An extraordinary hidden-camera investigation this week by the British newspaper The Telegraph found that a former operative for a pro-Trump Super PAC appeared eager to accept $2 million from a fictitious Chinese donor to support Trump.
The operative, a significant player in GOP politics named Jesse Benton, was also willing to plot out a series of steps that would conceal the origin of the imaginary Chinese money in order to evade U.S. law banning political spending by foreigners.
But Benton’s scheme would have been impossible to even conceive of before the Supreme Court’s 2010 Citizens United decision made it far easier for foreign money to flow into U.S. elections.
Benton served as chief strategist for Great America PAC, a Super PAC supporting Trump, until Benton was convicted this May of helping to bribe an Iowa state senator in 2012 to endorse Ron Paul for president. Before that Benton managed the 2014 reelection campaign of Senate Majority Leader Mitch McConnell, R-Ky.
The Telegraph’s reporters, claiming to be representatives of a Chinese donor who wanted to see Trump elected president, first approached Eric Beach, co-chair of Great America PAC.
According to The Telegraph, Beach did not reject their entreaty, but did tell the reporters that “any path we recommend is legal.”
Shortly afterwards, The Telegraph received email from Benton which began, “Eric Beach asked me to reach out.” Benton agreed to meet with them in person, and they secretly filmed the meeting.
Benton proposed that they execute a strategy with three steps:
1. The reporters said they could send the imaginary $2 million from a Singapore company. Benton requested that they pay the money to his U.S. company, Titan Strategies LLC. He would bill them for “consulting.”
Pre-Citizens United, this would have been pointless, because the U.S. campaign finance system was based on legally-limited contributions from identifiable, individual American citizens. Under those circumstances, Benton would have had to find several hundred illegal “straw donors” to the Trump campaign.
Thanks to Citizens United, however, a corporation like Titan Strategies can make unlimited contributions from its treasury to other organizations trying to elect Trump, as long as those organizations are theoretically “independent” from the Trump campaign.
2. Next, Benton said, he would send the $2 million from his company to two 501(c)(4) nonprofit “social welfare” organizations.
At one time 501(c)(4)s were mostly nonpolitical civic groups like the Girl Scouts or volunteer fire departments. But the combination of Citizens United and an earlier Supreme Court decision made it possible for them to be used almost like Super PACs — with a wrinkle that actually makes them better for donors with something to hide. That wrinkle is that, unlike Super PACs, they are not required to disclose their contributors to the public. Benton used this as a selling point, telling The Telegraph’s reporters that “if you ever hear journalists wring their hands about ‘dark money’ in politics — they’re talking about 501(c)(4)s.”
The significance of this can be seen in The Intercept’s recent investigation of American Pacific International Capital, a California corporation that is owned by Chinese citizens and donated $1.3 million to Right to Rise USA, a Super PAC supporting Jeb Bush’s presidential run. If APIC had had the foresight to contribute to Right to Rise Policy Solutions, a 501(c)(4) affiliated with Right to Rise USA, The Intercept would never have discovered APIC’s donation.
It is true that 501(c)(4)s are required to disclose their donors to the Internal Revenue Service. But Benton did not seem at all worried that the IRS would trace the $2 million back its source — and rightfully so, because it’s almost impossible to imagine the deeply intimidated agency ever investigating a contribution.
3. Lastly, according to Benton, the 501(c)(4)s would pass some or all of the money along to the Great America Super PAC.
This of course could not have happened pre-Citizens United, since the ruling is what made Super PACs possible. But post-Citizens United, it would, as Benton put it, “definitely allow us to spend two million more dollars on digital and television advertising for Trump.”
In Benton’s scheme, Great America would have been required to publicly disclose the 501(c)(4)s as donors — but it would have been nearly impossible for anyone to trace the money back to its ultimate source in China.
It’s true that, even post-Citizens United, Benton’s proposed actions all would appear to be brazenly illegal. The difference now is they can be easily executed and almost certainly would escape detection.
Great America’s lawyer Dan Backer emphatically denied to The Telegraph that Super PAC co-chair Beach had asked Benton to act on his behalf, or that Beach had ever “solicited or accepted contributions from a foreign national or entity.” Instead, Backer said, Beach had in his contact with The Telegraph been discussing how “a U.S. company with a foreign parent company could potentially engage in legal political activity.”
Bizarrely enough, Backer is correct that — again, thanks to Citizens United — U.S. corporations that are 100 percent owned by foreigners can donate as much money as they want to Super PACs if they follow certain rules. This peculiar loophole was the subject of The Intercept’s APIC investigation.
In an interview, Backer stated that both he and Beach were aware of this loophole. He added that he had read the legal memo on the subject prepared by Right to Rise USA’s counsel when The Intercept subsequently obtained and published it.
However, Backer said, while the “memo is legally accurate, it is not something we would have gone in the direction of.” If Beach had brought him such a proposal, Backer emphasized, Great America would not have gone through with it.
For its part, the Trump campaign claimed last April that it didn’t want Great America’s support because “Mr. Trump is self funding his campaign and has disavowed all Super PACs.” Since then Trump has welcomed backing from several Super PACs.
