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With Roger Sollenberger, Political Reporter

Pay Dirt is a weekly foray into the pigpen of political funding. Subscribehere to get it in your inbox every Thursday.

 

This week’s Big Dig is… How a U.S. Attorney Gave to Kentucky Republicans While Investigating the State

A U.S. attorney overseeing a federal probe into the commonwealth of Kentucky has made sizable political gifts to two Republican candidates who, if elected, would be directly involved with that investigation—the GOP nominee for attorney general, and sitting AG and gubernatorial candidate Daniel Cameron.

 

Government ethics experts said that the donations raise questions of potential impropriety, because they lend the appearance of a senior Justice Department official attempting to exert political influence over his district.

 

Cameron, as current attorney general, has already had contact with the DOJ about the probe, which the Western District of Kentucky publicly announced in May 2022 and concerns state-run mental health systems. A DOJ spokesperson confirmed to The Daily Beast that the investigation is ongoing.

A headshot of Rep. Lauren Boebert (R-CO) appears on the embellished pages of a storybook. In front of her are piles of golden coins.

Bennett—with two Ts

 

The donor—Michael Bennett, acting U.S. attorney for the Western District of Kentucky—contributed $1,000 to Cameron on May 7, nine days ahead of the primary election, according to Kentucky campaign finance records. That same day, Bennett gave $500 to the Republican running to fill Cameron’s slot, Russell Coleman, on top of a previous $1,000 donation in September. 

 

Coleman was Bennett’s predecessor and former boss at the top of the Western District, where he was appointed by former President Donald Trump. Both Republicans, if elected, would be directly responsive to Bennett’s probe.

 

The double-down

 

Legal experts told The Daily Beast that the donations lend the appearance of “political interference” and “publicly picking sides.”

 

Delaney Marsco, senior legal counsel for ethics at nonpartisan watchdog Campaign Legal Center, told The Daily Beast that voters have a right to know that Bennett is appearing to demonstrate “political interference” or “favoritism” in connection to his official duties.

 

“The public absolutely has a right to know that DOJ employees are not avoiding even the appearance of political interference or favoritism in department activities. In this case, it certainly could raise questions about whether the donating individual is attempting to influence an investigation that would impact their office,” Marsco said.

 

She added that this kind of transparency is critical when it comes to political donations, noting that absent those disclosure rules, “we would never even be able to pose the question.”

 

Jordan Libowitz, communications director at watchdog Citizens for Responsibility and Ethics in Washington, agreed with Marsco’s analysis, telling The Daily Beast that Bennett appears to be “publicly picking sides” in who will run the state he’s investigating.

 

“At the very least, there’s an optics issue, since the current governor is running for re-election and the U.S. Attorney tasked with investigating the state is publicly picking sides in who will run it,” Libowitz said.

 

A Western District representative would not comment on the investigation, citing internal policy. A spokesperson from the DOJ’s D.C. office confirmed that the probe is ongoing but declined to comment on the donations. Spokespeople for the Cameron and Coleman campaigns did not reply to The Daily Beast’s questions, and neither did the offices of the Kentucky attorney general or governor.

 

Best Western

 

A DOJ press release from the time explained that the probe—a joint effort between the civil rights divisions in the Western District of Kentucky and main justice in D.C.—centers on whether the commonwealth “subjects adults with serious mental illness” in the Louisville area to “unnecessary institutionalization” in violation of provisions of the Americans with Disabilities Act. The announcement included a statement from Bennett, who said his office would “vigorously enforce the ADA.”

 

The statement noted that the DOJ had notified both Beshear and attorney general Cameron ahead of the announcement.

 

But Beshear—who preceded Cameron as AG—claimed that investigators hadn’t contacted his office until “roughly an hour” before publishing what he characterized as an “aggressive” press release that didn’t match the tenor of their discussion. The Democrat added that he was “surprised” that the feds hadn’t reached out to any state officials or requested documentation before publicizing the investigation.

 

Rare bird

 

DOJ guidance says that U.S. Attorneys, who are typically political appointees, qualify as “further restricted” employees whose political activity is limited under the law. While those employees may make campaign contributions, a review of campaign finance data shows that active USAs rarely do so. 

