Fiduciary duty Asked Wednesday why his loans were no longer attributed to his personal funds, Santos appeared to deflect. “Sir—let’s make it very clear: I don’t amend anything, I don’t touch any of my FEC stuff, right?” Santos told CNN reporter Manu Raju. “So don’t be disingenuous and report that I did because you know that every campaign hires fiduciaries.” Santos added that he was “not aware” of why his filings were revised, and promised “an answer for the press regarding the amendments.” As for the question at the heart of the amendments—the origin of Santos’ loans—Raju wrote on Twitter that Santos “refused to explain” the source of money. You can’t hire me—I quit Later that day, however, the campaign appeared to change the “fiduciaries” that it had hired. And yet, that change was in turn contradicted by the new treasurer, who apparently never agreed to the new job. That kerfuffle took place after the FEC posted new statements of organization filed by Santos’ five federal political committees, including his campaign, claiming their treasurer, Nancy Marks, had handed the books over to another accountant popular among Republican officials, Thomas Datwyler. But Datwyler’s attorney, Derek Ross, told The Daily Beast those filings were inaccurate, saying Datwyler had rejected the Santos campaign’s offer earlier this week. “On Monday we informed the Santos campaign that Mr. Datwyler would not be serving as treasurer. It appears there’s a disconnect between that conversation and the filings today, which we did not authorize,” Ross said. Right now, it’s unclear who, if anyone, is legally serving as Santos’ treasurer—a problem that Brett Kappel, campaign finance law expert at Harmon Curran, said would prohibit the campaign from conducting any financial activity. “The Federal Election Campaign Act requires that every political committee always have a treasurer in office—otherwise the political committee cannot make any expenditures or accept any contributions,” Kappel told The Daily Beast. He pointed to 52 USC §30102, which states that “no contribution or expenditure shall be accepted or made by or on behalf of a political committee during any period in which the office of treasurer is vacant.” It’s unclear whether the office is technically vacant. Santos did not reply to The Daily Beast’s request for comment. But a person familiar with the situation told The Daily Beast on Wednesday that Datwyler had been in communication with Santos’ attorney and the FEC “to let them know we didn’t authorize this.” Unchecked Experts in campaign finance law told The Daily Beast that, given the irregularities in Santos’ loans, fundraising, and spending, bigger problems could await the treasurer, who could face personal liability if they knowingly submitted false statements on federal filings. “The stakes and exposure for a treasurer are a little bit different than for the candidate,” said Paul S. Ryan, deputy executive director Funders' Committee for Civic Participation. “The treasurer is personally responsible for ensuring that paperwork filed with the government is accurate. We know team Santos is in the crosshairs of the DOJ. While we don’t know the full range of the investigation, one of the most commonly charged statutes in campaign finance is a provision of the criminal code which prohibits anyone from knowingly falsifying, concealing, or omitting a known fact from the federal government.” On Tuesday, The Daily Beast reported that the Santos campaign submitted a slew of amended FEC reports. Those amendments covered all 10 of its filings from the 2022 election cycle, and included one critical change—unchecking the box that previously said hundreds of thousands of dollars in loans from the candidate came from his “personal funds.” “If I’m the treasurer and I don’t know where the money came from, then I’m on the hook, and I’m gonna uncheck that box,” Ryan said. Jordan Libowitz, communications director for Citizens for Responsibility and Ethics in Washington, echoed that view. “The comment Santos made blaming his treasurer lends some credence to the idea that in those amendments, his treasurer was trying to separate herself from the claims,” Libowitz told The Daily Beast. “The treasurer has a fiduciary duty where they can be held personally liable for the claims. If there’s no proof of where the money came from, or if there’s reason to doubt that it came from him, one plausible explanation is that his treasurer unclicked boxes because she could no longer stand by the claim. If she’s planning on putting this on Santos, saying he lied and she didn’t want anything to do with it, that’s a plausible explanation.” Seventh time’s a charm The amendments on Tuesday all featured changes on all the initial disclosures of loans Santos made to his 2022 congressional campaign—a total of $705,000, in three installments. While the amendments all still say the initial loans came “from the candidate,” they—almost paradoxically—omit specifying that the money came from his “personal funds.” The first loan, $80,000, came on June 30, 2021, and appears in the campaign’s July 2021 quarterly report—which has now been amended a whopping seven times. The next loan, a $500,000 injection, came on March 31, 2022. The final loan was for $125,000, and was, according to the Santos campaign’s reports, transferred on Oct. 26, 2022, about two weeks ahead of the election. No no—I meant “personal funs” While the newly amended reports still say the loans came “from the candidate,” they do not say the money came from his “personal funds.” For the first two loans, that was a change. As for the third loan, that detail had not even been addressed on the appropriate schedule in the original filing—a failing the FEC flagged in a letter to the treasurer, Marks, last month. When she submitted the new filing on Tuesday, the “personal funds” box was unchecked. All those loans came after Santos formed his private company, the Devolder Organization, which he previously told The Daily Beast was the original home of the money that he used to underwrite his campaign. Saurav Ghosh, director of federal campaign finance reform at bipartisan watchdog Campaign Legal Center, noted that clerical error may play some role, because some of the campaign’s subsequent amended filings for other reporting periods did not include the personal funds change—though all the reports disclosing the initial loan did. That unchecked box, Ghosh said, only raises new questions, because while it says where the funds did not come from, it does not say where they did come from. “Under the law, a candidate loan is one of two things. Either it’s from the candidate assets and bona fide income, or it’s a bank loan of some kind with terms disclosed on an additional form,” Ghosh explained. “It looks like starting in September last year the campaign started checking the ‘personal funds’ box on all of those loans. That practice continued until yesterday. But as a matter of legally required disclosure, that’s not an acceptable category—if it’s not personal funds, you need to divulge more information.” Ryan agreed. “Unchecking the box triggers further disclosure, for the terms of the loan and source of the loan. Those are important for the public, the FEC, and law enforcement to scrutinize, to compare terms of that loan to other terms, because politicians can’t get a sweetheart deal from a lender,” Ryan said. “If this was in fact by implication a statement that these weren’t his dollars, then we need to know more.” A George divided against itself cannot stand For Santos, Ryan said, “his legal problem is that the law defines ‘contributions’ to include loans. Call it a loan, doesn’t matter. They’re still subject to limits. And unless a loan meets the narrow requirements of being permissible, then it’s considered a contribution, and there’s a violation if the actual source of those funds is impermissible.” “At the end of the day, what matters is where the money came from,” Ryan said, pointing to questions about possible straw donors or corporate contributions, raised in The Daily Beast’s previous reporting. “Given what we know about Santos, the notion that it came from a permissible source is far-fetched.” The question is also central for Ghosh, whose CLC filed a civil complaint earlier this month alleging that the Santos campaign committed a host of violations, including possible straw donations and personal use. “These filings have added a lot of smoke, but the underlying fire is still there,” Ghosh said. “Where did this money come from?” | 