Former White House chief strategist Steve Bannon and three other men were arrested Thursday morning and charged with defrauding donors to a crowdfunding campaign that promised to construct a border wall.
Bannon was arrested by US Postal Inspection Service agents while aboard a yacht off the coast of Westbrook, Connecticut, according to NBC. The charges were filed by the US Attorney’s Office for the Southern District of New York. Bannon pleaded not guilty on all charges Thursday afternoon, and was released on $5 million bond, secured by $1.75 million in assets.
The charges relate to a GoFundMe campaign started in December 2018 that went viral among conservatives, eventually raising $25 million. The campaign was started by veteran Brian Kolfage, and Bannon got involved when money started pouring in.
Kolfage and others involved in the fundraising effort repeatedly promised that “100%” of the money raised would be used to build a wall, and none would be paid to Kolfage himself or other board members. Prosecutors allege they violated these promises, paying hundreds of thousands of dollars to outside groups or companies that were then steered to Kolfage.
“While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,” Audrey Strauss, the acting US attorney for SDNY, said in a statement. Other money, prosecutors allege, was paid to a nonprofit run by Bannon and spent for his personal use.
The news comes at an interesting time for SDNY. Two months ago, Attorney General Bill Barr tried to force out the US attorney for the office, Geoffrey Berman, and to replace him with someone outside the ordinary line of succession. Berman professed to be deeply worried about what might happen to unspecified investigations SDNY was pursuing and initially refused to resign. Only when Barr agreed to let Strauss — Berman’s trusted deputy — take over did Berman accept his firing.
It’s unclear whether this is one of the investigations Berman was so set on protecting. But whatever the case, Bannon is now the newest name on a long list of top Trump advisers who have faced charges under Trump’s administration.
Trump supporters pledged millions to get the wall built. Prosecutors say Bannon and others took hundreds of thousands for themselves.
Nearly two years into the Trump administration, there was relatively little progress on one of Trump’s central campaign promises: building a wall on the US-Mexico border. And some of his supporters were frustrated, as they wondered why it couldn’t happen.
So in December 2018, Brian Kolfage, an Iraq War veteran and triple amputee, came up with an unusual idea. He set up a GoFundMe page asking Trump supporters to contribute money themselves to get the wall built. The campaign, which pledged that “100% of your donations” would be given to the federal government for the wall, went massively viral on the right — $20 million in pledges poured in.
But GoFundMe had some concerns about all this. How, exactly, was Kolfage going to give all this money to the government? How would he make sure the government would use it for wall-building? So GoFundMe told Kolfage he needed to find a credible nonprofit organization to accept the money or else it would all be sent back to the donors.
This thing had gotten pretty big and there was a lot of money at stake, so Kolfage needed help. Enter Steve Bannon. The former head of Breitbart News, Bannon had been Trump’s campaign CEO in 2016 and served as White House chief adviser in 2017. He eventually exited the administration on bad terms, and his relationship with Trump only worsened after he was a major source for a sharply negative book about the president. Still, Bannon’s pro-wall credentials were unimpeachable, and he had lately entered the nonprofit space.
So, working with venture capitalist Andrew Badolato, Bannon quickly “took significant control of” Kolfage’s GoFundMe campaign, prosecutors claim, “including its finances, messaging, donor outreach, and general operations.”
Under the new plan they hatched, the money raised would no longer be given to the government — it would be given to a new nonprofit group called “We the People Build the Wall” which would pursue the private construction of a border wall.
Because of these changes, GoFundMe required them to contact the initial donors again and get them to confirm they wanted their donations used for this. And while making this outreach, they promised donors that “100% of funds raised” would be used to build the wall, and that not “even a penny” would be used to pay Kolfage. “I’m taking nothing! Zero,” Kolfage wrote on social media. He also added that the “board won’t see any of that money” and described the group as a “volunteer organization.” So, by late 2019, they had successfully raised $25 million.
But prosecutors assert that these promises that Kolfage wouldn’t be paid were fraudulent. “Hundreds of thousands of dollars were siphoned out of We Build the Wall for the personal use and benefit of Kolfage, Bannon, Badolato,” and Kolfage’s associate Timothy Shea. These payments, they assert, were often made to outside groups and subsequently redirected to Kolfage.
Kolfage himself received more than $350,000 in donor funds, which he then used for ”home renovations, payments toward a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments, and credit card debt,” prosecutors allege.
A nonprofit started by Bannon, meanwhile, received $1 million from the wall campaign — some of which was used to pay Kolfage, but a “substantial portion” of which was spent for Bannon’s personal use, prosecutors claim.
The bigger picture
The allegations here are fairly straightforward claims of financial fraud — that Bannon and his associates made promises to wall-supporting donors and then betrayed those promises for personal gain.
But Bannon is just the latest addition to what’s now a remarkably long list of top Trump associates who have faced criminal charges during Trump’s administration.
The president’s campaign chair, longtime lawyer, longtime political guru, national security adviser, deputy campaign manager, and a campaign foreign policy adviser all faced charges in the Mueller investigation. (That would be Paul Manafort, Michael Cohen, Roger Stone, Michael Flynn, Rick Gates, and George Papadopoulos.) Now Trump’s campaign CEO and White House chief strategist, Bannon, has been charged too, albeit in a separate matter.
The news is also noteworthy because the indictment was filed by the US Attorney’s Office for the Southern District of New York, which was the site of some tumult earlier this summer.
In June, Attorney General Barr announced that US Attorney Geoffrey Berman would be “stepping down” from SDNY. He would be replaced temporarily by the US attorney for New Jersey, Craig Carpenito, while another person, Jay Clayton, was awaiting Senate confirmation to hold the position.
All this was highly unusual, in part because Berman had not in fact agreed to resign (which he soon made clear in a public statement), and in part because Barr was circumventing the person who would ordinarily succeed Berman — Berman’s deputy, Audrey Strauss — to slot in a handpicked appointee on an acting basis.
The next day, Barr had Berman officially fired, but he made an important concession. Strauss would be allowed to succeed Berman on an acting basis, after all.
During and after all this unfolded, Berman repeatedly implied that he was concerned about the effect Barr’s personnel changes would have on “investigations” and “important cases” that SDNY was pursuing, though he didn’t specify which. But the indictment of Trump’s former campaign CEO does indeed seem to have proceeded unimpeded.
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