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RNC Gave Big Contracts To Chair McDaniel’s Husband, Cronies

Reprinted with permission from ProPublica.

The Republican National Committee has paid hundreds of thousands of dollars to contractors closely connected to the organization’s chairwoman, Ronna McDaniel.

One contract went to her husband’s insurance company. Two others went to businesses whose executives recently donated to Ronna for Chair, a largely inactive political action committee that McDaniel controls. She had set it up in 2015, when she successfully ran for chair of the Republican Party in Michigan, her home state.

The companies won the contracts soon after McDaniel became the party’s top official. She was picked for the position by President Donald Trump after the 2016 election.

The RNC vendor payments and PAC contributions, detailed in federal tax filings and campaign finance reports, mirror a trend of transactions with favored contractors and employees previously reported by ProPublica.

The RNC conflict-of-interest policy states that employees “should avoid even the appearance of impropriety,” such as steering work to “members of an employee’s family” and businesses “with which the employee has a financial relationship.”

An RNC spokesman, Mike Reed, did not make McDaniel available for an interview. In a statement, he said ProPublica’s reporting was an attempt to make “innocuous RNC spending items seem scandalous,” and he accused ProPublica of harboring “a severe bias against conservatives and President Trump.”

Under McDaniel, the RNC is generating and disbursing record amounts, bringing in about $240 million last year and spending just over $190 million. And public scrutiny of its spending is increasing. ProPublica reported last month that in 2019 the RNC obscured payments to its chief of staff, who executes vendor contracts and is part of a tight network of operatives who have reaped financial rewards during the Trump era. This week, The New York Times reported that since 2017 the tiny circle, including a husband-and-wife duo of former RNC chiefs of staff and Trump’s campaign chairman, Brad Parscale, have billed the campaign, the RNC, and other Republican groups some $75 million.

During McDaniel’s first year as chairwoman, the RNC hired a large, privately held insurance brokerage firm called Hylant to conduct an insurance review and liability assessment. Reports filed with the Federal Election Commission show that the RNC specifically paid Hylant’s Detroit branch almost $40,000 for the company’s services.

The president of that particular office is Patrick McDaniel, the husband of the RNC’s chairwoman.

Reed, the party spokesman, told ProPublica that the Hylant contract “did not violate any RNC policy,” despite the organization’s written guidance about awarding business to members of an employee’s family. Reed said the RNC’s then-treasurer “solicited and signed off on” Hylant’s services. He did not not address who recommended Hylant or why the work was done out of the company’s Detroit office. Reed added that McDaniel’s husband “does not own this company and he received no financial benefit from this work.” Neither Hylant nor Patrick McDaniel returned messages seeking comment.

The two companies whose executives made contributions to McDaniel’s PAC had not received work from the RNC before she became chair.

Less than a week after McDaniel took over the party in January 2017, the RNC made its first monthly payment to the Templar Baker Group, a small political consulting outfit in Michigan headed by Robert Schostak, who chaired the Michigan Republican Party before McDaniel. Since she has been at the RNC, campaign finance reports show, Templar has been paid more than $550,000 for “political strategy services.”

Schostak is also a partner in MadDog Technology, a firm that is chaired by Peter Karmanos Jr., who helped found Compuware, once Michigan’s leading computer technology company. Last year, according to FEC filings, the RNC paid MadDog $50,000 for “website services.”

During McDaniel’s first month as RNC chair, Karmanos and a political spending entity used by the Schostak family contributed $10,000 each to McDaniel’s PAC, federal tax filings show.

Reed, the RNC spokesman, did not describe what services Templar and MadDog provided the organization, but he said they were “invaluable.” When asked about McDaniel’s relationship to Schostak and Karmanos, and the timing of their PAC contributions, he said that ProPublica was “trying to connect dots to come up with something scandalous.” Moreover, he added, McDaniel “has no financial relationship” with MadDog and Templar.

Reed also disputed that the vendors had not worked with the RNC before McDaniel became chair, an assertion that is contradicted by FEC reports. When asked to explain the discrepancy, he referred to Kim Jorns, who, he said, “has worked with the RNC prior to the Chairwoman’s tenure.”