 

A search of Kentucky filings by employer and occupation returned a total of two such donors: Bennett, and the U.S. Attorney for the District of Maine, Halsey Frank, who gave a total $350 last year—also to Coleman. On the federal level, records searches for donations by employer and occupation returned a total of 16 hits over the last decade.

 

Bennett, however, is not a confirmed political appointee. He has served as acting U.S. Attorney for the Western District since January 2021, when his Trump-appointed predecessor stepped aside at the end of the previous administration. That predecessor, of course, was Russell Coleman—the current Kentucky AG candidate who now enjoys Bennett’s financial support.

 

The “grim reaper” connection

 

While it’s typical for DOJ political appointees to cycle out when the White House changes hands, what’s not so typical about Bennett’s position is that President Joe Biden still hasn’t been able to advance a nominee to fill Coleman’s old slot—a congressional roadblock that has been chalked up to the Senate’s master obstructor, Minority Leader and fellow Kentuckyian Mitch McConnell.

 

It also turns out that the same person chiefly responsible for Bennett’s enduring post in the Western District is also a close ally of Daniel Cameron—an association that dogged the rising GOP star in the hostile primary. A former “McConnell Scholar” at the University of Louisville, Cameron later served as McConnell’s legal counsel and is widely seen as a potential heir when the octogenarian retires.

 

Lay of the land

 

The news of Bennett’s donations comes amid a bitter campaign roiling with accusations of financial impropriety.

 

Both parties referred the opposing gubernatorial candidate to the FBI for campaign finance allegations this month. For his part, Cameron cited a Kentucky Republican mayor’s bungled $200,000 bundling operation in support of Beshear. The next day, the Kentucky Democratic Party told the feds that Cameron may have violated ethics laws in connection with donations from an addiction recovery company his office was investigating—donations that Cameron had personally solicited, The Daily Beast reported.

 

The Cameron and Beshear campaigns have so far reported receiving nearly $300,000 combined from the health industry, according to the Center for Responsive Politics.

 

Read the full article here.

 

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From Roger’s Notebook...

Secret stash. This week, The New York Times reported that Trump’s “Save America” leadership PAC—an account Trump has tapped for millions in legal fees to attorneys in a number of matters—has quietly upped its take of joint fundraising receipts from 1 percent to 10 percent. The report uncovered archived fundraising pages that indicate the PAC updated the terms sometime in February or March—crunch time for the Manhattan district attorney’s criminal charges as well as E. Jean Carroll’s multimillion-dollar defamation suit, in addition to the multifarious past, present, and future legal threats facing the GOP frontrunner.

 

The Times found that, citing Trump’s own fundraising claims, “the fine-print maneuver may already have diverted at least $1.5 million to Save America”—half of the retainer that one of Trump’s top attorneys in the Mar a Lago documents case demanded up front last year. The report also said that in late 2022, a Trump adviser acknowledged that Save America had reserved “about $20 million” for legal costs; at the start of 2023, the PAC had about $18 million on hand. Legal experts cited in the report differed on whether it would be a clear-cut violation for the PAC to continue footing legal costs now that Trump is an official candidate.

 

The Trump campaign offered a plausible alternative explanation, citing an internal analysis that found the PAC’s email list rentals to the JFC “would be more efficient by amending the fund-raising split between the two entities.”

 

Over the moon. GOP Rep. Alex Mooney (R-WV) quietly disclosed that his alleged co-conspirator at the center of a congressional campaign finance investigation—direct mail company HSP Direct—has contributed to his legal defense fund.

 

Mooney filed his initial financial disclosure on May 15, but submitted an amended version 10 days later that included a previously unlisted $44,500 in donations to the defense fund, $5,000 of which came from HSP Direct. Last year, the Office of Congressional Ethics released a report that found Mooney “likely violated House rules and federal law” in connection with what appear to have been unreported gifts from HSP Direct, a company with longstanding personal, professional, and political ties to Mooney. It was the second such OCE report finding wrongdoing by Mooney, who is under investigation by the House Committee on Ethics.

 

In April, the Huntington Herald-Dispatch reported that HSP’s CEO gave Mooney’s campaign another $400 this year. In January, Mooney—who is also accused of taking steps to obstruct the investigation—voted in favor of new House rules that would weaken the OCE.

