Treasury Secretary Scott Bessent is pointedly warning leftist nonprofits engaged in fraud, violence, improper politics, foreign collusion or terrorism that they could face penalties far more severe than just losing their tax-exempt status, including criminal prosecutions of their officers and trustees and the forfeiture of their financial assets.

"Nonprofit status is a privilege," Bessent said Friday night in a wide-ranging interview on the Just the News, No Noise television show. "It is a privilege, the right to be exempt from paying taxes, being able to take donations that are tax-deductible, and have private citizens apply that against their taxes.

"We believe that there are many organizations who are violating this privilege," he added.

Bessent's warning of a crackdown on nonprofits comes after President Donald Trump signed an executive order last fall asking federal agencies to better police tax-exempt organizations, which have exploded in size and mission far beyond traditional charities.

The FBI and IRS recently created a first-ever task force to police wrongdoing in the industry, which now accounts for more than 10 percent of U.S. economic activity. And the Justice Department charged the longtime liberal civil rights group, the Southern Poverty Law Center, with fraudulently collecting donations claiming to fight extremism and hate while paying the hate groups.

Meanwhile, evidence of other leftist nonprofits engaging with U.S. adversaries like China and Cuba, defrauding government welfare programs, obstructing law enforcement agencies like ICE, and fomenting violence, antisemitism or unrest has exploded onto the public radar.

Vice President J.D. Vance has been named to oversee a project on federal fraud that is heavily focused on bad behavior by nonprofits and the House recently named Rep. Brandon Gill, R-Texas, to oversee a tax force to probe illegal conduct and abuses by nonprofits.

Gill told Just the News this week one area of focus for Congress is nonprofits that collect billions in federal grants and then use the money for political activity or civil agitation.

"If you're a non-governmental organization and your primary source of funds is the government, I think that that should raise some pretty serious red flags, but we're looking at any institution that is abusing our laws, in this case our tax laws, in order to facilitate whether it's left-wing agitation or to undermine the social fabric of the United States," he explained.

Bessent said his department has its own investigation focused on "whether some of these organizations are taking advantage of the system, whether they should have their status revoked, and whether the directors and trustees should be held accountable."

He promised that penalties for violators will go beyond revoking a group's tax-exempt status to seizing assets and punishing the trustees who approved grants that went to nefarious causes.

"We are going to hold these nonprofit trustees and directors accountable," Bessent said. "They need to know their grantees, and if you are giving money, you can't just give the money away and then wipe your hands of it. That there's something called these fiscal authorities, and they pretend that they're not linked. We are going to investigate those, and it is going to go right up to the directors, and they can be held criminally liable."

The Treasury secretary painted a broad picture of the types of groups he is investigating, from donor-advised funds to nonprofits engaged with foreign enemies and terrorists. Nineteen such nonprofits engaged in alleged foreign terrorism were recently punished by Treasury in a historic action.

"If you are designated as an FTO, a foreign terrorist organization, that would result in automatic loss of nonprofit status, and again freezing of forfeiture of the assets," he noted. "And we want to track the individuals, because it seems like there are a lot of concentric circles here, that we seem to see the same names again and the same donors. So we are trying to track that quite a bit."

He said his department will always protect the free speech rights of groups, even those it disagrees with, but noted a growing number of groups on the left have escalated beyond protests to violence and anarchy,

"We support free speech, and that's obviously a right that everyone believes in. But when you step over that line, when you are condoning violence, when you are condoning illegal activities, that's when you are taking away other people's rights," he said. "And that's how we are thinking about it. We are getting lots of inbound in terms of both complaints and prospective investigations into these organizations, and many of them have operated with impunity.

"So, again, we want to respect free speech, but we also don't want to have the government supporting organizations that suppress free speech," he added.

Bessent also confirmed that another area of the crackdown is nonprofits that collect tax-free donations as a 501(c)3 group and then transfer the monies to political groups like 501(C)4s that can engage in election activities.

"I have had the IRS leadership prepare for me a list of the large 501(c)3s that also have (c)4s attached, and we are reviewing how the money moves back and forth between those entities, and whether they have... have gone over the line," he said.