Mr. Schwarz,
Just to clear up some confusion, we didn’t alter Podesta’s emails to show how much bribery was going on with Hillary’s campaign and the DNC. Those were their actual emails.
Your imaginary comrades,
Evil Russians
P.S. We want to know if Trump received any questions prior to his debates? We’re asking you because we couldn’t hack his team to find out for ourselves.
All that work?
You could have just literally read the podesta emails on Wikileaks. It’s all detailed out right there, and has been matched to fillings
I’m betting this ends in Revolution….the take-over of our democracy – one step at a time. From the appointment of George W. Bush to Citizens United and all these Super Pacs. the War of Terror & the bailouts of Wall Street (driveratives) –
The FORECLOSURES – the Banks ….. and the attack on the people’s pensions
It seems to me, that politicians “bribe” other politicians to endorse them all the time, with promises to share their campaign cash, by say paying off their losing campaign bills. Looks like the establishment didn’t like Ron Paul doing it though. After all, he was an actual threat to them given his fiscal conservative record – nothing hurts government more than cutting their funding/spending.
As for non-citizens who’ve an interest in a US corporation, contributing to elections, seems that since they are invested in the US, it’s only fair they be able to speak about it, even if they can’t vote. After all, candidates don’t win by spending the most money, they win by getting the most votes.
As for those who complain about foreigners giving contributions, why aren’t you complaining about politicians who sell favors that shouldn’t be sold? If government couldn’t pick winners/losers in commerce, the rich wouldn’t be trying to buy those favors. Which is why we need our free markets back, rather than the politically controlled markets we have now. This includes going back to the Common Law, rather than the politicians’ preference for Administrative Law they can, and do, change often.
I love how even british media is attacking Trump and helping Hillary! Hillary had been doing this for years how do you think she washes saudi miney into her war chest? The fact is almost every politician at state and federal LVL is doing this so yes it needs to be stopped
Great investigative journalism! The fact that Brenton was formerly with the Trump super PAC really doesn’t matter though. I’m sure the Hillary camp knows all about this as well. We just need to #flushtheswamp
The United States Supreme Court is a national embarrassment.
I do wish this got covered elsewhere besides The Intercept. I’m eager to see Clinton get taken down over emails (I’d prefer it be over Odyssey Dawn and the rat line), but I’m also eager to see other corrupt people of whatever party get taken down.
I really find it interesting that the American people seem quite content to live in a plutocracy, and swallow whatever crumbs the plutocrats feed them.
I guess Benjamin Franklin was quite prescient.
Hopefully, all this foreign money will help reduce the deficit. The trick is to put the squeeze on foreign donors by appealing to them to support the lesser of two evils. Mrs. Clinton promises war against Russia, which spurs foreign donors nervous about WW III to contribute to Mr. Trump’s campaign. Mr. Trump threatens to use nuclear weapons against anyone who insults him, which spurs other foreign donors to contribute to Mrs. Clinton’s campaign. So a virtuous circle is created and the foreign dollars pile in. Foreigners will eventually learn that they are being played, so the US may as well cash in while it can.
Why are Benton’s proposed actions “brazenly” illegal? Please explain.
Specifically, if the argument is that the *series* of transfers is somehow illegal while the individual donations are not, that assumes anyone knows about them all. But this is more like a billiards shot where each action leads predictably to the next. If Titan Strategies donated $2 million to two 501 c 4s, and didn’t formally sit down with them and tell them what to do with the money, they wouldn’t “know” in a legal sense what would happen with it, right? But it might be predictable. All the guys in the fancy suits sit in their fancy chairs because they are paid to see ‘the big picture’ without being told, right? So it could be independent, and still have the desired effect, continuing to bounce from organization to organization and right into the corner pocket as called. And if it doesn’t have the desired effect, what difference does it make? Titan would still have whatever cut of the $2 million it could extract, win lose or draw, and the worst they’d have to worry about would be a bad review on Yelp. No one could sue them for failing to do something illegal for them.
Ummmm, folks doing illegal shit don’t sue. And they don’t ‘formally’ sit down. That $2M came from somewhere and results are expected from where it ends up. It doesn’t have to be able to be proven in a court of law with a chain of financial custody and proven cause and effect. They just need it to be secretive enough so that it never sees the light of day in the court of public opinion and that Joe Citizen doesn’t get to join any dots. Capiche?
Not really — I have to ask what they’re going to do, and what the motive is. I mean, we know that mob enforcers can and do take action when everyone in town is being forced to deal with the mob. But what is some Chinese guy with $2 million who, by nature of the sting, nobody ever heard of, going to do? He has no reputation to protect, and no one knows of any “muscle” he can bring to bear. He isn’t advertising to Joe Schmoe that he’s trying to influence the American election. He’s got nothing, and absolutely nothing to gain by getting revenge, and no way to do it anyway. Had it been a more recognizable criminal enterprise, of course, the situation might be different, but then again, Titan might well never have tried to get involved with a recognizable criminal enterprise with a reputation for the same reasons anyone else would keep hands off.