Jorns is an employee at Templar and previously was an RNC staffer, serving as regional political director in the 2016 election cycle. She didn’t return a message seeking comment.

Karmanos and Schostak did not respond to requests for comment.

Last year, Ronna for Chair received no contributions, but it continued to spend money, a practice that is legal and common among elected officials.

McDaniel was reelected as chair of the RNC in January 2019, with Trump’s endorsement. Two days earlier, her PAC paid $5,000 to Kathleen Berden, a voting member of the RNC, a volunteer position. Reed said the PAC paid Berden because she “whipped votes” for McDaniel’s reelection. He would not address why McDaniel needed Berden’s services or whether it was appropriate for McDaniel to pay a volunteer RNC voting member to influence fellow voters.

When reached for comment, Berden declined to elaborate on her work for McDaniel.

RNC Obscures Massive Payments To Chief Of Staff

Reprinted with permission from ProPublica.

Richard Walters began his career at the lowest rungs of the Republican National Committee when he was 23. Now, at 30, he’s the RNC chief of staff, earning far more than any other official there, including his boss, the chairwoman, and the top officials at the Democratic National Committee.

The rich compensation might have raised eyebrows — but for the fact that the RNC obscured it. Last year, Walters earned a salary of $207,558, but the party paid him an additional $135,000 through a shell company he established in December 2018 called Red Wave Strategies.

Federal Election Commission reports described the RNC’s payments to Red Wave as “political strategy services,” as if the money had flowed to an independent contractor and not Walters himself. Red Wave does not have other employees and has no clients other than the RNC.

President Donald Trump and the Republican Party are raising unprecedented sums of cash for the 2020 election. The party brought in more than $241 million alone in 2019, far exceeding the $107 million the RNC raised in 2003, the last time there was a Republican president seeking reelection, and eclipsing the $92 million raised last year by the Democratic National Committee. The RNC spent record-breaking sums, too: In 2019, the party doled out $192 million.

Amid the flows of cash, a select group of political operatives has leveraged Trump campaign ties for lucrative consulting work. In October, The Washington Post highlighted the political consulting prowess of Katie Walsh, for whom Walters once worked at the RNC, and her husband, Mike Shields. Both Walsh and Shields previously served as RNC chiefs of staff. Three businesses controlled by Walsh and Shields have been paid more than $12 million from the RNC, multiple Republican groups and political committees since 2017, according to the Post’s analysis of campaign filings and other records.

Michael Steele, a former RNC chairman, said Walters’ payment structure “just smells” and was in keeping with a culture of “sweetheart deals” among party insiders that he described as corrosive.

A half-dozen former RNC employees and Republican operatives, who spoke to ProPublica on the condition of anonymity to avoid retribution, said that the various deals, typically veiled behind opaque limited liability corporations, create an unseemly overall impression that is bad for morale and could eventually harm the party’s credibility with donors.

“These guys, they just don’t know what impact this has on rank-and-file folks out there,” Steele said. “It’s disrespecting people who donate to the party.”

Mike Reed, an RNC spokesperson, told ProPublica over email that Walsh and Shields “bring incredible value to the RNC and the party as a whole.”

Reed also provided comments concerning Walters from chairwoman Ronna McDaniel and the RNC’s budget committee chair, Glenn McCall. McDaniel said that Walters’ “record as chief of staff speaks for itself,” and McCall said Walters’ “compensation package was approved by myself, the chairwoman, treasurer, and budget committee” because of his “outstanding work.” Given Walters’ success on the job, and the size of the RNC’s operation, which consists of thousands of employees and volunteers, McCall said Walters is “probably underpaid for his position.”

Reed did not address why the RNC pays Walters through Red Wave.

ProPublica described the payments to Walters’ LLC to Larry Noble, a former FEC general counsel, a nonpartisan position. Noble said that if the Red Wave income was really part of Walters’ compensation, it should’ve been attributed to his name and disclosed as “payroll,” a designation that covers the salaries of RNC staffers. The arrangement, he said, amounts to “a serious reporting violation. It seems pretty blatant. Hiding the recipient undermines the purpose of disclosure. The question is, why are they enriching him in this particular way?”

