The indictment of the Southern Poverty Law Center on federal fraud charges this week is the start of what could become not just a major criminal prosecution but a major constitutional challenge. At issue is whether the Center’s secret operations to enlist and pay informers constituted fraud of its donors.

The center has long been controversial after drifting away from its early litigation against segregation and becoming more of a partisan organization targeting conservative organizations. I shared that criticism after the center went after groups such as Focus on the Family for opposing LGBTQ values.

It also drew outcries after focusing on Turning Point in a report titled “The Year in Hate and Extremism 2024” as “A Case Study of the Hard Right in 2024”.

The federal indictment alleges that the Center improperly paid informants to infiltrate extremist groups without disclosing the payments to donors. The Center insists that these were confidential informants and that law enforcement was informed of the results of these operations when they shared evidence with local and federal agencies.

The indictment cites pitches to donors that failed to mention that millions were given to figures in hate groups while pledging that “Your support powers our work to confront hate, stand up to injustice, and defend our civil and human rights. From the courtroom to the classroom to communities across the country, you can help create a more just and inclusive future for all.”

It is rare to see a private organization engaged in such clandestine operations, using confidential sources the way that the FBI does with drug and other criminal organizations.

Some of what is described in the indictment is surprising and, frankly, could form the basis for civil action by the targeted groups. For example, I was surprised by this graph in the indictment:

“F-9 was affiliated with the neo-Nazi organization, the National Alliance and C. served as an F for the SPLC for more than 20 years. F-9’s activities included fundraising for the National Alliance. Between 2014 and 2023, the SPLC secretly paid F-9 more than $1,000,000.00. In 2014, F-9 entered the headquarters of a violent extremist group and stole 25 boxes of their documents. F-9 coordinated payment for the copying of the materials with a high-level SPLC employee who had knowledge the documents had been stolen. The original stolen materials were returned to the violent extremist group in a second illegal entry by F-9.”

This individual was allegedly paid a million dollars for such services. The Center does not have any special authority to commit such acts. It reminds me of the cases involving media organizations.

Courts have previously held that reporters do not have any special privilege to commit trespass and may be sued for such offenses.  In Food Lion v. ABC, a store was shown in an undercover segment engaging in unsanitary practices, and Food Lion was accused of selling rat-gnawed cheese, meat past its expiration date, and old fish and ham that had been washed in bleach to mask the smell. Food Lion denied the allegations and sued ABC for trespass. A jury ruled against ABC and awarded Food Lion punitive damages in an investigation into ABC journalists lying on their application forms and assuming positions under false pretenses. (here). The Fourth Circuit, however, wiped out the punitive damage award while upholding the trespass and breach-of-loyalty verdicts, with awards of only $1 for each.

There is also a case out of the Seventh Circuit. Judge Richard Posner wrote the decision in Desnick v. ABC, where investigative reporters went undercover in 1993 to show that employees of the Desnick eye clinic had tampered with the clinic’s auto-refractor, the machine used to detect cataracts, so that the machine produced false diagnoses to find cataracts (and require procedures). The court rejected wiretapping claims (based on the state’s one-party consent rules) as well as trespass and defamation claims. On trespass, the court noted that the reporters were allowed into areas open to new patients. Posner relied on the consent to the entry to negate the trespass claim even when the entrant “has intentions that if known to the owner of the property would cause him . . . to revoke his consent.”

In this matter, there was no Desnick-like claim in entering non-public areas and removing material. A valid civil action alleging trespass and other claims could be raised. Moreover, the affected groups could potentially allege a tolling of the statute of limitations given the secrecy of the operations.

Setting aside such civil litigation, this will still be a challenge for the Justice Department. Acting Attorney General Todd Blanche told Fox News that the investigation was begun under the Biden Administration but then suddenly terminated.

The action is likely to draw serious constitutional challenges over free speech and associational rights. The Center can argue that it was clear that they were targeting racist groups by any means necessary.  While they did not discuss such clandestine operations, they will argue that the operations were still used to attack these groups and share information with law enforcement. The Center is also likely to raise selective prosecution claims.

The government has a tough case, with the alleged fraud used to produce evidence submitted to state and federal prosecutors. In addition, if this case extends into a new administration, a Democratic Justice Department could scuttle the case as did the Biden Administration.

Once again, it is remarkable to read the extent to which the Center acted like a mini-FBI in running its own confidential informants and allegedly conducting a “black bag job.”

The unfolding prosecution is likely to shine a light on the tactics used by the Center. It could also further define the constitutional protections for such organizations in using such novel and controversial means.

Here is the indictment: United States v. Southern Poverty Law Center