Posted on 08/21/2020 11:06:53 AM PDT by Red Badger
Editor’s note: Federal prosecutors in New York have arrested former senior Trump adviser Steve Bannon and three other men, and charged them with allegedly defrauding hundreds of thousands of donors to an online fundraising campaign to build portions of wall along the U.S. border with Mexico. Lloyd Hitoshi Mayer, a University of Notre Dame law professor who researches nonprofits, explains what’s going on and what the consequences could be.
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1. Who is accused of what, exactly?
Audrey Strauss, the acting U.S. attorney for the Southern District of New York, has accused Bannon and the founder of the “We Build the Wall” crowdfunding campaign, Brian Kolfage, of lying to donors about how their gifts would be used. Two other men, Andrew Badolato and Timothy Shea, are also accused of participating in this alleged scheme.
Kolfage launched the GoFundMe campaign in 2018, originally calling it “We the People Build the Wall.” With Shea’s help, he sought to raise a US$1 billion to support the Trump administration’s effort to build a wall on the Mexican border. But when the campaign only raised around $20 million and it turned out the government could not legally accept the funds, GoFundMe insisted that the funds be returned to about 325,000 donors. In response, Kolfage launched We Build the Wall, Inc., a nonprofit, to receive and use the donations.
To convince donors to redirect their gifts, Kolfage promised that the funds would go “toward wall construction only.” The indictment alleges that Bannon and Badolato helped Kolfage set up the new nonprofit, and that all four defendants told donors that if they agreed to redirect their gifts to the nonprofit “100% of the funds raised” would be used to construct the wall and that no one would be compensated for work tied to this effort. Most donors agreed to shift their money.
But the nonprofit, the authorities determined, paid Kolfage an initial salary of $100,000 in February 2019, followed by monthly payments of $20,000. All told, Kolfage received $350,000 in compensation he spent on personal expenses, including boat payments, home renovations and a SUV. The nonprofit also paid for hundreds of thousands of dollars of personal expenses for Bannon, Badolato and Shea. To hide these transfers, the four defendants allegedly funneled money through another nonprofit, a for-profit shell company under Kolfage’s control and accounts controlled by unnamed associates using “fake invoices,” according to the indictment.
The defendants stand accused of lying to obtain money using electronic communications (wire fraud) and the U.S. Postal Service (mail fraud). They also stand accused of money laundering, that is transferring funds to conceal criminal activity. Strauss brought the charges because at least some of the actions occurred in New York.
Bannon pleaded not guilty and will remain in Washington, D.C. on a $5 million bond while awaiting trial.
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2. What’s the big deal?
Nonprofits may legally pay their leaders. What the defendants did wrong was lie to donors about whether Kolfage would be paid and how the funds would be used. But of course without those lies, it’s hard to know how many donors would have agreed to transfer their gifts to the nonprofit.
Bannon is a former senior adviser to President Donald Trump, making this a high-profile case with potential ramifications for the Republican Party.
Several prominent Republicans have supported We Build the Wall. For example, Donald J. Trump Jr. spoke at a fundraiser and former Kansas Secretary of State Kris Kobach serves as the group’s general counsel and sits on its advisory board, along with Erik Prince – a major Trump campaign donor who founded the controversial security company formerly known as Blackwater and whose sister is Education Secretary Betsy DeVos. The indictment didn’t name Prince, Kobach or Donald Trump Jr.
Bannon now joins Trump associates Paul Manafort, Michael Cohen, Roger Stone, Michael Flynn, Rick Gates and George Papadopoulos in facing federal charges.
The allegations also fit into a larger pattern of Bannon’s questionable use of nonprofits. In April 2020, Bannon faced questions about his co-founding of two nonprofits with Guo Wengui, a fugitive Chinese billionaire. Bannon was aboard Guo’s yacht off the Connecticut coastline when federal agents arrested him.
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3. How has President Trump responded?
Asked about Bannon’s arrest shortly after it occurred, Trump called it “a very sad thing” but stressed that he had not been dealing with his former adviser “for a very long period of time.” The White House also issued a statement that claimed Trump “does not know the people involved with this project,” which was immediately contradicted by media reports and other evidence.
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4. What are some of the potential consequences?
The federal charges could lead to prison sentences of up to 20 years and fines in the hundreds of thousands of dollars. On top of these penalties, the defendants may have to repay the fraudulently obtained funds to their donors.
It is also unclear what the future holds for We Build the Wall, especially with the arrest of its leaders. It has funded various private wall-building efforts, but those have run into structural and legal challenges. Prosecutors have asked for funds in various We Build the Wall bank accounts to be forfeited, which could leave the group without the means to continue operating.
But I saw what you did there.
Just don’t let’s get in to indicting former Presidents unless the crime is particularly heinous, like getting an ambassador killed.
Yeah, the curse of fat fingers on a virtual keyboard.
Thanks.
Dude, what kind of “proof” do you expect to get?
I’ve heard three concordant reports that fit with what we have seen happening—or not happening, rather.
My take:
Kolfage demanded a salary, Bannon agreed and arranged moving the money to pay his salary and expenses. While he was at it, he took care of himself and the other two defendants. Probably legal except that they had agreed that they would not take any compensation and made that promise publically to the donors. As Ricky said: “Lucy you have a lot of explaining to do.”
So whoever is president gets a lifetime stay out of jail free card?
IMO he’s the last guy who should be given that.
And Klinesmith is a p-poor substitute for going after the president and VP as the real perpetrators.
THere is no swamp draining—zero—if everyone of significance is protected.
Yeah! Sure!
"Evidence" and "reports" we can really believe.../s
Same E & R generators/sources were used for Russian collusion and peeing on the bed...
Just one more charge to be added to the list in late January by the new administration (if elected)...
By March or April, Trump, wife, children, and many friends will die, be jailed in Libya or Thailand, or be in insane asylums getting lobotomies...
Communist history is clear on these tactics...
As a reminder...
The communists have a strategy that has been used throughout their history... (Only the names are changed):
Literally the bottom line of that story.
De Facto immunity is ethereal and not ratified by
a judge. How binding do you think that would be? And do you think Barr is doing that?
He is a she.
Audrey is female. And she worked for U.S. attorney, Geoffrey Berman who was removed by President Trump on June 20th. She was the Asst. U.S. Attorney under Berman.
Of course not. It is an informal term for being told from the top that some honchos are off limits.
Barr is the overlord at this point. And yes, I absolutely do. THought he would from before he was named. He’s long been a CIA/Bush family fixer. Only came back to make sure the deal with Trump was kept.
Since then he’s fiddled and diddled and done nothing but cough up a puny charge on a puny little foot soldier just before the election and right about as the statute of limitations is coming up on many possible charges.
Will watch Barr closer. Thanks.
To make sure what deal with Trump was kept?
Prosecutors have asked for funds in various We Build the Wall bank accounts to be forfeited,
...and watch it vanish down the rabbit hole.
It would turn to smoke and the people who donated it
will probably get none of it back.
Lawyers and officials will make out though.
A truce between the Bush and Trump families. As the Bush family was supportive of Russiagate and particularly the Mueller probe. And reportedly after Poppy’s death, none of the next generation wanted to carry on his corrupt business.
Agree. He should be named as an unindicted co-conspirator but not charged himself.
That’s “splainin’”.
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