Reed disputed that the organization’s payments to Red Wave amount to a reporting violation, and he said that the organization discloses “everything to the FEC in accordance with the law.”

The RNC has also covered costs or made payments that are personally beneficial to the president, including nearly $2 million for the use of Trump properties, as well as more than $100,000 in purchases of Donald Trump Jr.’s 2019 book, Triggered: How the Left Thrives on Hate and Wants to Silence Us.

Reed said the party’s payments were appropriate. He told ProPublica that Trump properties can be “cheaper to rent than other venues,” and that the FEC “demands the RNC receive market rates.” He added that Trump Jr.’s books were used for fundraising, and that the amount raised off copies exceeded the costs.

The RNC has also spent some $25,000 on customized Sharpies for the president — markers retrofitted in glossy black and embossed with Trump’s golden signature. These “political expenses,” Reed said, are not unusual for presidents. “The taxpayers,” he said, “shouldn’t have to cover these costs.” Sharpies are the president’s preferred writing tool, and he uses them to sign documents and, in one notable recent instance, annotate maps.

As chief of staff, Walters is responsible for the party’s overall budget, approving the budgets of its various departments, handling personnel issues and dealing with donors who want access to McDaniel. Additionally, McDaniel said, Walters oversees “massive new investments” in the organization’s data, political and digital teams. Last year, McDaniel was paid $100,000 less than the total amount Walters took in from the RNC.

Crucially, the chief of staff also executes all RNC vendor contracts, making Walters a key figure in the small network of operatives and friends who have struck lucrative contracts with the party.

Reed said there is a backstop beyond Walters when it comes to contracts. The RNC’s budget is approved by two committees and voted on by the organization’s 168 members, he said.

In 2018, Holtzman Vogel Josefiak Torchinsky, an election and campaign law firm in Virginia, formed four LLCs tied either to Walsh, Shields, a Shields business partner or, in the case of Red Wave, Walters. Collectively, the RNC has paid them $865,000.

Walsh, along with other Republican consultants, maintains an office on the RNC’s fourth floor, just feet from Walters and McDaniel. Since early 2017, when she left the White House, the organization has paid her more than $745,000 through a consulting company. That contract predates Walters’ tenure as chief of staff, though the RNC declined to say whether Walters has reapproved it.

For her part, Walsh said in a statement to ProPublica, “Since my contract with the RNC is well within or below market rate, the only conclusion I can reach from the insinuations being made in this ‘article’, is that there are some people in the fake news/left wing media who don’t believe a young, accomplished woman should have a seat at the table.”

Shields didn’t return a phone message seeking comment.

Another RNC arrangement involves a close Walters friend. Not long after he became chief of staff, a photographer named Blake Belcher, a college classmate of Walters, set up an LLC of his own, according to corporate records in Mississippi, where the company, Concept Marketing & Branding LLC, is registered.

Belcher has been receiving modest payments for his “photography services” from the RNC on and off since 2015, two years before Walters became chief of staff. Typically, the transactions amount to several thousand dollars and are attributed to his name in FEC reports.

Starting in December 2017, the month Belcher established his company, and several months after Walters became chief of staff, the RNC also began to pay Concept for “printing & design services” and “printing/graphic services.” Some of the expenditures to the LLC were significantly higher than those connected to Belcher’s name, including one for roughly $78,000, and another for more than $89,000.

Asked about the arrangement, Belcher deferred to the RNC. The payments, the RNC spokesman Reed said, covered production costs for a host of items, including invitations, business cards and Christmas cards.

“This company has been chosen multiple times after a bid process,” he said. “And they have always come in the cheapest.”

Last summer, Belcher was hired to take photographs at an RNC event that featured Walters. After it was over, Belcher posted 88 photos of Walters on his website. In one series, the chief of staff, dressed in a pink plaid sport coat, his dark beard neatly trimmed, stands behind a lectern that bears the names of Trump and his vice president, Mike Pence. In a different sequence, he’s seated on a panel, holding a microphone. All of the photos are for sale, starting in wallet size, for $2.50.

