Ted Cruz presses SPONSOR Act proposal aimed at nonprofits backed by tax-exempt sponsors as DOJ investigation targets Singham network

Sen. Ted Cruz said a bill he introduced would remove or limit tax-exempt status for entities that sponsor or funnel money to nonprofits tied to political violence, as a Justice Department probe into Neville Roy Singham’s alleged funding network proceeds.

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Sen. Ted Cruz, R-Texas, on July 3 renewed his push for legislation he says would increase accountability for individuals and organizations that use tax-exempt status to finance nonprofits connected to political violence, as the Justice Department pursues a grand jury investigation into Neville Roy Singham’s alleged funding network.

Cruz’s proposal, the Stop Proxy Organizations Nurturing Subversive Operations and Riots Act, or SPONSOR Act, would target what he describes as “proxy” funding channels, including tax-exempt sponsors, that direct money to nonprofit groups engaged in political violence. Cruz has said the measure is designed to ensure that entities receiving tax benefits do not use those benefits to support activity that undermines public safety.

According to Fox News, the Justice Department investigation centers on alleged financial ties among nonprofits funded by Singham. Fox reported that Acting Attorney General Todd Blanche authorized a probe by the U.S. Attorney’s Office for the Southern District of New York led by Jay Clayton, and that prosecutors are working through a grand jury process to examine the structure and flow of funds.

The Fox report also quotes Cruz describing the DOJ probe as warranted and ties his legislative push to the broader question of how tax-exempt entities are used. Cruz said the investigation concerns Singham’s funding network that, in Cruz’s view, has been involved in bankrolling left-wing political violence and foreign-aligned interests, framing the tax system as a potential enforcement and accountability mechanism.

At the same time, the SPONSOR Act proposal has not been the subject of detailed floor or committee-action coverage in the material provided to this desk, and specific bill text, sponsorship co-signers, and the precise enforcement mechanism described in that text are not included in the current record. As a result, this report focuses on Cruz’s stated goals for the legislation and the broad contours of the DOJ probe as described by Fox.

A separate question raised by the issue is how the bill would interact with nonprofit due process protections and the statutory standards governing tax-exempt status. Any effort to strip or restrict tax exemptions generally depends on findings about qualification under Internal Revenue Code requirements and could involve administrative or judicial review depending on how the bill is structured.

The House and Senate process for SPONSOR Act implementation, including committee consideration and any vote, was not detailed in the available material, and the Justice Department’s investigation status, scope, and next procedural steps beyond the grand jury framing were not confirmed in official DOJ documentation within the provided evidence.

Why It Matters

The dispute centers on enforcement of tax benefits, with potential implications for the standards and oversight applied to tax-exempt sponsors and nonprofit funding chains.
The legislative timeline depends on committee consideration and any votes, while the DOJ timeline depends on grand jury proceedings and subsequent prosecutorial decisions.
If enacted, the bill’s approach could affect nonprofit organizations’ compliance requirements and raise constitutional due process questions about how tax-exempt status is modified or removed.
The issue also tests how federal authorities coordinate criminal investigations with regulatory and tax administration tools when allegations involve political violence and funding networks.

Sources

Key Facts

Sen. Ted Cruz introduced the Stop Proxy Organizations Nurturing Subversive Operations and Riots Act, or SPONSOR Act, which he says would strip or limit tax-exempt status for sponsors tied to nonprofits that engage in political violence.
Cruz said his bill is aimed at individuals and organizations that funnel funds to nonprofit groups through tax-exempt arrangements.
Fox News reported that the Justice Department is pursuing a grand jury investigation into Neville Roy Singham’s alleged funding network.
Fox News reported that Acting Attorney General Todd Blanche authorized an investigation by the Southern District of New York through U.S. Attorney Jay Clayton.
The current record does not include official Justice Department confirmation, bill text, or committee and vote status for SPONSOR Act.