Auditor: Zuckerberg-backed group’s lack of oversight likely contributed to election grant embezzlement

White discusses CTCL and the problems with the 2020 election grants.
White discusses CTCL and the problems with the 2020 election grants.(WLBT)
Published: Mar. 24, 2022 at 9:54 AM CDT
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JACKSON, Miss. (WLBT) - State Auditor Shad White said it was the perfect recipe for fraud.

The Center for Tech and Civic Life, a small nonprofit group, was given hundreds of millions of dollars to allocate to local governments for use during the 2020 elections.

However, he said the group provided little oversight on how that money was spent, leading to widespread misuse of the funds, including the alleged misspending of more than $300,000 in Hinds County.

The auditor is hopeful that what allegedly happened locally will be an impetus for lawmakers to pass legislation preventing governments from using private funds to fund elections in the future.

A conference report was passed Wednesday for H.B. 1365, which would prohibit state and local officials from soliciting and/or accepting private funds for elections or election-related expenses.

The bill now will go back to the House and Senate for a final vote, and, if passed again, will go to the governor for a signature.

“Any time that we conclude an investigation, my hope is, one, that we hold the individuals who are responsible accountable. (And), two, if there’s a policy failure, or if there’s a fix that can be made to state law to make this less likely to happen... I want to start that conversation,” White said.

If H.B. 1365 is approved, the bill would prohibit groups like local election commissions from applying for, receiving, and using private money, such as CTCL grants, to fund elections, election outreach, and the like.

Auditor Shad White discusses why private funding should not be used to pay for elections.

White said doing so could help cut down on the potential for embezzlement. It could also limit the potential for private dollars being used to sway election outcomes.

In Hinds County, three people, including a Hinds County Election Commissioner, were recently indicted on multiple charges related to embezzling more than $300,000 in funding from the Center.

The county applied for the funding to help keep voters and election workers safe during the COVID-19 outbreak. However, the auditor says a large chunk of those funds went to purchase flat-screen televisions and to pay companies for work that was never done.

In all, the county received more than $1.9 million in election grant money, much of that from CTCL.

Hinds was one of more than 30 counties in Mississippi that received funding for the 2020 election from the group, as well as some 2,500 local election offices across the nation, CTCL figures show.

Funding for those grants was provided to CTCL, in large part, by Mark Zuckerberg, the founder of Facebook, and his wife, Priscilla Chang.

The grants sparked debate across the country. National Public Radio reported that some local officials hailed Zuckerburg for helping save the 2020 elections, with local offices facing budget constraints and new expenses related to the pandemic.

Others have argued that the funds were used to sway the outcome of the 2020 election. White, in a March 2022 article at the Federalist, points to author Mollie Hemingway’s claims that “CTCL focused its funding on Democratic counties...” and that much of the funding “went to ‘measures that allowed election offices to hire activists to work the election.’”

White does not allege that Hinds County used funds to influence 2020 outcomes.

Auditor White discusses the uniqueness of the Hinds Co. embezzlement case

“Ours is the first case that I have seen where the money was not necessarily used to influence the election one way or the other,” he said. “But it was used in a way that was illegal, according to the allegations put forward by my office. And that’s why I think the case itself is kind of interesting.”

“Just taking a step back from the Hinds County case and looking more generally at CTCL, you know, if it happened here, then it’s certainly possible for it to happen in other places. And so my hope is that the word will get out about what happened here and that people will start asking questions in their own election offices and say, ‘OK, well, we’ve got this elections office in Kentucky, and they’ve got a big infusion of money during that 2020 election. What did they buy with it? And where did the property go?’”

“Those are the kinds of healthy questions that voters and taxpayers can ask. And if you discover that the money was spent appropriately, then great, but if you discover that you can’t put your hands on that TV that was purchased, then that’s also important.”

Invoices in Hinds County show that two 85-inch Samsung televisions were purchased using CTCL monies. White previously alleged that Commissioner Toni Johnson purportedly purchased the TVs and other personal protective equipment and had it delivered to her home and a second private residence.

Johnson, along with two accused co-conspirators, have pleaded not guilty in Hinds County Circuit Court.

Hinds County Election Commission spent grant money on televisions and other home appliances.
Hinds County Election Commission spent grant money on televisions and other home appliances.(WLBT)

Following the election of Democrat Joe Biden, some conservative-led states passed laws banning the use of private funds in elections.

According to the Capital Research Center, a think tank based in Washington, D.C., as of March 2022, 16 states had passed bans or restrictions on the use of private funds.

Speaker Philip Gunn, for instance, introduced H.B. 1365 during the 2022 session. The bill passed the House, was amended in the Senate, and was sent to conference.

Mark Zuckerberg aside, White says CTCL likely was ill-equipped to keep tabs on how the grants were used.

Between 2015 and 2019, the agency reported between $970,000 and $1.4 million in annual revenues. During that same time, total salaries and benefits for the agency ranged from $382,000 to as much as $863,000.

In 2020, the group reported $356 million in revenues and paid out salaries of $1.65 million, CTCL’s 990 Form for that year shows.

“In my experience as state auditor, it’s very difficult for organizations who don’t have experience dealing with a ton of money to take in a ton of money really quickly and then distribute it and make sure that (the) money is spent in the way that they want it to,” he said.

“When we look at nonprofit organizations that are handling state money, or we look at state agencies, any kind of arm of government, what we see is that the ones that do really well, if they have money to give out, will set up grant programs. And they’ll set up monitoring programs where they hand out money to somebody and they send somebody out to make sure they’re doing what they’re supposed to do with the money,” he added. “They’ll set up internal controls... So one thing we always recommend is if you’re going to spend a whole bunch of money really quickly, you don’t just hand out a bunch of cash.”

WLBT has reached out to CTCL and is awaiting comment.

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