How Dean Phillips Used A Secret LLC to Buy Real Estate

With Roger Sollenberger, Political Reporter

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The Big Dig this week… How Dean Phillips Used A Secret LLC to Buy Real Estate

A year after taking his first congressional oath of office, Rep. Dean Phillips (D-MN) seemed to have found himself at home in Washington, D.C.—so much so that he appears to have made it his primary residence, according to city property records.

In December 2019, Phillips bought a $1.5 million townhome in southeast D.C.—a “show-stopper,” according to Sotheby’s listing—purchasing the house outright and then borrowing $1.3 million against it the next month. That deed of trust, which Phillips executed on Jan. 31, 2020, carries an occupancy requirement that states the borrower “shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy.”

While residency discrepancies could give rise to voter eligibility problems, even retroactively, it’s hard to say from the available records whether Phillips—an outspoken advocate for transparency—would face any such issues. But when it comes to Phillips’ personal finances, to borrow a phrase, the opacity is the point.

Dean’s list

The Daily Beast has examined real estate transactions, personal financial filings, and property and tax records tied to Phillips going back eight years. A multimillionaire liquor heir and investor—the force behind Talenti gelato—Phillips deals in sophisticated financial instruments and structures. It’s a life experience uncommon to all but a select group of Americans, and not exactly in lock-step with the populism that has shaped much of the current national political debate.

For instance, Phillips doesn’t own that D.C. in his name. Instead, he used a holding company to buy it. And while he has sole membership in that company, Phillips—a member of the House Ethics Committee—has never disclosed that position, in conflict with his own committee’s guidelines.

Middleburg, Upper Class

Phillips’ holding company owns at least three properties, two of them outside of Minnesota—the D.C. townhome, as well as a historic 37-acre farmhouse estate in Middleburg, Virginia, a semi-rural enclave of extreme wealth an hour outside the Beltway, known as “The Nation’s Horse and Hunt Capital.”

After Phillips snapped up that $2.9 million property in April 2021, his wife plunged immediately into the local dressage and polo scene, leasing a new horse days after the sale closed. The home is also the place that Phillips, a fifth-generation Minnesotan who has served his Minneapolis district for three terms, selected to stage the launch of his Democratic primary challenge against President Joe Biden. (The property was displayed in its bronze autumn prime during an exclusive CBS announcement interview with video and photo ops, as well as in Phillips’ first campaign ad video.)

Good ol’ boys

Although Phillips rates low in name recognition, the three-term congressman is currently presenting himself as a viable alternative. But Phillips hails from a safe Democratic district and has never come under serious national scrutiny. His district—Minnesota’s 3rd—encompasses the western Minneapolis suburbs, and it rates as the second-wealthiest district in a state with the third-largest racial wealth gap in the country.

More consequentially, the primary challenge to Biden suggests that Phillips believes he is the best presidential candidate. Should he somehow pull off a miracle against Biden, Phillips would take on the Republican nominee—almost certainly Donald Trump—in a political moment largely defined by widespread bipartisan populist backlash against the elites. And while Trump’s supporters shamelessly embrace the billionaire celebrity with a golden telescope as one of their own, it’s unclear how Phillips would convincingly argue he is actually the man for that moment.

If such an argument exists, it won’t be found in his financial disclosures.

Eastward, ho!

The Daily Beast sent the Phillips campaign a detailed comment request ahead of publication. After multiple off-the-record phone calls, the campaign did not comment.

The records also tell a larger political story about a figure who, until his recent decision to challenge Biden for the Democratic presidential nomination, has kept a relatively low profile. Among other things, the documents illustrate a shift in Phillips’ center of gravity after he ascended to Congress in 2018, downsizing in his home state while expanding in the D.C. area.

That eastward expansion includes the 2019 D.C. townhome and Middleburg estate. Both properties are owned by a holding company that Phillips did not list on his personal financial disclosures.

The opacity is the point

Delany Marsco, senior legal counsel for ethics at the nonprofit Campaign Legal Center, said Phillips’ wealth, and the ways he has chosen to manage it, creates its own barriers to transparency.

“This is a problem we see a lot with folks who have complex finances,” Marsco told The Daily Beast, noting that members of Congress tend to be far wealthier than most Americans. The goal of financial disclosures, she said, is to make it easier for the public to see the full picture, and what possible influences may come to bear on someone selected to make decisions that affect the whole country.

“But when you have someone this complex, then their disclosures tend to raise more questions, and that of course makes it harder for the public to get the information they have a right to, to see what’s really going on,” she said.

Blue state, red flags

Marsco said that while Phillips’ failure to disclose his position in the holding company would typically raise “red flags,” the details about this entity—called “Annadea LLC”—make it difficult to say whether he committed an outright violation, or a significant one.

