Trump’s Shell Spending Scheme Comes Under DOJ Scrutiny

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Former President Donald Trump’s Save America PAC raised tens of millions of dollars on false claims of election fraud, and now the feds want to know how it was spent.

On Sunday, The New York Times reported that special counsel Jack Smith’s team has subpoenaed a “vast array” of Trump vendors, “posing questions related to how money was paid to other vendors, indicating that they are interested in whether some entities were used to mask who was being paid or if the payments were for genuine services rendered.”

While the details of Smith’s inquiry are unknown, we do have something of a road map. The report from the Jan. 6 House Select Committee, along with publicly available Federal Election Commission and IRS filings, can shine a light on some of those vendors, offering some insight into what may have caught the DOJ’s eye.

First, it’s a fact that Trump has literally masked his vendors. Prior to the election, the Trump 2020 campaign had already routed more than three-quarters of a billion dollars in expenses to unknown subvendors through an in-house company, called American Made Media Consultants. That arrangement was targeted in a FEC complaint from watchdog group Campaign Legal Center, which alleged that the campaign used the scheme to effectively launder money and conceal from the public the true recipients of donor funds.

Why Trump Is Ramming Piles of Cash Through a Campaign Loophole

The FEC’s commissioners, however, deadlocked along party lines and dismissed the complaint. CLC sued the FEC over the ruling in July, claiming the ruling was arbitrary and contrary to law. Now, Smith appears to be taking up the same issue.

Adav Noti, CLC’s senior vice president and legal director, told The Daily Beast that following the FEC’s inaction, his group welcomed DOJ scrutiny.

“The Trump political organizations illegally concealed hundreds of millions of dollars in spending, and the dysfunctional Federal Election Commission could not even manage to do its job and open an investigation,” Noti said. “An investigation by the Special Counsel into where that money went will ultimately shed light on one of the biggest campaign finance violations in history.”

It’s unclear whether Smith’s jurisdiction extends to other Trump committees beyond Save America. However, a large chunk of the AMMC payments came after the election, and the campaign itself participated in the same fundraising as Save America—in some instances, that group appears to have continued the shell payment pattern after Trump left office.

Trump officials created the Save America PAC in the weeks after losing the 2020 election. They set the group up as a leadership PAC, which would still allow Trump to access the funds after leaving office, and immediately began filling its accounts with donations raised on false claims of a stolen election.

The Jan. 6 committee investigated that fundraising effort as possible wire fraud, an inquiry the DOJ appears to have taken on last summer, according to news reports. When the House committee released its final report in December, they relegated the fundraising investigation to an appendix, which The Daily Beast previously reported was not for lack of smoke.

In fact, the report’s “Follow the Money” appendix points out some murky vendor relationships. A number of former Trump officials appear to have been on the Save America payroll, taking money through shell LLCs. Smith’s investigation, according to reports, appears concerned with whether those payments were legitimate.

For instance, the report noted that from July 2021 to the present, Save America appears to have paid longtime Trump adviser and former White House Deputy Chief of Staff Dan Scavino in two ways simultaneously—personally and through an LLC.

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Scavino, FEC records show, makes about $9,700 a month on the Save America payroll. At the same time, Save America was also making monthly payments of $20,000 to an entity called Hudson Digital LLC, which FEC filings peg to Scavino’s address.

According to the Jan. 6 report, Hudson Digital LLC was registered under a corporate agent in Delaware on Jan. 26, 2021, six days after Trump left office. And Hudson Digital got its first payment—$46,451—the day it was registered. (The campaign’s last payment to AMMC came on Dec. 14, 2020.) In all, Hudson Digital LLC has taken in more than $420,000 from Save America, all supposedly for work described as “digital consulting.”

The report noted that Hudson Digital LLC does not appear to have a website, and no other information or mention of it can be found online. According to FEC records, no other political committee has ever paid the company.

Trump’s “body man,” Nick Luna, also joined the Save America payroll. The Jan. 6 report noted that after Trump left office, a company tied to Luna, called Red State Partners, began receiving $20,000 monthly payments, mostly from Trump’s former campaign committee, with one $20,000 payment coming from Save America. No other political committee has ever paid Red State Partners, according to FEC data.

