On Thursday, August 20, CNN reported a story with the headline "Steve Bannon, three others charged with fraud in border wall fundraising campaign". That case highlights the independence of the Department of Justice (DOJ) and its head, Attorney General (AG) William Barr — despite critics' claims and implications to the contrary.
CNN trumpets the fact that Bannon was "President Donald Trump's former campaign adviser" in the first sentence, logically in an attempt to link the president to the alleged fraud. And it continues, explaining that Bannon and three others were charged with "defrauding donors of hundreds of thousands of dollars as part of a fundraising campaign purportedly aimed at supporting Trump's border wall." That sentence makes the same apparent attempt with respect to the president's border security efforts, although some explanation is needed.
We Build the Wall's website is still up, and you can visit it here. According to the indictment, the original campaign was called "We the People Build the Wall", and its (purported) attempt was to raise money from donors to donate to the government for barrier construction along the southern border. It was launched by one Brian Kolfage to raise money through a crowdfunding website.
It was a success, raising $17 million in the first week. Of course, donating money to the U.S. government for a specific purpose is a questionable proposition, and that (coupled with unspecified questions about Kolfage's background) prompted a crowdfunding website to suspend the campaign in December 2018 (by which point it had raised $20 million) according to the indictment. Kolfage was warned by the crowdfunding website that unless a non-profit organization could be identified into which the funds could be transferred, they would be returned to the donors.
That was around the time that Bannon and one Andrew Badolato purportedly got involved (Kolfage and Badolato are also defendants in the indictment). Bannon and Badolato formed a 501(c)(4) non-profit, now called "We Build the Wall, Inc." to which the funds raised by the earlier organization could be transferred (IRS granted that status on July 17, 2019).
The purpose of the organization was modified to provide that the funds were intended for "the private construction of a wall along the southern border of the United States". (Emphasis added.) To convince the crowdfunding website to release the funds (again, according to the indictment), the trio agreed (among other things) that Kolfage would "take no salary" and that he would "personally not take a penny of compensation from these donations."
Prior donors had to opt-in to have their donations redirected to the new organization, so the three defendants had to "re-raise" the money that had already been collected. To do this, they purportedly made certain representations, including that "100% of funds raised" would go to wall construction "and that not a 'penny' would be used to compensate" Kolfage.
Most prior donors opted in, and additional donations were received, eventually totaling approximately $25 million. DOJ alleges that these representations were false, and that, in fact, Kolfage, Badolato, Bannon, and a fourth defendant (one Timothy Shea) received hundreds of thousands of dollars "for their personal use and benefit". Kolfage in particular allegedly eventually received more than $350,000 from a separate non-profit, a shell company, and accounts controlled by two unnamed associates.
In October, Kolfage, Badolato, and others found out from an unnamed financial institution that the feds might be investigating We Build the Wall. Changes were made to the group's website, removing the promise that Kolfage would not be compensated, and adding the fact that he would receive a salary starting in January 2020. The alleged "secret salary payments" to Kolfage stopped after that date.
DOJ charged Kolfage, Badolato, Bannon, and Shea with one count of wire fraud, and one count of conspiracy to commit money laundering. The government is seeking forfeiture of various bank accounts and real and personal property.
The indictment was signed by Acting U.S. Attorney for the Southern District of New York (SDNY) Audrey Strauss, and filed by DOJ in the U.S. District Court for the Southern District of New York.
All defendants are innocent until proven guilty — which is true in this case as in all others. DOJ convinced a grand jury that the allegations and charges are correct, but I have no idea whether they are or aren't. Only a trial (or plea) will tell.
Strauss is the acting U.S. attorney because she replaced Geoffrey Berman, whom the president fired in June, an act that ended a series of back-and-forth maneuvers — many of them politically charged.
But firing U.S. attorneys is within the executive's prerogative: Remember in May 2009 when then-AG Eric Holder stated that the president would be replacing a "batch" of them, explaining "elections matter"? Or that President Clinton's AG, Janet Reno, "asked all 93 remaining appointees to resign soon after she took office"? Probably not: old news, and doesn't fit the media narrative.