That’s because House guidelines about asset reporting carry exemptions for entities that hold non-income generating residential property. However, those rules don’t explicitly apply to the separate section where members must disclose positions in outside groups. Further, while Phillips did feel the need to disclose the mortgage as a liability, it’s not technically in his name—it belongs to Annadea LLC.

You can read about what else we uncovered from Phillips’ real estate transactions in the full version of this story, here.

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From Roger’s Notebook...

Return to sender. In August, The Daily Beast reported that Marlene Galan Woods—a Republican-turned-Democrat who’s running in Arizona’s swingy 1st Congressional District—received a maximum contribution from the lawyer who led Republicans’ efforts to contest the 2020 election result in Arizona.

In response, Woods, who has vocally rebuked Arizona’s election denial movement, told The Daily Beast she’d give the $6,600 to the League of Women Voters, a nonprofit that advocates for womens’ voting rights. But that donation didn’t appear in Woods’ latest federal campaign filings. Instead, the filings show the campaign simply refunded the lawyer, Dennis Wilenchik, in a transaction dated to Sept. 24.

Joe Wolf, a spokesman for Woods, provided a letter the campaign had received from the LWV of Arizona, rejecting Woods’ donation. The letter cited the group’s nonpartisan commitment and a blanket policy of not accepting money from any political candidates.

However, candidates can and routinely do find recipients of campaign cash when they need to put distance between themselves and a donor. In recent years, Democratic campaigns have cut checks to various nonprofits and charities that reflect the dollar amount of donations they received from figures like Sen. Robert Menendez (D-NJ) and former Sen. Al Franken (D-MN).

Woods had initially told The Daily Beast that her campaign “began the process” of directing the money to the League of Women Voters as soon as the contribution was brought to her attention. When The Daily Beast followed up to ask whether the campaign tried to find another suitable voting rights organization, the spokesperson essentially said they had given up.

“Upon having the check returned, we felt the best way to resolve this was to refund the contribution,” Wolf said.

Youngkin pulls a Trump. In September, Virginia GOP Gov. Glenn Youngkin called a special session of the state legislature in order to compel action on the budget. One of the fruits of that bipartisan effort was a $200 rebate to Virginia taxpayers, which the Youngkin administration fast-tracked, getting those checks delivered this week—just ahead of legislative elections.

At the time, Trumpworld forces were brushing back a possible late-game primary challenge from Youngkin. And those checks—which came as Youngkin tries to flip the Democratic-controlled state senate next week—were attached to a very Trumpian note touting the governor’s personal role while omitting the bipartisan nature of the bill.

“You are receiving this rebate because Governor Glenn Youngkin recently signed a bill passed by the 2023 Virginia General Assembly giving taxpayers who file tax year 2022 individual income tax returns, and have a tax liability, a rebate of up to $200 for an individual and up to $400 for a married couple filing jointly,” the note read.

The credit-grab smacks of the Trump administration’s unprecedented scramble to print Trump’s name on COVID relief checks during the 2020 election.

And while the state moved at lightning speed to get those checks in front of voters, it hasn’t shown similar alacrity in fixing a genuinely urgent voter issue—indeed, that problem now appears even worse. On Friday, state election officials announced that around 3,400 eligible voters had been wrongly purged from Virginia voter rolls, a more than tenfold increase from Youngkin’s Oct. 6 estimate that the error had only affected 270 voters.

Restructuring. On Halloween, Trump’s “Save America” leadership PAC filed a new statement of organization reflecting changes to its affiliated groups. The filing appears prompted by the previous day’s launch of the “Trump Bilirakis Victory Fund,” a joint fundraising committee supporting Rep. Gus Bilirakis (R-FL).

While Save America axed its relationships with a number of other committees listed in its previous org chart, almost all of them had already shut down. Bilirakis was the only new face in the lineup; outside of joint committees with Rep. Max Miller (R-OH) and Sen. Lindsey Graham (R-SC), Save America is entirely Trump-centric.

It’s unclear how much Bilirakis might get in the deal, at least in terms of fundraising. Save America has notoriously functioned almost exclusively as Trump’s political and personal piggy bank.

It’s also unclear why Trump added Bilirakis specifically. His campaign only raised $2 million in 2022, an amount that would cover two-thirds of the retainer that Save America paid Trump attorney Chris Kise last September. While the Florida congressman has been an avid defender of the several-times-over-indicted former president, endorsing Trump over Gov. Ron DeSantis in April, Bilirakis certainly isn’t alone among his fellow statesmen. Last month, Bilirakis also endorsed Trump ally Rep. Jim Jordan (R-OH) in his failed bid for House Speaker, placing an op-ed in The Hill, though Bilirakis missed the first vote because he was attending his mother-in-law’s funeral.

