Trojan horse. The House Ethics Committee announced this week that ultra-MAGA Rep. Troy Nehls (R-TX) is under investigation, involving an unknown matter that Nehls says is related to his campaign finances.
The details are still publicly unavailable, and Nehls’ office did not reply to a detailed comment request from Pay Dirt in time for publication. However, our review of financial records uncovered a few issues that could have raised red flags.
Notably, Nehls amended two annual financial disclosures late last month—covering the 2021 and 2022 calendar years. The amendments both made the same change: adding Nehls’ position as a proprietor of a company called “Liberty 1776 LLC.” Campaign finance records reveal that this LLC received more than $25,000 in rent payments between 2019 and 2022, from the Nehls campaign.
Brett Kappel, a campaign finance and government ethics specialist at Harmon Curran, noted that Nehls should have disclosed this company from his very first filing as a candidate, in 2019. And while it’s not necessarily illegal for a campaign to rent property owned by the candidate, Kappel said, “failing to disclose the ownership of the property and the changing rental amounts raise the specter of converting campaign funds to personal use.”
The campaign changed rent vendors to “Patriot Media LLC” in September 2022—albeit briefly—with two back-to-back $5,000 payments sent to an address that Nehls once listed as campaign headquarters. (The location now appears to be the site of a madrasa.)
But Nehls’ reports raise other questions as well.
Last year, his campaign tried to brush off an “unauthorized wire transfer” of more than $157,000 to a mystery entity called “Misty J Productions,” in July 2022. The campaign claimed that the payment was made through “fraudulent means,” and nearly all of it was returned almost immediately. However, the campaign for some reason did not recoup an even $20,000, and has not explained the discrepancy. The repayments were made in two installments, with the second and final one coming on Sept. 30 that same year—days after the campaign made its two $5,000 “rent” payments to Patriot Media LLC.
Another matter of potential concern is the lack of documentation for Nehls’ book earnings. The congressman published a book (also July 2022), but he did not report his publishing agreement—nor did he list any royalty income—on his original or amended disclosures. He also hasn’t disclosed a publishing agreement for the book he released this year about the Southern border. Meanwhile, records indicate that his campaign made a nearly $6,000 payment last month to his publisher, Post Hill Press, for “printing.”
House Ethics rules require members to disclose royalty income, including agreements about anticipated future payments. It’s rare for lawmakers to run afoul of that rule, although it does happen; in 2021, The Daily Beast reported that Rep. Matt Gaetz (R-FL) failed to do so, leading him to quickly correct the omission.
Loud and unclear. Last week, Politico reporter Kyle Cheney revealed that two of the loudest members of Congress have quietly filed a First Amendment lawsuit, which they’ve been pursuing for months without any public spectacle, statements, or fundraising solicitations. But perhaps most curiously, none of their political committees seem to have reported any legal expenses connected to the lawsuit.
The two officials—Reps. Matt Gaetz (R-FL) and Marjorie Taylor Greene (R-GA)—filed the lawsuit in July, seeking judgment against a group of left-leaning nonprofits and two California cities over canceled political events from 2021. The plaintiffs include Gaetz and Greene in their official capacities, along with both campaign committees and their joint fundraising group, “Put America First,” which put on the 2021 tour.
Gaetz and Greene first threatened a lawsuit at the time of the 2021 cancelations, but only followed through two years later. The complaint, filed last July, targets the cities of Riverside and Anaheim, along with a slew of left-leaning nonprofits including the National Association for the Advancement of Colored People, arguing that those groups violated freedom of speech protections when they canceled their rallies amid political backlash related to the Jan. 6 insurrection and the child sex trafficking allegations against Gaetz.
Despite Gaetz and Greene’s tireless attempts to “own the libs”—and fundraise off those efforts—the two have been basically radio silent about the case. In addition, there are no reported payments over the last year to Eastman—or any of the lawyers on the case—from Gaetz or Greene’s campaign accounts or committees associated with them, including in-kind contributions, FEC records show. The Put America First joint committee previously reported about $15,000 in two installments to Eastman’s Constitutional Counsel Group, from September and December 2021, and the Greene campaign paid him an additional $10,000 in January 2022. After that, the payments stopped.
The legality here is murky.
Campaigns and committees may accept volunteer legal services, but the scope is strictly limited to FEC-related issues, and the value of the services must still be reported. On the official side, House members can accept pro bono representation for civil matters, but that exemption wouldn’t seem to apply here—ethics rules stipulate that those services must be related to “challenging the validity of any federal law or regulation,” “challenging the lawfulness of an action of a federal agency,” or challenging “an action of a federal official taken in an official capacity.” Anything else would be considered a contribution to that official.
It’s possible that the Eastman payments from 2021 and early 2022 were connected to the dispute. But it would not seem plausible that the combined $25,000 covered the preparation, research, and all of the work that has gone into fighting the case since July—a 95-entry docket, including the complaint, discovery, an amended complaint, multiple motions and declarations, and a hearing to dismiss. The plaintiffs partially won that hearing, with a judge dismissing the nonprofits from the case but allowing the suit to move forward against the municipalities.
Put America First hasn’t raised a dollar since October 2022, and as of the end of 2023 the committee had $22,744.58 in the bank. It. Its next report is due April 15.
‘Whoops.’ MTG appears to have set off another statutory battle—one that has apparently prompted the FEC to launch a full-on war against acronyms.
As Pay Dirt previously reported, Greene’s new leadership PAC—“MTG for Georgia Leadership Committee”—took issue with a letter from the FEC this month that equated its initials with “the name of a Federal candidate,” impermissible for unauthorized committees like leadership PACs.
But Greene’s team pushed back against the FEC’s “arbitrary and capricious” request, citing a sampling of 20 other leadership PACs that contain candidate acronyms or names.
“As recently explained by Commissioners Dickerson and Trainer, the only justification for limiting a political committee’s First Amendment right to free speech in choosing its preferred name is to prevent voter confusion between a candidate’s authorized committee and other unauthorized committees,” the response said. The letter noted that the PAC’s name clearly identifies it as a “Leadership Committee,” saying that “any attempt by the Commission to prohibit the Committee from using its chosen name would fail a constitutional challenge.”
Weeks later, the FEC started sending similar notices to many of those PACs and others that were not listed—totaling about two dozen notices as of this writing.
Confronted about his role catalyzing the FEC’s scorched-earth campaign, Greene’s political lawyer Derek Ross provided a statement expressing remorse.
“Whoops,” the statement said.
Brains over Braun. The FEC just hit Sen. Mike Braun (R-IN) with the second-largest fine the agency has ever imposed on a Senator—$159,000—as part of a settlement with the campaign that the FEC publicized this week.
The Braun campaign agreed to the fine and admitted they failed to accurately report candidate loans, after a long-running dispute with the FEC over an audit that found an array of serious errors. The allegations included millions of dollars in improperly documented personal loans that Braun used to fund his 2018 bid—including $1.5 million routed from his former company. Braun sought to blame his old treasurer, claiming at one point that the person had “vanished.” (I found him in a few minutes.)
In an accompanying statement of reasons, Commissioner Ellen Weintraub noted that the audit had also uncovered nearly $250,000 in excessive contributions that have still not been explained.