Reed told ProPublica that Belcher has been “hired to take pictures at countless RNC events,” including “many” where Walters was not an attendee.

Photo Credit: Gage Skidmore

Republicans Blame Obama (And Biden) For Russian Election Meddling

Republicans have decided to blame President Barack Obama for the extensive contacts between the Trump campaign and Russian operatives.

“We need a full accounting of what Obama and Biden knew and when they knew it,” Ronna McDaniel, the Republican Party national chairwoman, wrote on Friday.

The day before that, Trump’s reelection campaign released a video and email that fabricated a “stand down” order from Obama, after he purportedly learned that Russia was interfering in the election.

Sarah Sanders parroted the lie while speaking to reporters on Thursday, arguing that the Obama administration “actually didn’t do anything to stop interference in the election.”

In reality, when the Obama administration tried to raise the alarm on Russian election interference, it was blocked.

The Obama administration learned about Russia’s infiltration attempts in July 2016 and held a briefing with congressional leaders in August of that year.

When Senate Majority Leader Mitch McConnell caught wind, he threatened to publicly accuse Democrats of trying to throw the election if the CIA came forward with the information they had.

“I will condemn you and the Obama administration for trying to mess up this election,” McConnell reportedly told then CIA-director John Brennan.

And now, thanks to the Mueller Report, we know there was repeated contact between Trump’s campaign and Russian operatives.

Trump campaign leaders, including Trump’s son Donald Jr., sought out the Russians in 2016 for information that they believed would be damaging to Hillary Clinton.

So, at the same time that President Obama and his national security team were trying to prevent Russia from interfering in the election, Trump’s campaign was reaching out for Russian help.

And Mitch McConnell was actively working against American interests in service of short-term Republican Party gains.

The reality is completely the opposite of the story being peddled by Trump, his campaign, and his underlings.

Obama tried to stop a foreign government from perverting one of America’s most sacred institutions, and now the Trump team is clumsily trying to blame him for Trump’s own violations of national trust.

Published with permission of The American Independent.

IMAGE: President Barack Obama waves as he leaves the podium after speaking to journalists during his last news conference of the year at the White House, December 16, 2016. REUTERS/Carlos Barria

FBI Raided Trump Fundraiser’s Office in Money Laundering Probe

Reprinted with permission from ProPublica.

Federal authorities raided the office of Republican fundraiser Elliott Broidy last summer, seeking records related to his dealings with foreign officials and Trump administration associates, according to a sealed search warrant obtained by ProPublica.

Agents were authorized to use the mega-donor’s hands and face to unlock any phones that required fingerprint or facial scans.

The Washington Post reported last August that the Justice Department was investigating Broidy. The sealed warrant offers new details of federal authorities’ investigation of allegations that Broidy had attempted to cash in on his Trump White House connections in dealings with foreign officials. It also shows that the government took a more aggressive approach with the Trump ally than was previously known, entering his office and removing records — just as it did with Trump’s personal lawyer Michael Cohen.

Broidy served as a major Trump campaign fundraiser and was the national deputy finance chair of the Republican National Committee until he resigned in April 2018, when it was revealed he had agreed to secretly pay off a former Playboy model in exchange for her silence about their affair.

The search warrant cites three potential crimes that authorities are investigating: conspiracy, money laundering and violations of the law barring covert lobbying on behalf of foreign officials. To obtain a search warrant, authorities have to convince a judge that there’s a probable cause they will find evidence of those specific crimes.

The search warrant also for the first time links Broidy to a globe-trotting Miami Beach party promoter.

The warrant, filed in July 2018, targeted Broidy’s office in Los Angeles. The scope of what authorities were seeking was broad. They planned to seize any evidence related to a list of dozens of people, countries and corporate entities, according to the warrant. Among the names on the list are Rick Gates, the former Trump campaign official who has pleaded guilty in the Mueller probe; Colfax Law Office, the firm founded by Robin Rosenzweig, Broidy’s wife; and several foreign countries.

