Are members of Congress more ethical than the average Joe? Or are they less ethical? It’s kind of shocking that McCarthy— and most Republicans in the House— don’t seem that concerned about having George Santos in their midst. Does McCarthy just not see his presence as that big a deal? Does a day go by when another revelation doesn’t come out about his nefarious activities? Is this guy going to wind up being extradited to Brazil? Being charged for financial crimes here? Exposed as an agent for Russia? Lord knows what will come next.
Santos has been befriended by the neo-fascist wing of the GOP. Gaetz has taken him under his wing and so has Marjorie Traitor Greene. So far just 5 congressional Republicans— Anthony D’Esposito (NY), Nick LaLota (NY), Nick Langworthy (NY), Brandon Williams (NY) and Nancy Mace (SC)— have called on him to resign. Bizarrely, Colorado wing nut Ken Buck blamed the whole Santos mess on… the Democrats: “If the Democrats had done their research & exposed things,” he whined today, “the voters would have had more information.” UPDATE: This evening 2 more New York House Republicans, Mike Lawler and Marcus Molinaro, have called for Matt Gaetz's boyfriend to resign immediately.
This morning, Alexandra Berson and Grace Ashford reported on an unregistered fund that seems to have been raising money (illegally) for Santos from… well, we’ll see… at the very least, wealthy Republicans. The entity collecting the money called itself RedStone Strategies. The firm claimed in an e-mail to have raised $800,000 and was trying to raise another $700,000 for independent expenditures. But the FEC shows no independent expenditures for $800,000 or $700,000 or for $1,500,000 or for one red cent from RedStone Strategies. The only independent expenditure made on Santos’ behalf was by the National Right to Life Victory Fund for $3,377. No one knows where any of this money raised— and money was raised— went. The FEC, wrote Berson and Ashford, “said it had no evidence that RedStone Strategies was registered as a political group, and there do not appear to be any records documenting its donors, contributions or spending. Santos and his lawyer refused to answer questions about RedStone’s fund-raising efforts and whether Santos was involved in them. But he did have ties to a Redstone Strategies LLC, registered to an address in Merritt Island, Fla., in November 2021, as Santos was preparing his second run for Congress. The firm listed the Devolder Organization, a company owned by Santos, as one of its managing officers.” Man, that is so illegal on so many fronts.
Santos’ campaign spending has also come under question, with scores of expenses for $199.99— exactly one cent below the threshold for requiring receipts. The suspicious spending pattern served as a partial basis of a complaint that the Campaign Legal Center filed on Monday with the Federal Election Commission, accusing Mr. Santos of not only using campaign funds for personal use and misrepresenting spending but also of scheming to obscure the true source of his campaign funding.
The fundraising efforts by RedStone Strategies seem equally opaque.
…If a group raised money under false political pretense, that activity could lead federal election officials to regard it as what is commonly known as a “scam PAC”— a group that raises money without spending it on the stated political purpose, a practice that is increasingly a concern of the FEC…
Redstone Strategies LLC of Florida listed one other manager in its incorporation records: Jayson Benoit, a business partner of Mr. Santos and former colleague at Harbor City Capital, which shut down after the SEC filed a lawsuit accusing it of operating as a Ponzi scheme.
…Strategies was not the only group whose activity raised warning flags among campaign finance experts.
Rise NY is a state PAC created in December 2020 by Mr. Santos’ campaign treasurer, Nancy Marks, and his sister. A Twitter profile of the group describes its purpose as “new voter registration & education as well as raising election awareness & voter enthusiasm.” The PAC raised vast sums from donors who had otherwise maxed out donating to Santos’ campaign, as reported by Newsday. One donor contributed $150,000, according to New York State Board of Election records, well beyond the limits of $2,900 per election placed on federal campaign contributions for direct campaign activity.
There’s no doubt that this was an illegal scam PAC and that money from it went directly into Santos’ and his sister’s pockets. Is Congress going to deal with this? Not with a sleaze-ball like Kevin McCarthy in charge. Too hard for him. Instead…
This morning I was talking with Ro Khanna about the new efforts by Abigail Spanberger (D-VA) and Chip Roy (R-TX) to reignite the bill they worked on last year to ban members of Congress from trading stocks— the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act. Khanna was a co-sponsor last year and is co-sponsoring it again this year. “It’s common sense,” he said. “We need to ban stock trading by members.” I’m trying to figure out why out failed in 2022 and how it could pass in 2023. Khanna told me “many members” oppose it, but didn’t get into the dynamics about why it failed to move.
As you probably heard by now, enough people have been asking progressive icon Barbara Lee to run for the Senate, that it looks like she's getting close to jumping in! This afternoon I asked her where she stood on the Spanberger-Roy legislation. She's co-sponsoring it but doesn't sound optimistic that McCarthy will allow a vote. “Our constituents should be able to trust that their members of Congress are working for them, not their stock portfolios. I hope the TRUST in Congress Act comes to the floor soon, but given that Republicans’ very first bill was to make it easier for the wealthy to cheat on their taxes, I’m not confident they will prioritize anti-corruption legislation.”
The way Spanberger and Roy wrote the legislation, it would, if passed by the House and Senate and signed by Biden, require members, spouses and dependents to place some investment assets into a qualified blind trust. Technically, Pelosi and McCarthy endorsed the bill in the 117th Congress but neither was exactly enthusiastic about it. Pelosi seems to have made sure it was never voted on and McCarthy didn’t press the matter. There are members from the Neo-fascist right— like Scott Perry (PA) and Matt Gaetz (FL)— to progressives like Khanna, Raul Grijalva, Barbara Lee, Katie Porter, Jerry Nadler and Nikema Williams… and every ideological stripe in between.
Like Khanna and Lee, Adam Schiff is a co-sponsor of the bill. This afternoon he told me that “It's illegal for Members of Congress to knowingly trade, buy, or sell stocks based on inside information learned during the course of their jobs. And those who break the law or abuse their positions of power should be prosecuted and held to account. While Congress has no prosecutorial authority, we can remove even the appearance of a conflict by banning members from trading stocks. I’m proud to again introduce with my colleagues the Trust in Congress Act to ban Members and their families from trading individual stocks.”
I happened to hear from Mark Takano, another California co-sponsor, late today. Takano heads up the messaging operation for the Congressional Progressive Caucus so, presumably, he’s speaking for most of them as well. “We’re elected to represent our constituents,” he said, "not profiteer off of sensitive information. I’m encouraged bipartisan support for the TRUST in Congress Act— Members of Congress should not be purchasing and selling stocks while they're in office.”