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Steve Bannon’s Dark Money Nonprofit Is in Deep Trouble

The former White House adviser allegedly attempted to profit off a group saying that it was trying to privately fund a border wall, writes Brennan Center Fellow Ciara Torres-Spelliscy.

October 13, 2020

The 2020 federal elec­tion is on pace to be the most expens­ive in history, with a projec­ted price tag that could approach $11 billion. And so far, it has seen more spend­ing from outside groups than ever before.

One factor that remains undeter­mined is the role that “dark money” spend­ing will play in the 2020 race, which, similar to 2012, pits an incum­bent pres­id­ent against a well-funded oppon­ent. Notably, 2012 saw more than $300 million in dark money spend­ing at the federal level, with around one-fourth of it from groups linked to the Koch broth­ers.

Dark money refers to elec­tion-related spend­ing that cannot be traced to its original source. Accord­ing to the Center for Respons­ive Polit­ics, $67 million in dark money has already been spent in the 2020 federal elec­tion. Dark money is untrace­able because it often comes from nonprofits that are not required to disclose their donors. And as of May 2020, dark money became even darker. Now these shad­owy nonprofits do not have to disclose donors of $5,000 or more to the IRS, thanks to a new rule issued by the Trump admin­is­tra­tion. Most dark money spend­ing in elec­tions by nonprofits are lawful but awful.

But would-be dark money spend­ers should know that if a nonprofit is suspec­ted of being part of a crime, law enforce­ment can still peel it open like an orange. We know that in part because of the trials and trav­ails of former Trump campaign manager and one-time White House adviser Steve Bannon.

He stands accused of bilk­ing hundreds of thou­sands of donors to the “We Build the Wall” effort out of millions of dollars along with co-defend­ants who have also been charged by the U.S. Postal Inspec­tion Service and the Depart­ment of Justice. As Inspector-in-Charge Philip R. Bart­lett said of the indict­ments, “This case should serve as a warn­ing to other fraud­sters that no one is above the law, not even a disabled war veteran or a million­aire polit­ical strategist.” 

One of Trump’s campaign prom­ises as a candid­ate in 2016 was that the United States would build a wall and that Mexico would pay for it — an asser­tion that was soundly dismissed by Mexico’s pres­id­ent after Trump was elec­ted. As it turns out, Congress has no appet­ite to pay for a border wall either and has failed to include fund­ing for it in budget after budget. This led the pres­id­ent to try to redir­ect funds that were supposed to go to the milit­ary or FEMA to wall construc­tion on the south­ern border. This last effort has been tied up in court as litig­ants have raised issues from separ­a­tion of powers to taking clause claims to stop the wall’s construc­tion.

Enter the enter­pris­ing Bannon with a supposed plan to privately fund the wall by rais­ing money and donat­ing it to the federal govern­ment for use in wall construc­tion. The We Build the Wall project (whose webpage is strangely still up) soun­ded prom­ising enough to hundreds of thou­sands of donors who opened up their wallets and donated. They thought the money would go to the wall, but instead, the money allegedly ended up in Bannon’s and his co-defend­ants’ pock­ets.

Accord­ing to the indict­ment, Bannon and his co-defend­ants repeatedly and falsely assured the public that they would “not take a penny in salary or compens­a­tion” and that “100% of the funds raised . . . will be used in the execu­tion of our mission and purpose.”

But accord­ing the DOJ’s press release about the case, through a nonprofit “under his control,” Bannon “received over $1 million from We Build the Wall, at least some of which [he] used to cover hundreds of thou­sands of dollars in [his] personal expenses.” The nonprofit at issue in the case was the Citizens of the Amer­ican Repub­lic, a dark money group foun­ded by Bannon with a stated goal of promot­ing economic nation­al­ism and Amer­ican sover­eignty.

Then there was another nonprofit involved in the alleged scheme — a new organ­iz­a­tion called We Build the Wall Inc. — which raised millions of dollars on a crowd­fund­ing webpage from donors who were origin­ally told the recip­i­ent of their money would be the federal govern­ment. Then the group changed its messaging to push for a privately built wall. New donors clearly ignored the obvi­ous prob­lems that a private entity would likely have if it tried to clear hundreds of miles of title permis­sions along an inter­na­tional border, and they gave millions more.

Accord­ing the indict­ment, the whole point of running money from the We Build the Wall Inc. through Citizens of the Amer­ican Repub­lic was to conceal the fact that Bannon and his other co-defend­ants were getting paid even though fundrais­ing emails prom­ised that 100 percent of the money would go toward build­ing the wall.

The plot thick­ens as Citizens of the Amer­ican Repub­lic was also reportedly paying Jason Miller, who is now a Trump campaign advisor. Back in 2018, the Citizens of the Amer­ican Repub­lic’s original plan was to spend in primary campaigns. Accord­ing to the New York Times, the organ­iz­a­tion “would spend between $25 million and $30 million — though some advisers predicted a budget as large as $100 million — to seed the primary campaigns. Half the budget was slated to be spent on voter mobil­iz­a­tion efforts on the ground in targeted districts for months lead­ing up to elec­tions, with the other half going toward advert­ising, accord­ing to people famil­iar with the plan.”

Prosec­utors are seek­ing forfeit­ure of all of the bank accounts for We Build the Wall Inc., the bank account of Citizens of the Amer­ican Repub­lic, and a $800,000 yacht named “Warfighter.” So perhaps at the end of the day, the federal govern­ment will end up with the money from the We Build the Wall effort after all.  

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center.