New Venture Fund Attorneys Order Group To Prepare Records for DC Attorney General Probe, Internal Documents Show

D.C. attorney general Brian Schwalb (@attorneygeneralbrianschwalb75 YouTube)
October 5, 2023

Attorneys for the New Venture Fund have ordered the charity to preserve records about its internal operations to comply with a subpoena from the attorney general of the District of Columbia, according to documents obtained by the Washington Free Beacon.

The scope of the investigation is sprawling, according to a document preservation request sent to New Venture Fund on Sept. 27 by the charity's attorney at Levy Firestone Muse. The document indicates that the D.C. attorney general is investigating whether the New Venture Fund and other groups under the umbrella of the liberal dark money behemoth Arabella Advisors are abusing their tax-exempt status for political purposes. Such legal scrutiny over the left's dark money network is unprecedented and unexpected from a Democratic attorney general.

Although the legal inquiry into the New Venture Fund's operations is in its early stages, the ramifications could transform how the largest Democratic donors in the country, such as George Soros, funnel their money into various causes. If Arabella's funds were stripped of their nonprofit status, it would constitute a calamitous setback for the dark money behemoth, effectively rendering Arabella's business model inoperable.

The subpoenas, which were sent on Sept. 22, seek information on the finances and operations of the Arabella Advisors left-wing dark money network and all the nonprofit funds under its control, including New Venture Fund, the Sixteen Thirty Fund, the North Fund, the Windward Fund, the Hopewell Fund, and the Impetus Fund.

New Venture Fund Document P... by Washington Free Beacon

The New Venture Fund's attorneys ordered the charity to preserve all records related to its former employee Sarah Walker, who alleges she was wrongfully terminated in 2021 after warning her superiors that the charity was violating the law by secretly directing the partisan political activities of an ostensibly independent voting rights group, Secure Democracy. Those records include any transfers of funds that could "create a risk to the tax-exempt status of [the New Venture Fund], the Sixteen Thirty Fund, Secure Democracy, or the North Fund."

New Venture Fund abruptly shut down Secure Democracy within weeks of Walker blowing the whistle internally in late 2021. A former employee of the charity told the Free Beacon that the move to shut down Secure Democracy was in direct response to Walker's allegations.

The subpoena, which was first reported Tuesday by the Free Beacon, also constitutes another setback in what has been a bad year for Arabella Advisors. Two months after firing more than 30 employees due to financial troubles, the firm replaced its CEO in July. Arabella Advisors' network of left-wing advocacy groups raised a combined $3.3 billion in 2020 and 2021.

A spokesman for the D.C. attorney general declined to comment.

The New Venture Fund's attorneys also ordered the group to preserve documents related to its financial relationship with Arabella Advisors, which wields significant control over the charity's day-to-day operations. Information sought by the D.C. attorney general includes any contracts between Arabella Advisors and New Venture Fund, documents explaining the work Arabella provided to the charity, and any records showing whether New Venture Fund sought competing bids for Arabella's services.

A watchdog group alleged in August that Arabella and its founder, Clinton confidant Eric Kessler, misled the IRS to gain control of dark money funds, which have paid the consultancy a combined $230 million in management fees since 2006. Kessler and his lieutenants at Arabella have at times held leadership roles at the funds while they simultaneously paid management fees to the for-profit consultancy.

The New Venture Fund was also ordered to maintain records relating to any monetary transfers between it and Arabella's other funds. Those records would shed light on one of the secrets behind Arabella's success. The consultancy shuffles big money between its five funds—a combined $189 million in 2020 and 2021 alone—but is tight-lipped about the purpose of those transfers.

Spokesmen at the New Venture Fund and the Sixteen Thirty Fund told the Free Beacon on Tuesday that they would cooperate with the District of Columbia's investigation. A spokesman for Arabella Advisors said the firm is "confident in the systems we have in place to ensure our business conforms with legal and regulatory requirements."