Uh oh…
In the best possible circumstances, legal experts told The Daily Beast, the emails suggest exponential violations of federal fundraising rules; in the worst case, they could be an indication of more serious crimes, such as wire fraud.
But Walker—who had been schooled on campaign finance rules since his campaign launched in Aug. 2021, according to a person involved in those conversations—appears to have dismissed the Washington team’s concerns that the money may have gone to the wrong place. When a third party informed a Washington Company executive that the money couldn’t be used for political purposes, they raised the issue with Walker, asking at one point whether the funds should be redirected to a super PAC supporting his candidacy.
Where did all that money go?
Walker never contributed any of his own money to his campaign, according to Federal Election Commission filings, and it’s unclear what happened to these particular funds. Walker may have ultimately returned the money to Washington, but he did not reroute the money to the super PAC, according to FEC filings and a person with direct knowledge of the events.
“It was good talking with you today,” Tim McHugh, executive vice president for the Washington Corporations, wrote to Walker last November. “After our call, [redacted] reached out to me and said [a person] clarified with you that any funds sent to the HR Talent account cannot legally be used for political purposes. Political contributions must go to either the Team Herschel or 34N22 accounts.”
34N22 was a super PAC supporting Walker. Walker was not allowed to solicit donations for the super PAC in excess of federal limits, which this amount of money explicitly was. But that was not McHugh’s concern; he was worried about the hundreds of thousands of dollars his boss had wired to HR Talent in March.
“We will need your assistance to get the prior contributions made to the HR Talent account in March corrected,” McHugh concluded in the email.
This seems bad
According to the legal experts who spoke to The Daily Beast, this scheme appears to not just be illegal—it appears to be unparalleled in its audacity and scope. The transactions raise questions about a slew of possible violations. In fact, these experts all said, the scheme was so brazen that it appears to defy explanation, ranking it among the most egregious campaign finance violations in modern history.
Saurav Ghosh, director of federal reform at Campaign Legal Center, called the arrangement “jaw-dropping.” Jordan Libowitz, communications director at Citizens for Responsibility and Ethics in Washington, said if Walker “used the campaign to funnel money into his own business, that’s one of the biggest campaign finance crimes I’ve ever heard of.” Brendan Fischer, a campaign finance lawyer and deputy executive director of Documented, remarked that the exchanges were “stunning and, to my knowledge, without parallel in recent history.”
‘Extraordinary and unprecedented’
“Campaign finance laws are designed to prevent massive under-the-table payments like those described here,” Fischer said. “While we don’t have all the facts, these emails point to highly illegal, potentially even criminal activity.”
Paul S. Ryan, a campaign finance specialist and deputy executive director at the Funders’ Committee for Civic Participation, said the situation suggests a “criminal violation” that is “extraordinary and unprecedented in my 25 years of campaign finance watchdog work.”
“There’s no legal way that this could have played out,” Ryan said.
Neither Walker nor his wife, Julie Blanchard, returned The Daily Beast’s detailed request for comment. Representatives for Washington also didn’t reply to The Daily Beast’s questions.
‘Frying pan or the fire’
Federal law prohibits candidates from converting campaign donations to personal use. The law also limits how much money individuals can contribute to a campaign, as well as how much candidates can solicit from donors. Candidates also cannot solicit, accept, or facilitate contributions in the name of another person.
According to legal experts, campaign finance violations become criminal if the violation was “knowing and willful”—essentially, if the person understands the laws.
The Washington emails explicitly raise the issue of wire fraud, legal experts told The Daily Beast, if Walker falsely represented his intentions for the money, saying they were for the campaign while in fact they were for his company. But if he did use the money to support his political activity, that would also trigger a separate slate of legal questions, because Walker never reported spending any of his own money on his campaign.
“It’s the frying pan or the fire,” Ghosh said.
Money, Money, Money, Monnn-eeeeyyy
In all, the emails indicate that Walker solicited a combined $700,000 in political contributions from the Washingtons, instructing that more than $600,000 of that amount be wired directly to one of his companies, HR Talent.
Washington also gave significant money to 34N22—Walker’s super PAC—making a $500,000 contribution days after Walker initially asked for the $535,200, Federal Election Commission records show.
A super PAC representative confirmed that the $500,000 came from Washington directly. And according to a person with direct knowledge of the events, that $500,000 didn’t come out of the $535,200—they were two separate transactions. That would indicate that, at least for eight months, Walker’s company directly pocketed the $535,200.
Read the whole story—as well as the damning emails—here.
