DOJ probing Democrat funder Hoffman, attorneys, not E. Jean Carroll

The Department of Justice announced an investigation into Reid Hoffman’s nonprofit, American Future Republic, which funded E. Jean Carroll’s lawsuit against President Donald Trump.

Some media outlets initially reported the probe as an investigation into allegations Carroll committed perjury after she testified she was not receiving outside funding for the lawsuit.

CBS News previously cited an anonymous source claiming Carroll herself was under investigation. But the DOJ said Carroll is not, and has never been, the target of a federal criminal investigation.

“In light of widespread reporting and intense media and public interest into the E. Jean Carroll matter in New York, the Chicago U.S. Attorney’s Office can confirm that it has not opened – and has never opened – a criminal investigation into E. Jean Carroll,” Andrew S. Boutros, U.S. attorney for the Northern District of Illinois, said in a statement. “Any claim to the contrary is categorically false.”

Federal prosecutors in Chicago are instead examining several issues tied to Hoffman’s nonprofit financing of Carroll’s litigation.

One issue is whether American Future Republic misrepresented its activities to the IRS.

The nonprofit is registered as a 501(c)(4) social welfare organization.

“The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office,” the IRS states. “However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity.”

Its 2020 Form 990 shows American Future Republic paid $7 million directly to Kaplan Hecker & Fink, the law firm representing Carroll in her lawsuits against Trump. The filing described the payment as “Public Interest Litigation.”

An analysis by The Lion of the nonprofit’s tax filing found the group spent an additional $14 million in 2020 on voter turnout, voter registration, U.S. Senate races, messaging strategies and anti-Trump Republican testimonials, bringing total expenditures to roughly $21 million.

Prosecutors are reportedly examining whether directing $7 million to a private law firm for litigation targeting the nonprofit founder’s most prominent political opponent qualifies as permissible social welfare activity under the organization’s tax-exempt status.

The arrangement also drew scrutiny because of its structure.

Hoffman adviser Dmitri Mehlhorn told The New York Times the original grant went to Kaplan Hecker & Fink for another public-interest lawsuit before the firm later asked whether the funds could be redirected to Carroll’s case against Trump.

Mehlhorn said the organization did not initially know the money would support Carroll specifically.

The New York Times tried to sell the money as a third-party speculative investment by Hoffman into a share of earnings for the lawsuit.

But if it was, that would be a prohibited activity for a 501(c)(4).

It is not the first time Hoffman’s political spending has generated controversy.

In 2018 he apologized for giving money to American Engagement Technologies.

The firm ran a Russian-style disinformation campaign against Republican Senate candidate Roy Moore in Alabama, creating fake social media bots designed to link Moore to the Kremlin, reported NBC News.

Hoffman said at the time he was unaware of the project.

“I find the tactics that have been recently reported highly disturbing,” Hoffman said at the time, according to NBC.

Federal prosecutors could also examine whether Carroll’s attorneys met their obligations to the court regarding disclosure of outside funding.

During an October 2022 deposition, Carroll testified no outside party was financing her lawsuit. Kaplan Hecker & Fink had already received the $7 million payment.

The funding was not publicly disclosed until April 2023, shortly before trial and after Trump’s legal team repeatedly sought information about the source of financing.

Carroll later said she had forgotten about the arrangement.

Trump’s legal team argued Carroll’s attorneys independently had a duty to disclose the funding arrangement.

“Indeed, it simply defies logic to believe that [Carroll’s] attorneys – four of whom were present at her deposition – were unaware that their own firm had ‘secured additional funding from a nonprofit organization’ to bankroll their client’s various lawsuits and ensure their bills were being paid,” Trump’s attorneys argued at the time, according to the Daily Beast.

Acting Attorney General Todd Blanche recused himself from the matter because of his previous role as Trump’s personal attorney in the Carroll litigation.

Hoffman, the LinkedIn co-founder and major Democratic donor, said publicly he would spend heavily to prevent another Trump presidency.

In 2024, he gave $7 million to a Kamala Harris super PAC and said he hoped Harris would replace then-FTC Chair Lina Khan, whose agency was investigating Microsoft, where Hoffman serves on the board, according to CNN.