 

Truth is not truth. On Thursday, the Securities and Exchange Commission indicted three investors for an inside trading scheme related to the public offering for Trump’s fledgling Twitter alternative, Truth Social. The SEC claimed that the trio—Michael and Gerald Shvartsman and Bruce Garelick—used non-public information to pocket a total $23 million in October 2021. The indictment did not allege wrongdoing on the part of Trump or his company.

 

Espionage act. The FEC isn’t laughing at a new prank super PAC making fun of Rep. Marjorie Taylor Greene (R-GA). After Greene tweeted on Sunday that someone allegedly tried to access her connected TV without authorization—while expressing paranoia that this somehow indicates she’s also an assassination target (?)—someone created a super PAC called “I am spying on you Marjorie—Your TV.” The FEC wasted little time flagging the filing, alerting the treasurer—who listed an email address at a nonprofit that helps rehabilitate convicts—that it’s a crime to file false statements with the government.

 

Palmetto bug. After she was called out for inflating her initial fundraising numbers, Republican presidential longshot Nikki Haley has updated her financial filings. On Wednesday, Haley’s campaign responded to an FEC notice last month that called the campaign out for accepting excessive contributions and failing to report its ties to the joint fundraising committee that facilitated those contributions. It appears the campaign itself had been genuinely confused on the point, double-counting the joint fundraising receipts and overstating its total haul by nearly $3 million, The Washington Post reported in April. The excess amounts have since been reallocated, according to the campaign, which also filed a new statement of organization listing the JFC.

 

“Monuments to me.” Last week, Raw Story published an original investigation revealing that federal candidates have over the last 10 years given more than $14 million in leftover campaign cash to institutions of higher education. While those moves past legal muster, experts said the ethics get fuzzy as donor money goes to fund “what amount to monuments to the lawmakers’ political legacies.”

 

“Donors may be surprised, even shocked to learn that money they gave to advance a political candidate or cause ended up funding nameplates or upholstered chairs on some college campus,” the report said.

 

The day before the report was published, the former campaign for the late Sen. Johnny Isakson (R-GA) dumped its last $333,305.17 into the University of Georgia. Isakson died in December 2021 after a battle with Parkinson’s, and has an enduring legacy at UGA—this year, President Joe Biden signed a spending bill that allocated $5 million to “support new facilities and equipment for the Johnny Isakson Center for Brain Science and Neurological Disorders at UGA.”

 

Splitting hairs. Herschel Walker’s dead 2022 Senate campaign is still in talks with FEC regulators. The private discussions were revealed in a lengthy response to the agency last week regarding bizarre accounting moves that set aside excess donation amounts for a “recount” that was never in the cards. The feds flagged those donations in February, Pay Dirt reported.

 

In the letter, Walker treasurer Sal Purpurra detailed a number of dizzying reallocations in the scramble to adjust Walker’s books to the FEC’s liking. The letter acknowledged that even though the campaign initially answered the agency’s questions months ago, they were in talks as recently as June 13—and still seemed at a loss about how to reconcile the matter, adding that “we are open to a more specific request to what remedy you would prefer to see.”

 

Spoiler alert. The FEC just informed Cornel West, the hard left academic star who announced his third-party presidential bid earlier this month, that he failed to sign his June 13 statement of candidacy. But West, who launched his campaign under the People’s Party—a group started by former aide to Sen. Bernie Sanders (I-VT)—had filed a new version about a week before receiving the notice, complete with his John Hancock. The second filing wasn’t an amendment that corrected the first, however, but instead was a new statement reflecting West’s abrupt switch from the People’s Party to the Green Party.

 

More From The Beast’s Politics Desk

Steven Bannon appears in the foreground of the seal of the US Department of Justice. Behind him is a quote from a recent court affidavit of his.

As the White House gears up for battle with congressional Republicans salivating at the chance to impeach Biden officials, they’re getting air support from outside liberal groups. Ursula Perano has a look at the Democratic playbook to fight back against the impeachment plans.

 

This week, GOP presidential hopeful Gov. Ron DeSantis visited the Texas-Mexico border for a campaign event—but he also used Texas taxpayer resources, including a helicopter, and his campaign took advantage of the photo op. I broke that news on Wednesday, raising questions about possible campaign finance violations, especially on the Texas side.

 

One week into his defense of an 11-count disciplinary proceeding and facing what appears to be a likely disbarment, things aren’t looking good for top Trump coup attorney John Eastman. Jose Pagliery explains what the hearings may mean for Eastman now and down the road.

 

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