The filing shows that Save America cut ties with several committees, almost all of them defunct. The lone notable exception is a committee tied to Rep. Anna Paulina Luna (R-FL), whose “APL Victory Fund” got the ax. Luna had committed to Jordan early in the Speaker race, but then got behind Rep. Steve Scalise (R-LA).

Who gives a rip. After a years-long multimillion-dollar lobbying campaign, vape manufacturer JUUL shut down its corporate PAC, according to a termination report filed Oct. 27. With its dying breath, the PAC blasted cash to a bipartisan group of lawmakers—Sen. Bill Cassidy (R-LA), along with Reps. Brett Guthrie (R-AL), Steven Horsford (D-NV), Greg Meeks (D-NY), Ruben Gallego (D-AZ), Morgan Griffith (R-VA), Sanford Bishop (D-GA), Shontel Brown (D-OH), and Ritchie Torres (D-NY).

Citizens Re-United. On Tuesday, Sen. Josh Hawley (R-MO) announced a somewhat surprising campaign finance reform bill that takes aim at part of the Supreme Court’s 2010 Citizens United decision. But RealClearPolitics, which broke the news, mischaracterized the bill in its headline as “reversing Citizens United.”

The legislation only targets one element of that decision, however, by preventing corporations from pouring unlimited amounts of money into super PACs. (And thereby defanging the companies who stopped giving Hawley money after Jan. 6.) But the bill doesn’t extend that restriction to dark money nonprofits—such as, say, the Citizens United organization itself—that flood elections with millions of dollars, while never disclosing the true sources of that money.

In other words, while Hawley’s proposal includes one measure that campaign finance reform advocates would welcome, it does not address what many of those same advocates consider the core problem of the Citizens United ruling—the outsized influence of unlimited, untraceable, unaccountable cash.

Oversight update. The Federal Election Commission on Thursday approved a proposal to overhaul the investigative protocol of its Office of General Counsel, in a 4-2 vote.

The directive—a revision of GOP commissioner Alan Dickerson’s first controversial proposal in August—requires OGC to provide the commissioners with a “proposed investigation plan” in matters where it has found “reason to believe” a violation occurred, according to the revised proposal. In its summary of the new rules, the FEC said that the OGC’s plan will describe “the proposed scope and conduct of the anticipated investigation,” and will “govern the conduct of the investigation” absent the arrival of new information or changes in circumstances.

However, the revision leaves some controversial measures in place. Most notably, commissioners will now have the ability to micromanage investigations, allowing them to veto single items, including all subpoenas. If a commissioner objects to any investigative “expansion”—such as the addition of a new witness class or document subpoena—the expansion must be approved by at least four commissioners.

The proposal had riled reform advocates, who argued that it would open the door for ideological micromanagement over an already sclerotic enforcement process that commission hardliners have dramatically weakened. But Democratic Commissioner Shana Broussard—the only commissioner of the six to serve in the OGC—released a statement explaining her vote to approve, arguing that the investigative process needs to be more focused, and that her revisions addressed the most problematic elements in Dickerson’s first draft.

The two dissenting votes were actually bipartisan. In Thursday’s meeting, GOP Commissioner Sean Cooksey—former general counsel to Hawley—said that he objected to one of Broussard’s key edits, which exempted information in news reports from the definition of “expansion.” The other objector, Democratic Commissioner Ellen Weintraub, said she couldn’t support a proposal that would give political appointees such control over the OGC. Weintraub also revealed that the FEC’s enforcement arm is currently fielding 200 open matters, and only seven of them are active investigations.

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Nancy Mace’s No. 1 Priority. My colleague Jake Lahut got his hands on Nancy Mace’s employee handbook, and the guide—which Mace apparently wrote—reveals that her main priority is self-promotion. “NATIONAL NANCY,” as she refers to herself, is how she wants her staff to think of herself. Lahut has all the details, including about Mace’s own job description.

Does Mike Johnson Have a Bank Account? I took a deep dive into Johnson’s personal financial disclosures and found that, on his most recent accounting of his finances he lists zero assets. While there are some interesting rules about what you don’t have to list, it’s clear Johnson doesn’t have much money to his name, which prompted ethics experts to ask some interesting questions about his plans for after Congress as well as what’s going on.

New York AG Looked Into Rudy. At the height of Trump’s first impeachment, the New York AG internally discussed whether the office could bring charges against Rudy Giuliani, new emails obtained by The Daily Beast show. The plan went nowhere, but the internal deliberations were quite interesting. Jose Pagliery has the exclusive.

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