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Monday, December 09, 2019

Corruption

Rep. George Santos

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Rep. George Santos has been inundated with terrible publicity during his weeks in Congress, with countless reports detailing the many lies the Queens/Long Island Republican told on the campaign trail in the 2022 midterms. On top of lying about his employment and education history, Santos falsely claimed that his mother was inside the World Trade Center during the 9/11 terrorist attacks and that his grandparents were Holocaust survivors. Records obtained by NBC News show that Santos’ mother was in Rio de Janeiro, Brazil on 9/11.

Despite all that, Santos has vowed to serve out his full two-year term in the U.S. House of Representatives. Republican House Speaker Kevin McCarthy is fine with Santos having committee assignments, and Rep. Marjorie Taylor Greene, a far-right MAGA Republican, has unapologetically defended Santos.

But the negative publicity surrounding Santos is not letting up. And that includes a Washington Post report on his alleged role in a Ponzi scheme involving the Florida-based investment firm Harbor City Capital. Santos has denied doing anything unethical on behalf of that company.

In an article published on November 25, Post reporters Jonathan O'Connell, Isaac Stanley-Becker, Emma Brown and Samuel Oakford, explain, “Santos worked as the company’s New York regional director for more than a year before the Securities and Exchange Commission filed suit in April 2021, alleging that the firm defrauded investors of millions of dollars in a ‘classic Ponzi scheme.’ Santos, the 34-year-old freshman Republican congressman from New York who lied brazenly about key aspects of his biography, has said he was unaware of any fraud by Harbor City.”

New York City resident Christian Lopez alleges that Santos, in November 2020, tried to persuade him to invest in the scheme. Two months earlier, according to the Post, Santos had been awarded $2 million in insurance money because of injuries he suffered at the hands of a drunk driver in Queens in 2018.

The 35-year-old Lopez recalled meeting with the embattled congressman at an Italian restaurant in Queens, telling the Post, “I felt like we were in ‘Goodfellas,’ like we were in a mafia movie. They were like, ‘Hello, I see you are here with George, right this way.’ Bringing us to this fancy restaurant and doing all this, I felt like he was doing it to capture us…. He was saying if you give me $300,000, I am going to make you money. I’m going to make you $3 million.”

According to O'Connell, Stanley-Becker, Brown and Oakford, “accounts gathered by the Post” show a “detailed picture of Santos’ efforts to recruit investors for Harbor City.”

“In two instances,” the Post reporters note, “he inflated his own academic or professional credentials, the Post found. In addition, Zoom recordings of workplace meetings show Santos offering anecdotes about his purported interactions with wealthy people — stories disputed by those involved — for potential inclusion in marketing materials or to impress prospective clients.”

The journalists add, “Two of the people he pitched said they did not realize until being contacted by a reporter that the man they’d known as ‘George Devolder’ was the newly elected congressman who, among other things, falsely claimed that his mother was working in the World Trade Center on September 11, 2001. ‘Devolder’ was Santos’ mother’s surname.”

Al Conard, a real estate agent from Minnesota, told the Post that he lost $50,000 to Harbor City and that George Santos and George Devolder are the same person.

“In internal Harbor City meetings,” the Post reporters note, “Santos refined his pitch, breezily offering stories he said he could tell investors to demonstrate his credentials or lighten the mood, according to the Zoom recordings obtained by the Post. Some of the tales were self-deprecating, but they delivered the same message: that he operated in the orbit of the rich and powerful.”

Reprinted with permission from Alternet.

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Rep. George Santos

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The big question—the really big question—about Rep. George Santos’ lies has been where he got the $700,000 he lent his campaign. Because there’s no evidence Santos ever had that much money, and if it came from someone else, that person bought themselves a U.S. congressman, which is illegal. Updated finance reports Santos’ campaign filed on Tuesday added a new twist.

In the new filings, the campaign unchecked a single box that had been checked in previous filings. The box in question was originally marked to say that the loan came from “personal funds of the candidate.” Now it’s not saying that money came from Santos’ own money, in two amended reports about $500,000 and $125,000 loans from Santos. But no more explanation is forthcoming.

“I have never been this confused looking at an F.E.C. filing,” Jordan Libowitz, a spokesman for Citizens for Responsibility and Ethics in Washington and therefore someone who probably looks at a lot of FEC filings, told The New York Times.

“If the candidate’s personal wealth wasn’t the source of the loan, then what was?” one campaign lawyer quoted in the Times asked. “The only other permissible source would be a bank, and they would require collateral for a loan of this size. If a bank wasn’t the source of the funds, then the only alternatives are illegal sources.”

Santos had claimed that he got the money through his company, the Devolder Organization. But the Devolder Organization has no record of clients that would be paying it enough money to funnel hundreds of thousands of dollars to Santos, who made $55,000 a year at his previous job. Even if the Devolder Organization legitimately made that money, with Santos as its owner, taking the money out of the company to go to his campaign could be illegal.

It seems unlikely that “I got the money from my personal company that within the space of a couple years made millions of dollars with no major clients I can disclose” is a true answer, though. One possible answer is that, as the Times reported earlier in the month, large amounts of money were raised for Santos through RedStone Strategies, described in some documents as an “independent expenditure” group but never registered with the FEC. Some of the contributions to RedStone Strategies came shortly before Santos’ $125,00 loan to his campaign. Because there’s no documentation, we can’t say anything for sure about that, but it’s … interesting.

Everything about this guy is sketchy, but the hundreds of thousands of dollars he funneled to his campaign on the claim that it was his own money is one of the things most likely to be criminal. That, and the actual criminal fraud charges in Brazil. And the allegation that he fraudulently raised money for lifesaving surgery for a disabled veteran’s service dog and then refused to pay for the dog’s surgery while claiming that the money would go to other dogs.

So the highly questionable campaign finance arrangements aren’t the only crimes Santos may have committed—but they’d be by far the largest in dollar value and impact in the world. (A dog dying needlessly is awful, but not an enormous story in comparison with a criminal criming his way into Congress.)

As a result of the new disclosures and the general cloud of suspicion surrounding Santos, this is how his days are going:

But note there are still no answers. Voters in his district—and the FEC and Santos’ colleagues in the House—really need to know where that money came from. Republican leaders have stood by Santos so far because they care more about his vote than about what rules or laws he may have broken on the way to Congress. Is there anything that could possibly shift Kevin McCarthy’s risk-benefit analysis on Santos? It seems like we’re going to get a very strong test of that question.

Reprinted with permission from Daily Kos.