Key associates of the notorious dark money group the Commission on Hope, Growth and Opportunity (CHGO) may have violated federal law by making false statements to the government, obstructing an investigation and pocketing more than $1 million originally meant for broadcasting television ads, Citizens for Responsibility and Ethics in Washington (CREW) alleged today in a complaint to the United States Attorney’s Office.
During an FEC investigation sparked by CREW’s complaint that CHGO violated the law by failing to register as a political committee or report the millions of dollars it spent on television ads in 2010, the organization’s key players downplayed their involvement. A lawyer for Wayne Berman, now the national finance chairman for Sen. Marco Rubio’s presidential campaign, told the FEC’s investigators that Berman “only offered informal and infrequent fundraising advice strictly on a volunteer basis” and did no consulting work for CHGO. Former RNC executive director and current senior political strategist for the US Chamber of Commerce Scott Reed told the investigators “that he could not recall being involved in the formation of CHGO and could not recall having any contact with anyone involved with CHGO after its formation.”
CHGO’s General Counsel William Canfield, now General Counsel for the Carly for America super PAC, declared to the IRS under the penalty of perjury that CHGO spent no money related to fundraising that year, and told the FEC “that his role at CHGO was limited to legal compliance.” However, others involved in CHGO, including Michael Mihalke, the principal at the vendor that produced CHGO’s ads, painted a very different picture of Reed, Canfield and Berman’s level of involvement in the enterprise. Strikingly, Mihalke told investigators that under orders from Reed, $1.1 million dollars that had been paid to Mihalke’s group but that had not been spent was to be split between Berman, Reed and Mihalke and classified as a “fundraising commission.”
“There is no reasonable explanation for how people who claim to have such limited involvement with an organization that had no fundraising expenses could be paid more than $1 million for fundraising work,” CREW Executive Director Noah Bookbinder said. “It appears that these operatives deliberately misled the government about their role in CHGO to throw investigators off the trail of the organization’s violations of campaign finance law. If they were telling the truth about their roles to the FEC, how did they end up with all that money?”
Despite misleading testimony and missing documents, the FEC’s investigators nonetheless found that far more than half CHGO’s spending—as much as 85%—was on campaign activity and that it should have reported millions of dollars in political spending. But the three Republican FEC commissioners still said nothing could be done because the statute of limitations had run out and CHGO had gone out of business during the FEC’s lengthy investigation, preventing anyone from being held accountable for CHGO’s legal violations. Today CREW also filed a lawsuit against the FEC to force them to reopen and reexamine the case.
“It is inexcusable that no one has been punished for what even the FEC’s investigators believe to be a clear violation of the law,” Bookbinder said. “Laws only work if they are enforced; we are asking the court to remind the FEC it must do its job.”
Read the criminal complaint here.
Read the full text of the lawsuit here.