Alabama AG Probes SPLC Fraud Amid Federal Indictment

Alabama Attorney General Steve Marshall is demanding the Southern Poverty Law Center hand over records of secret informant payments and donor funds. The state probe launched days after a federal grand jury indicted the organization on 11 fraud counts. The investigation represents a dramatic escalation against a group that spent decades labeling conservative Americans as "hate groups" while allegedly funneling more than $3 million to the white supremacists it publicly condemned.

Marshall's subpoena ordered the Montgomery-based organization to produce donor disclosure documents, payment records to informants and budget breakdowns by June 1. The investigation operates under Alabama's Deceptive Trade Practices Act and state charity laws. It seeks to determine whether donor funds collected from Alabama residents were misused.

"My Office has been fighting the SPLC for years," Marshall said May 11. "We have always suspected that they were monetizing hate and trading on race-baiting. It was just a matter of proving it. Thanks to the U.S. Justice Department's action to deal with the SPLC, the State's efforts have now received a shot in the arm."

The federal indictment, returned April 21, charges the SPLC with six counts of wire fraud, four counts of false statements to federally insured banks and one count of conspiracy to commit concealment money laundering. Prosecutors allege the organization secretly transferred more than $3 million between 2014 and 2023 to informants embedded in the KKK, National Alliance, National Socialist Movement and Unite the Right affiliates.

"The SPLC is manufacturing racism to justify its existence," Acting Attorney General Todd Blanche declared at an April 21 press conference. "Using donor money to allegedly profit off Klansmen cannot go unchecked. This Department of Justice will hold the SPLC and every other fraudulent organization operating with the same deceptive playbook accountable."

Financial records show the organization's revenue nearly tripled after the 2017 Charlottesville rally. Income grew from $50 million in 2016 to more than $132 million the following fiscal year. Prosecutors argue the SPLC manufactured racial tensions to sustain its business model and justify its $786 million endowment.

"Donors gave their money believing they were supporting the fight against violent extremism," U.S. Attorney Kevin Davidson said. "As alleged, the SPLC instead diverted a portion of those funds to benefit individuals and groups they claimed to oppose. That kind of deception undermines public trust and social cohesion."

The indictment details the hypocrisy. While publicly condemning white supremacist groups, the SPLC allegedly funneled money to extremists through shell companies like Center Investigative Agency and Fox Photography. Payments included more than $1 million to a National Alliance informant, $270,000 to a Unite the Right organizer and $300,000 to a National Socialist Movement officer.

SPLC Interim President Bryan Fair pleaded not guilty to all charges May 7. He called the allegations "provably wrong" and based on "inaccurate facts and a misapplication of law." Fair defended the informant program as legitimate intelligence gathering that saved lives.

"The charges against the SPLC are provably wrong," Fair stated. "Our informant program was successful in accomplishing its purposes. Threats and attacks were prevented, criminal activity was stopped, and information was gathered to dismantle the efforts of hate and extremist groups."

Conservative groups long targeted by the SPLC's "hate maps" welcomed the investigations. Tony Perkins, president of the Family Research Council, said his organization's building was shot at in 2012 by a gunman partly motivated by SPLC designations. Perkins called for restitution from the organization's $750 million endowment.

"I was shocked that people were shocked," Tina Descovich, CEO of Moms for Liberty, said. "We make up over half of their hate map. We have watched their unethical tactics over the last three years. We have watched them fabricate and manipulate."

The FBI severed ties with the SPLC in October 2025. Director Kash Patel called it a "partisan smear machine" and vowed the bureau would "never rely on politicized or agenda-driven intelligence from outside groups."

Scott Walter, president of the Capital Research Center, compared the SPLC's operations to "a crooked record company bribing DJs to play its songs and prop up revenue." Nothing, he said, "better proves the SPLC does not protect us from dangerous sickos. It just operates a charity racket more rotten than anything I've seen in decades."

Democratic lawmakers condemned the federal prosecution as politically motivated. Senate Minority Leader Charles Schumer called it "a vindictive campaign against the organizations that safeguard our democracy." Senator Adam Schiff accused the Trump administration of "dramatically escalating its attack on civil rights organizations and its defense of white supremacists."

Legal experts remain divided on the case's merits. Former federal prosecutor Andrew Cherkasky called the indictment "legally valid, well-pleaded and built to survive motion practice." He noted that a high-level SPLC employee allegedly coordinated payment for stolen documents. University of Pittsburgh law professor Phil Hackney expressed surprise at the novel approach. "Typically, when a non-profit group is charged with fraud, it is because someone is accused of pilfering donated funds to line their own pockets," he said.

The convergence of federal charges, state subpoenas and severed law enforcement partnerships signals a reckoning for an organization that operated with decades of impunity. As Marshall's investigation unfolds alongside the federal case, the SPLC faces simultaneous institutional, legal and financial challenges that threaten its $786 million endowment and cultural influence.