Kristi Noem secretly took a cut of political donations

In 2023, while Kristi Noem was governor of South Dakota, she supplemented her income by secretly accepting a cut of the money she raised for a nonprofit that promotes her political career, tax records show.

In what experts described as a highly unusual arrangement, the nonprofit routed funds to a personal company of Noem’s that had recently been established in Delaware. The payment totaled $80,000 that year, a significant boost to her roughly $130,000 government salary. Since the nonprofit is a so-called dark money group — one that’s not required to disclose the names of its donors — the original source of the money remains unknown.

Noem then failed to disclose the $80,000 payment to the public. After President Donald Trump selected Noem to be his secretary of the Department of Homeland Security, she had to release a detailed accounting of her assets and sources of income from 2023 on. She did not include the income from the dark money group on her disclosure form, which experts called a likely violation of federal ethics requirements.

Experts told ProPublica it was troubling that Noem was personally taking money that came from political donors. In a filing, the group, a nonprofit called American Resolve Policy Fund, described the $80,000 as a payment for fundraising. The organization said Noem had brought in hundreds of thousands of dollars.

There is nothing remarkable about a politician raising money for nonprofits and other groups that promote their campaigns or agendas. What’s unusual, experts said, is for a politician to keep some of the money for themselves.

“If donors to these nonprofits are not just holding the keys to an elected official’s political future but also literally providing them with their income, that’s new and disturbing,” said Daniel Weiner, a former Federal Election Commission attorney who now leads the Brennan Center’s work on campaign finance.

ProPublica discovered details of the payment in the annual tax form of American Resolve Policy Fund, which is part of a network of political groups that promote Noem and her agenda. The nonprofit describes its mission as “fighting to preserve America for the next generation.” There’s little evidence in the public domain that the group has done much. In its first year, its main expenditures were paying Noem and covering the cost of some unspecified travel. It also maintains social media accounts devoted to promoting Noem. It has 100 followers on X.

In a statement, Noem’s lawyer, Trevor Stanley, said, “Then-Governor Noem fully complied with the letter and the spirit of the law” and that the Office of Government Ethics, which processes disclosure forms for federal officials, “analyzed and cleared her financial information in regards to this entity.” Stanley did not respond to follow-up questions about whether the ethics office was aware of the $80,000 payment.

Stanley also said that “Secretary Noem fully disclosed all of her income on public documents that are readily available.” Asked for evidence of that, given that Noem didn’t report the $80,000 payment on her federal financial disclosure form, Stanley did not respond.

Before being named Homeland Security secretary, overseeing immigration enforcement, Noem spent two decades in South Dakota’s government and the U.S. House of Representatives, drawing a public servant’s salary. Her husband, Bryon Noem, runs a small insurance brokerage with two offices in the state. Between his company and his real estate holdings, he has at least $2 million in assets, according to Noem’s filing.

While she is among the least wealthy members of Trump’s Cabinet, her personal spending habits have attracted notice. Noem was photographed wearing a gold Rolex Cosmograph Daytona watch that costs nearly $50,000 as she toured the Salvadoran prison where her agency is sending immigrants. In April, after her purse was stolen at a Washington, D.C., restaurant, it emerged she was carrying $3,000 in cash, which an official said was for “dinner, activities, and Easter gifts.” She was criticized for using taxpayer money as governor to pay for expenses related to trips to Paris, to Canada for bear hunting and to Houston to have dental work done. At the time, Noem denied misusing public funds.

Noem’s personal company, an LLC called Ashwood Strategies, shares a name with one of her horses. It was registered in Delaware early in her second term as South Dakota governor, around 1 p.m. on June 22, 2023. Four minutes later, the nonprofit American Resolve Policy Fund was incorporated in Delaware too.

American Resolve raised $1.1 million in 2023, according to its tax filing. The group reported that it had zero employees, and what it did with that money is largely unclear.

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In 2023, the nonprofit spent only about $220,000 of its war chest — with more than a third of that going to Noem’s LLC. The rest mostly went toward administrative expenses and a roughly $84,000 travel budget. It’s not clear whose travel the group paid for.

The nonprofit reported that it sent the $80,000 fundraising fee to Noem’s LLC as payment for bringing in $800,000, a 10% cut. A professional fundraiser who also raised money for the group was paid a lower rate of 7%.

In the intervening years, American Resolve has maintained a low public profile. In March, it purchased Facebook ads attacking a local news outlet in South Dakota, which had been reporting on Noem’s use of government credit cards. Noem’s lawyer did not answer questions about whether the group paid her more money after 2023, the most recent year for which its tax filing is available.

The nonprofit has an affiliated political committee, American Resolve PAC, that’s been more active, at least in public. Touting Noem’s conservative leadership under a picture of her staring off into the sky, its website said the PAC was created to put “Kristi and her team on the ground in key races across America.” Noem traveled the country last year attending events the PAC sponsored in support of Republican candidates.

American Resolve’s treasurer referred questions to Noem’s lawyer. In his statement, Noem’s lawyer said she “did not establish, finance, maintain, or control American Resolve Fund. She was simply a vender for a non-profit entity.”

While Noem failed to report the fundraising income Ashwood Strategies received on her federal financial disclosure, she did provide some other details. She described the LLC as involving “personal activities outside my official gubernatorial capacity” and noted that it received the $140,000 advance for her book “No Going Back.” The LLC also had a bank account with between $100,001 and $250,000 in it and at least $50,000 of “livestock and equipment,” she reported.

The fact that Ashwood Strategies is Noem’s company only emerged through the confirmation process for her Trump Cabinet post. South Dakota has minimal disclosure rules for elected officials, and Noem had not previously divulged that she created a side business while she was governor.

Noem’s outside income may have run afoul of South Dakota law, according to Lee Schoenbeck, a veteran Republican politician and attorney who was until recently the head of the state Senate. The law requires top officials, including the governor, to devote their full time to their official roles.

“There’s no way the governor is supposed to have a private side business that the public doesn’t know about,” Schoenbeck told ProPublica. “It would clearly not be appropriate.”

Noem’s lawyer said South Dakota law allowed her to receive income from the nonprofit.