The Southern Poverty Law Center is facing federal fraud charges for allegedly improperly raising millions of dollars to secretly pay leaders of the Ku Klux Klan and other hate groups for inside information.
Acting Attorney General Todd Blanche made the announcement Tuesday.
The Justice Department alleges the civil rights group defrauded donors.
The group did this by using donor funds to fund the very extremism it claimed to be fighting.
More than $3 million was paid to informants through a now-defunct program to infiltrate white supremacist and other extremist groups.
Prosecutors say some of the money was used by extremists to carry out other crimes, but court papers did not cite specific examples.
“The SPLC was not dismantling these groups. It was instead manufacturing the extremism it purports to oppose by paying sources to stoke racial hatred,” Blanche said.
The Southern Poverty Law Center faces charges of wire fraud, bank fraud and conspiracy to commit money laundering.
The case was brought in the federal court in Alabama, where the organization is based.
The indictment came shortly after the SPLC revealed the existence of a criminal investigation into its disbanded informant program to gather intelligence on extremist group activities.
The group said the program monitored threats of violence and the information was often shared with local and federal law enforcement.
The SPLC said it “will vigorously defend ourselves, our staff, and our work” against what it called false allegations.
The group said its informant program saved lives.
“Taking on violent hate and extremist groups is among the most dangerous work there is, and we believe it is also among the most important work we do,” interim CEO and president Bryan Fair said. “The actions by the DOJ will not shake our resolve to fight for justice and ensure the promise of the Civil Rights Movement becomes a reality for all.”
The Justice Department alleges the SPLC provided false statements to banks in order to set up accounts used to funnel money to informants.
The group created bank accounts for fictitious entities such as “Fox Photography” and “Rare Books Warehouse” that were used to send money from donors to informants, in a scheme to conceal the money’s actual purpose, the indictment alleges.
Prosecutors say the group never disclosed to donors details of the informant program.
“They’re required to under the laws associated with a nonprofit to have certain transparency and honesty in what they’re telling donors they’re going to spend money on and what their mission statement is and what they’re raising money doing,” Blanche said.
The SPLC, based in Montgomery, Alabama, was founded in 1971 and used civil litigation to fight white supremacist groups.
