Minnesota’s nonprofit scandal isn’t an outlier but a warning: unaccountable institutions drift from those they claim to serve while taxpayers and members pay the price.
The Minnesota nonprofit fraud scandal, now expected to cost taxpayers more than $9 billion, is being dismissed by many as an isolated failure. However, this is far from the case, and writing it off as such would be a colossal mistake.
What it actually revealed is a broader problem in the Swamp — that institutions claiming to represent others often operate with little accountability and then quietly drift away from the very people who are footing the bill.
In Minnesota, nonprofit organizations became the perfect vehicle for abuse — shielded from scrutiny, politically protected, and flush with public money. However, in Washington, trade associations operate in largely the same way. They collect millions in dues from American businesses while increasingly choosing to serve their own leadership’s personal and political interests instead of those of their dues-paying members.
Their members only care about being able to deliver good-paying jobs to their employees and securing a more favorable regulatory climate so they can deliver lower-priced goods for the American people; however, you’d never know that if you looked at the public policy priorities of their association leadership officials, who seem more interested in fitting in at woke radical leftist cocktail parties.
Jay Timmons, president and CEO of the National Association of Manufacturers, has repeatedly broken with Republicans by sharply criticizing Donald Trump, including after January 6, when he called Trump’s actions “mob rule,” urged Vice President Mike Pence to invoke the 25th Amendment, and faulted the administration’s handling of COVID-19. Despite that record, Timmons later congratulated Trump on his November 2024 victory and suggested they should “work together like we did before.” At the same time, Timmons praised and partnered with Joe Biden, backing the administration’s COVID-19 vaccine campaign and publicly supporting the Bipartisan Infrastructure Law and the CHIPS and Science Act. In 2022, he also donated to Adam Kinzinger’s leadership PAC just days after Kinzinger was censured by the Republican Party.
If a presidency was truly so dangerous five years ago that it was deemed incompatible with democracy itself, it is fair to ask how the same association leadership can now claim alignment and cooperation without any explanation, accountability, or evident change in approach. That kind of abrupt pivot invites skepticism from dues-paying manufacturers who expect their trade groups to be guided by member interests, not political positioning or reputational hedging.
The problem is compounded by a reliance on press releases in place of real relationships. Press releases don’t move policy — relationships do. Manufacturers don’t pay dues for moral posturing, elite signaling, or ceremonial access; they pay for results. When leadership spends years attacking an administration only to reverse course once the election is settled — substituting optics for engagement — it raises a fundamental question about who the organization is really serving.
Then there’s the Investment Company Institute, which represents asset managers navigating an intensely regulated environment. Its CEO, Eric Pan, earns roughly $3 million a year while publicly aligning himself with progressive causes and donating to Democratic candidates — even those running against Republican senators who oversee key committees affecting pensions and financial markets.
Under Pan’s control, the ICI went head over heels for Biden’s climate change agenda, endorsing a proposed rule by the Securities and Exchange Commission (SEC) that would push to mandate climate-impact disclosures. Critics warned the proposals blurred the line between securities regulation and social policymaking, forcing companies to engage in politically charged “compelled speech” untethered from core financial risk. They cautioned that the rules would impose significant compliance costs, expose firms to heightened litigation risk, and overwhelm investors with data of dubious relevance. This makes sense from the standpoint that Pan brags about teaching his students at Columbia Law a “rich, progressive curriculum.” This kind of political posturing is putting the organization’s member companies at odds with the very policymakers who shape their regulatory futures.
Even the U.S. Chamber of Commerce, long seen as the flagship advocate for free enterprise, lost credibility with many small businesses during the Biden years. While its executives collected multi-million-dollar compensation packages, the Chamber backed COVID mandates, massive spending bills, and climate policies that drove up costs for employers and workers alike.
When small businesses were struggling to stay afloat, the Chamber’s Washington insiders were doing just fine. The CEO, Suzanne Clark, earned $6.6 million, and the Chief Policy Officer, Neil Bradley, earned nearly $2 million.
For small businesses writing checks every year, what are those association dues actually buying? Better free-market conservative policies? Measurable regulatory relief? Or just access, prestige, and fat salaries for executives whose priorities no longer align with the firms they represent?
Trade associations should exist to fight relentlessly for free enterprise — predictable rules, property rights, competition, and growth. When they become tollbooths to Washington rather than shields against it, they fail in their mission.
The Minnesota NGO scandal should serve as a textbook warning of how institutions that operate without accountability eventually stop serving their stated purpose. Businesses, especially small businesses, should demand better.
Any group, whether in Minnesota or in DC, that claims to represent the American people should be able to answer three basic questions: Right now, too many are not able to answer these basic questions.
Former US President Ronald Reagan once said:
“We must be willing to pay for excellence in government or risk a government run only by people of wealth or by those beholden to special interests.” If we don’t demand the same for the groups that represent us at the government negotiating table, then those same negative consequences will arise.
And that’s in no one’s interest. It’s time we demand better.
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