Spokespeople for the Justice Department and the FBI declined to comment for this story.

Broidy’s attorney as well as a spokesman did not answer a list of detailed questions sent by ProPublica.

Broidy, an investor based in Los Angeles, pleaded guilty in 2009 to charges connected to his role in a major New York state public corruption and bribery case. But after backing Trump for president, he saw his star rise again. After the inauguration, he played a central role in filling administration vacancies, according to reports by ProPublica and others.

However, he once again quickly became mired in controversy, amid allegations of influence peddling and his dealings with the former Playboy model.

The search warrant shows that federal authorities are interested in Broidy’s alleged work for the Malaysian financier Jho Low, who is at the center of a sprawling international scandal known as 1MDB. In November, the Justice Department unveiled a bribery and money laundering case against Low.

In a separate filing in November, the Justice Department alleged that Broidy was paid by Low to lobby Trump administration officials to ease off on U.S. investigations into Low. Broidy is not identified by name in the filings, but he is widely reported to be the person referred to as “Individual No. 1.” Broidy has not been charged with a crime, and it’s unclear what the status of the investigation is.

Pras Michel, a member of the hip-hop group The Fugees and an associate of Low’s, funnelled the money to pay Broidy into the United States, the Justice Department alleged. Asked about the Broidy search warrant, a lawyer for Michel, Barry Pollack, said: “There has been news of this Broidy investigation for many months. Mr. Michel has not been charged with any wrongdoing whatsoever related to Mr. Broidy or anyone else.”

Federal authorities were also seeking records in Broidy’s office related to the United Arab Emirates, UAE adviser George Nader, Qatar, Saudi Arabia, and any travel to the Middle East.

The New York Times reported last year that Broidy worked with Nader to steer the White House toward decisions benefiting the UAE and Saudi Arabia. Documents reviewed by the Times showed that Nader tempted Broidy with the prospect of more than $1 billion in contracts for Broidy’s private security company. Hacked communications showed Nader praised Broidy for “how well you handle Chairman” — a reference to Trump.

Nader became a cooperating witness in special counsel Robert Mueller’s probe of Russian influence in the 2016 election, according to multiple news reports.

Broidy’s attorney has in the past responded to the allegations with a statement saying Broidy “has never agreed to work for, been retained by nor been compensated by any foreign government for any interaction with the United States Government, ever. Any implication to the contrary is a lie.”

According to the warrant, federal authorities also sought to seize any records related to China and Guo Wengui, a Chinese businessman and dissident who fled to New York, where he publicly accused the Chinese government of corruption.

The Times reported that Broidy explored plans to use his influence with the White House to force Guo out of the United States, apparently as part of an effort to curry favor with the Chinese and other foreign officials, and ultimately earn a payoff.

The search warrant for Broidy’s office also lists a name and corporation not previously linked to Broidy: “Joel Rouseau” and “Intelligent Resources.” There is a company by that name incorporated in Miami Beach by a Joel Rousseau, who is a friend of Michel’s. The search warrant does not describe Rousseau or Intelligent Resources’ role in the case.

Rousseau’s Instagram account shows him bouncing from Rio to Paris to Ibiza, frequently surrounded by models. “If you want to be successful, you need the beautiful people,” he told Crain’s New York in 2007, which described him as a specialist “in bringing agency models to clubs.” In another series of pictures, he is at an oil site in Haiti with workers he describes as his drilling crew. Rousseau made a foray into politics in 2012 when he donated tens of thousands of dollars to several Democratic Party groups.

Filings in a court case over unpaid taxes describe Rousseau as an “entrepreneur” with income swinging from under $1,000 for 2009 to over $2 million in 2013. He paid a long-standing bill for back taxes and penalties of more than $700,000 in late 2017, the filings show.

The address for Intelligent Resources is a house on Miami Beach’s exclusive Hibiscus Island. The person answering the door at the house last week told a reporter he had rented the house on Airbnb. Rousseau didn’t respond to requests for comment.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

IMAGE: Elliot Broidy.