations between December 2020 and July 2021 by Nov. 30, including a balance sheet and list of expenses and revenue.

Under Fried's tenure as Florida's agriculture commissioner, her department has pursued high-profile investigations involving charitable organizations accused of wrongdoing. In 2019, Fried's office investigated consumer complaints about a charity, We Build the Wall, run by Brian Kolfage and former Trump advisor Steve Bannon. The investigation led to a federal indictment of Kolfage and Bannon on fraud and money laundering charges (Trump subsequently pardoned Bannon).

Practically all of Powell's ongoing legal woes and mounting expenses stem directly from her devotion to Trump, and to his cause of clinging to power in spite of Biden's decisive 2020 victory. Nowadays, the favor has, naturally, gone unreturned. She was once a key figure in Trump's orbit. Now, she's been abandoned and effectively barred from his properties and private clubs.

"I have not sought to contact the President in any way since long before he left office," Powell told The Daily Beast in late September. "My quest is simply for the Truth. The American people are fed up with lies from government and media."

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