The report found that multiple former Trump staffers—including one of his Jan. 6 speechwriters, Ross Worthington—appear as officers on a company called Pericles LLC, which was formed on Jan. 27, 2021, the day after Scavino’s company popped up. Pericles has received payments from Save America totaling at least $352,700, mostly for “consulting” and travel costs, the report found. FEC records show no other committee paying Pericles LLC, except for decade-old expenses to a separate entity with that name in Alabama.

Another Jan. 6 speechwriter, Robert Gabriel, Jr., has also received Save America funds through an LLC. According to the Jan. 6 report, Gabriel “specifically told the speechwriters, including Worthington, to reinsert previously removed incendiary lines about Vice President Pence into the speech. This direction came after Vice President Pence told President Trump that he would not try to change the outcome of the election.”

Gabriel created Gabriel Strategies LLC in September 2021, the report said, and the Save America funds started flowing the following month, totaling more than $167,000 in “consulting” and travel expenses.

Trump Campaign Routed Money for Jan. 6 Rally Through Shell Companies

Robert Maguire, who researches political spending at watchdog Citizens for Responsibility and Ethics in Washington, told The Daily Beast that the payments raise questions about whether these were legitimate services, or simply hush money to people who may know too much.

“There are certainly instances where something like that might be entirely reasonable, where you have a firm that provides a legit service, but you’re also an employee of the PAC. Where it starts to become questionable is where it’s just an LLC that is essentially another pool of cash for you to receive from the political committee,” Maguire said.

“Looking at this pattern, you have to wonder whether it’s part of an effort to keep people quiet about what they saw in the Trump administration,” he said. “If they only paid them directly, you’d see a list of all these people who left the administration suddenly getting these massive monthly paychecks, some of them more than others. But by paying them through these companies, it gives the outward impression that these companies must be doing something.”

Maguire pointed out that Scavino, Trump’s social media manager, could very well have chosen to parlay his years of political communications experience into a handsome political consulting business.

“D.C. is full of people who leverage their past campaign work to start consulting firms that do business with a number of campaigns and candidates, but again, that’s not what we see here,” Maguire said.

(During the Trump administration, a number of former staff began receiving $15,000 monthly payments—the equivalent of a top White House salary—from the Republican National Committee after departing from their government posts.)

Like Noti, Maguire said the scheme highlights “a huge hole” that makes the FEC’s reporting requirements “a ripe target.”

“There’s essentially no public accountability. Are they providing a service, or is it a slush fund to receive kickbacks or hush money? It’s a ripe target for misuse,” he said.

Other Save America payments raise transparency questions, as well.

Since leaving office, Save America and Trump’s old campaign committee—now called Make America Great Again PAC—have reported more than $29.1 million in legal costs, per FEC records.

According to the Jan. 6 report, as of June 2022, more than 67 percent of Save America’s legal expenses went to law firms representing witnesses subpoenaed or invited to testify in the congressional investigation. The PAC is now footing legal costs for key witnesses in the DOJ investigation into Trump’s handling of classified information, which contains an obstruction of justice element.

Jan. 6 Report Says Trump’s ‘Big Lie’ Was ‘Big Rip-Off’

Last July, The Daily Beast reported a $1 million transfer from Trump’s MAGA PAC to Elections LLC, the law firm belonging to former Trump White House lawyer Stefan Passantino. Passantino has represented a number of witnesses in the congressional investigation. In December, he stepped away from his other firm after the Jan. 6 committee accused him of coaching key witness Cassidy Hutchinson to give misleading testimony.

Save America’s enigmatic expenditures include two other flat $1 million donations. One, in June 2021, went to the America First Policy Institute, a think tank that employs several former Trump White House officials, as well as witnesses subpoenaed in the congressional investigation. The other went to the Conservative Partnership Institute, a nonprofit organization where Trump’s former chief of staff Mark Meadows landed a gig as senior partner after leaving the White House. CNN reported Wednesday night that Smith recently subpoenaed Meadows, too.

Both donations to AFPI and CPI have been said to have then traveled through nonprofit go-betweens, ultimately funding election audit efforts in Arizona and possibly Georgia.

Finally, between March and May of 2021, Trump’s old 2020 campaign, MAGA PAC, clocked nearly $1 million in payments to a document processing company called 2M Management. While the money came out of the PAC’s “recount" account, the Jan. 6 committee found that 2M Management was in reality “primarily processing and reviewing documents slated to be produced by the National Archives and Records Administration” in response to congressional subpoenas from two groups—the House Select Subcommittee on the Coronavirus Crisis, and the Jan. 6 committee itself.

Read more at The Daily Beast.

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