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Home / World

Group backing Trump caught in funding sting

Daily Telegraph UK
25 Oct, 2016 04:00 PM6 mins to read

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In footage from a 2008 interview, Donald Trump praises Hillary Clinton

Taking to a podium in Colorado last week, Donald Trump resumed a line of attack he had long used against his opponent: "Her international donors control her every move."

Yet fundraisers supporting his bid for the White House were in the process of finalising the details of a US$2 million ($2.8m) donation from a Chinese benefactor seeking unspecified "influence" under a Trump presidency.

Under United States law it is illegal for a foreigner to make any contribution in connection with an election.

When an undercover reporter telephoned Eric Beach, the co-chairman of the Great America PAC, one of the leading "independent" groups financing campaign work for Trump, to convey his fictitious Chinese client's desire to make such a donation, his approach did not appear unwelcome.

In an initial call on October 4, the reporter explained that the benefactor wanted to donate to support Trump's campaign, "but he's not a US national".

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Beach agreed that making such a donation to the PAC could be difficult. But he did, however, have a suggestion involving a 501(c)(4) - a tax-exempt "social welfare organisation" - which he described as a "non-disclose entity" through which the client could make a contribution for a "specific purpose".

Beach's response, along with his later statements on the matter, appeared ambivalent for someone who was clearly aware of the ban on foreign nations making donations in connection with US elections.

Despite warning about the need to know the origins of the money, he was already aware that the donor was a foreigner who would naturally be banned from donating for his stated purpose.

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Political observers and campaign groups have raised concerns about 501(c)(4)s, labelling them "dark money" groups because, unlike PACs, they are not required to name donors.

A PAC with a "sister" 501(c)(4) could therefore encourage donors to give to that body. The 501(c)(4) could then contribute to the PAC, or simply spend the money on a project that the group would otherwise have funded.

That scheme was laid out to two reporters at a meeting in a New York hotel by Jesse Benton, a Republican strategist, who emailed the reporter with the subject "From Eric Beach" and the line: "Eric Beach asked me to reach out."

Benton was a senior figure at the PAC until he was convicted in May in connection with buying a senator's endorsement for Ron Paul's presidential campaign in 2012. He now described himself as a "consultant for the PAC".

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Donald Trump speaks during a campaign rally. Photo / AP
Donald Trump speaks during a campaign rally. Photo / AP

At the meeting on October 13, he said that Beach, 38, needed to maintain a "deliberate disengagement".

Benton's proposal was for the Chinese client to pay his US$2m, via the reporters' Singapore-based communications consultancy, to Benton's public affairs firm, Titan Strategies LLC, in order to mask the fact that the money was coming from abroad.

He set out the scheme in an email on October 5 in which he said he had "checked with our attorney, and there is no prohibition on what I propose", although "he is giving one final review for full legal vetting".

At the meeting a week later, he explained how he would direct the funds evenly to two 501(c)(4)s which could donate the money to the Great America PAC in their name, or spend it on activities the PAC would otherwise have funded. One of the organisations was Vision for America, which is run by Beach.

"I'll send money from my company to both," Benton said. He added: "I don't know if you ever hear journalists wring their hands about 'dark money' in politics - they're talking about 51(c)(4)s."

He told the reporters: "There's no prohibition against what we're doing, but you could argue that the letter of the law says that it is originating from a foreign source and even though it can legally go into a 501(c)(4) then it shouldn't be done."

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Discussing how the money would be spent on pro-Trump grassroots campaigning as well as television advertising, he warned: "You shouldn't put any of this on paper."

He suggested the US$2m could be billed simply as "a large retainer" for consulting work.

He then sent a US$2m invoice, for the sake of "appearances", for his services providing "analysis of the American political and business landscape".

In one of a series of telephone conversations over a two-week period, he said the work would be reports on the spending of the 501(c)(4)s and PAC.

"It would be one more way ... for your client to have an assurance that quality work's being done with his money. You know, it would give you a window into what the C4s and the super PAC are doing."

Donald Trump hugs a the American flag as he arrives to speak to a campaign rally. Photo / AP
Donald Trump hugs a the American flag as he arrives to speak to a campaign rally. Photo / AP

The fictitious Chinese benefactor's generosity would not go unrewarded should the donor require a line of communication to Trump if he became President.

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"We can have that whispered into Mr Trump's ear whenever your client feels it's appropriate," he said.

After a telephone conversation with Beach, Benton said the PAC wished to invite the reporters to a party the group was hosting in Las Vegas on October 19, the night of the final presidential debate. He passed on a briefing on the event prepared by Beach.

Benton said he would not attend because "everything that we're doing is legal by the book but there's perceptions and some grey areas". Beach also needed to be kept "deliberately ignorant" of the "exact arrangements".

At the event the PAC's co-chairman clearly understood its client's apparent request for an assurance that Mr Trump would remember his contribution.

"One thing he has to understand is, what you guys have to understand is: you can get credit, but don't overdo it with the influence," he said.

The sticking point was the highly discreet method by which the client would be donating.

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"I would just manage your expectations, say: 'you're going to get credit but your 'non-disclosed' [donation] is not disclosed. Not just for your benefit, but for everyone's benefit'."

Then Beach's ambivalence, or possibly confusion, about the proposal appeared to return. "I would never let you guys give to the PAC, to give to the C4, because that's illegal," he added. "See the C4 is technically not illegal, but it's not - it's just not the best way to go."

Lawrence Noble, general counsel at the US Federal Election Commission for 13 years and now at the Campaign Legal Centre, an advocacy group, said: "If there is evidence representatives of a super PAC were soliciting or knowingly accepting foreign national money and helping arrange for it to get into the super PAC through a 501(c)(4) organisation, then it should be investigated by the FEC and by the Department of Justice as a criminal violation."

Yesterday Benton denied any "unethical" behaviour and said he was not "an agent of Great America PAC", while Dan Backer, counsel to the PAC, said Benton "has not had a role with the PAC since May and does not speak for it". Backer added: "The conduct of the PAC and Mr Beach's conduct was appropriate, ethical and legal at all times."

Asked if Trump's campaign was aware of the scheme suggested by Benton, his spokeswoman said: "We publicly disavowed this group back in April.

"This is public via Federal Election Commission filings."

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