And Berman was not exactly appointed by the president to be U.S. attorney in SDNY begin with. He was appointed on an interim basis to that job by then-AG Jeff Sessions for 120 days in January 2018 (New York's senators, Chuck Schumer (D) and Kirsten Gillibrand (D), reportedly did not give approval of his pick to fill the job permanently because of his association with Rudy Giuliani). He was not nominated for the position, and when that interim term expired, the judges of the district court appointed him U.S. attorney in April of that year.
Strauss was not the first choice of the president or the AG to subsequently head the SDNY, but she "is regarded as a titan of the white-collar bar" who previously pursued, among others, the president's personal attorney, Michael Cohen. She also gave up a pretty lucrative career to return to the office, and has purportedly "donated substantially over the years to Democratic presidential candidates, including Barack Obama, Joe Biden and Hillary Clinton."
None of this is offered to suggest that Strauss is in any way biased. Quite the opposite: It shows that DOJ and its head, AG Barr, are first and foremost much, much more interested in justice and the rule of law than in politics — no matter what you may be told.
This is a politically charged prosecution, although none of the defendants are currently political officials.
Needless to say, Bannon is tightly tied in the public mind to the president. But theirs has been a tempestuous relationship (to say the least). After Bannon (who was fired by the president in August 2017) was revealed to have criticized Trump's family members, the president responded in January 2018, stating: "Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind." Such statements are likely to be forgotten, in light of the current indictment.
This case ties both Bannon and the border together — giving media outlets an opportunity to tarnish both the president and one of his key issues. But if the allegations are true, DOJ did the right thing — by the donors, the American people, and justice itself.
Here, however, is how the Washington Post played the story: "Bannon's indictment raises more uneasy questions about William Barr's SDNY gambit". That is, the Berman firing. You have to read all the way down to paragraph 13 to get the following:
There is still no firm evidence that the removal of Berman and the effort to install someone besides Strauss was explicitly tied to an effort to curtail investigations Barr didn't like. Barr denied this in Congressional testimony in July, saying it was "nonsense." He added that "anyone familiar with the Department of Justice would say that removing a component head is not going to have any effect on any pending investigation."
The Bannon/We Build the Wall indictment proves the truth of Barr's testimony better than anything could.
More logically, however, had a Trump-appointed U.S. Attorney spiked the investigation, could you imagine the uproar? Certainly, any number of prosecutors and investigators would have quit publicly, to media adulation, and congressional hearings would have followed, subpoenas issued, etc. All appropriately. That would have been hardly worth it for a man whom the president had ridiculed in public as having "lost his mind".
That logic does not appear to factor into the Washington Post's article (which purports to be "analysis", not an op-ed). I know nothing about the author, but he has apparently never worked for the government, let alone in a prosecutor's office.
And ostensibly he fails to follow the news: thousands of former DOJ employees have already called on Barr to quit for various perceived grievances. Any prosecutors who quit over such interference (as they would have done, trust me) would be lionized and soon ensconced in their own cushy practices. (I am a former DOJ employee — like Barr, on two separate stints — and I think he is just fine, by the way).
The fact is, from the indictment at least, it sure looks like it was the William Barr-led DOJ that initiated the investigation to begin with.
Again, Kolfage, Badolato, and Bannon learned that there might be a federal investigation in October 2019, and Barr became AG in February 2019. The alleged fraud started just before, in December 2018, and continued up to the filing of the indictment. The investigation of that fraud, therefore almost had to have commenced after Barr took the job, and continued throughout his (still ongoing) tenure.
Remember that the next time the AG is tarnished as an "ideologue". He is the "Attorney General of the United States", not the "Attorney General of the Trump administration". And, shady insinuations aside, he acts like it.
DOJ's motto is "Qui Pro Domina Justitia Sequitur". In Latin, it roughly translates as "Who Sues on Behalf of Our Lady Justice". The "who" in that phrase is the AG — William Barr. If the allegations in the indictment in US v. Kolfage are true, he is apparently living up to that lofty goal. Come what may.