July 2, 2020
Nearly half a million dollars in legal fees for Vice President Mike Pence were covered by a legal expense fund in 2019, according to a public financial disclosure report released this week. The new filing states that the fund’s private donors were required to certify that they are not federal government contractors or registered lobbyists, but at least three of the donors that were revealed in the filing are executives at companies that have contracts with the federal government, and one of those companies lobbies Congress through an outside firm.
Prohibitions like this, barring donations from lobbyists and government contractors, are usually meant as a deterrent to avoid the appearance or possibility of undue influence resulting from special interests seeking contracts or other favorable treatment from the government. The donations disclosed by Pence’s fund suggest, however, that either its rules weren’t stringent enough or perhaps they weren’t enforced, opening the door for potential conflicts of interest.
The trust was created in 2018 to cover Pence’s legal expenses related to the Russia investigation, but his financial disclosure covering 2018 showed just $25 in fundraising for the trust. Pence’s latest financial disclosure, however, shows that the trust raised $495,000 in one month from just eleven individuals. $479,680 of that amount covered legal expenses for Pence charged by McGuireWoods LLP, with the rest spent on “administrative expenses” associated with the trust, before it was terminated last August.
According to a note in the filing, each donor to the trust had to certify that he or she was “not a registered lobbyist” and “not a federal government contractor,” among other things. In spite of that, an analysis by CREW found that at least three of the donors’ companies have in fact received contracts and enlisted lobbyists during the Trump administration. While the donors themselves may not be considered contractors or lobbyists according to the terms of the legal expense fund trust, the contributions seem to raise some of the same conflict of interest issues the certifications were apparently meant to avoid.
The first donor, Brian McPheely, who contributed $25,000 to the fund, is the CEO of Pratt Industries, a packaging company that has received more than $250,000 in purchase orders and contracts from the Air Force during the Trump administration. Pratt has received government contracts stretching back to 2006, and two of its largest contracts have come in the last three years, according to federal contracting data.
In addition to receiving government contracts, Pratt Industries has maintained a lobbying presence on Capitol Hill throughout the Trump administration. Just a few months after McPheely contributed to Pence’s legal expense fund, Victor Smith registered to lobby on behalf of Pratt Industries. Smith served as Pence’s Commerce Secretary when he was governor of Indiana. Smith has frequently lobbied Pence’s office in Washington, but he has not yet engaged in lobbying activity related to Pratt.
Another donor, Herbert Simon, who gave $100,000 to the fund, is a co-founder and Chairman Emeritus of Simon Property Group, where he maintains a seat on the board of directors, according to a filing submitted to Florida regulators last month. Simon Property Group has received numerous federal contracts, and Simon himself is also listed as a director of a related company, Northwestern Simon, which was awarded its first contract last September. Simon also owns the Indiana Pacers, which the Army has paid for advertising as recently as last year, according to federal contracting data.
The third donor, C. Perry Griffith Jr., who gave the fund $5,000, is the Chairman of the Board of Denison Parking Inc., a long-time government contractor with federal contracts stretching back to the late 1990s. According to contracting data, the government obligated $1.1 million in federal funds to Denison Parking last year, and the company signed a new contract with the Public Building Service in March of this year. The donor’s son currently serves as president of the company.
In addition to the questions these contributions raise about how the Pence fund enforced its own rules, the contractor donations expose a gray area in ethics rules. For most government employees, the prohibitions on gifts from government contractors would also apply to the company’s employees or agents as prohibited sources, but the relevant provisions of the Standards of Conduct do not normally apply to the Vice President. In this case, however, we do not know if employees or agents of companies with government contracts qualify as contractors themselves because we do not have a copy of the trust agreement establishing Pence’s legal expense fund.
While a separate fund, the Patriot Legal Expense Fund — which made expenditures to cover legal expenses associated with the Russia investigation — attracted significant scrutiny, this legal expense fund was quietly raising donor money to cover Pence’s legal fees related to the probe. Pence’s disclosure that he used the fund to pay for nearly half a million dollars in legal expenses makes him one of the most expensive beneficiaries of a legal expense fund related to the Mueller probe.
More than a year after Special Counsel Robert Mueller ended his investigation into the 2016 election, we are still learning about the ways private interests funded the legal defense of Trump administration officials. Pence’s disclosure makes clear that there is much left to learn.
Research Intern Tiffany Tam contributed to this report.