A Republican senator faces serious allegations that he illegally loaned millions of dollars from his company to his campaign. But the senator in question – Republican Mike Braun of Indiana – says he cannot fully answer the government’s questions because one of his key aides has “disappeared.”
The Daily Beast found it in minutes.
On Wednesday morning, the Federal Election Commission released its audit of Braun’s campaign committee, alleging a litany of serious financial reporting errors, as well as millions of dollars in allegedly inappropriate loans that Braun used to fund his 2018 candidacy. , including $ 1.5 million embezzled from the candidate’s candidate. old business.
However, the campaign says it cannot fully comply as its former treasurer has “disappeared” and they have not been able to locate him for three years.
But the campaign does not have to be very harsh. It only took the Daily Beast a few minutes to identify and locate the man. Her mother said in a phone call that she would forward a request for comment.
The October 4 campaign response to the audit explains that the treasurer in question, Travis Kabrick, “was, at least on the surface, a seasoned FEC compliance professional who had worked for many Federal Candidate Boards for many years. years “.
However, the response adds that “at some point in the 2018 election cycle this individual started making mistakes and not delivering his services as planned (and for which he was being paid). He finally disappeared, and he could not be located since the end of 2018. “
In a hearing with FEC commissioners on Wednesday afternoon, Chris Gober, a campaign lawyer, confirmed that the campaign still hadn’t reached Kabrick, who Gober said “got up and left. and disappeared from the committee “.
And Kabrick, Gober argued, is essential. Without his cooperation, said Gober, “we have not been able to obtain all of the documents really necessary to address all of the findings.” He added that “the inability to make contact or get a response” was in fact so extreme that the campaign asked the FEC to subpoena Kabrick, although it is not clear when the request was made. , or whether the agency has taken action.
“Federal law prohibits applicants from receiving contributions from corporations. This law has been in effect for over a century in an attempt to keep politicians out of the pockets of big business.“
– Paul S. Ryan, Vice President of Policy and Litigation at Common Cause, campaign watchdog
An hour before the hearing, The Daily Beast had confirmed Kabrick’s current job in a phone call with his employer, along with his location, contact details and three social media accounts. (Twitter suspended a Account logged into Kabrick’s personal Gmail address listed on campaign registration documents, but a company spokesperson did not clarify when or why the account was restricted.
Based on the audit findings, Kabrick appears to have good reason to remain discreet. But his absence alone doesn’t seem to cover all the allegations, which include allegedly illegal loans from Braun’s former company.
Auditors found that Braun’s reports showed more than $ 8.5 million in “apparently banned loans” for his 2018 campaign. This includes $ 7 million in direct loans and lines of credit – unsecured – “which did not appear to have been made in the ordinary course of business “. The FEC also “identified two checks from a company totaling $ 1,500,000 that were reported as loans.”
These checks were from Meyer Distributing, which Braun founded and where he was CEO. Auditors say this makes corporate contributions, which are illegal. The campaign reported them in three different ways: first as “compensation” to Braun, then as redeemed shares, and finally as loans.
But this is only the beginning. The report cites a range of violations, including millions of dollars in erroneous contributions and disbursements, as well as reporting errors for almost an additional $ 2 million in donations. The audit also reported hundreds of thousands of dollars the campaign paid back to Braun, claiming those refunds exceeded the legal limit – another misstep that would seem difficult to identify on Kabrick.
The report raised eyebrows among campaign finance experts.
Paul S. Ryan, vice president of policy and litigation at Common Cause, the campaign watchdog, said the allegations covered “massive violations,” including breaking a law over 100 years old. .
“Federal law prohibits applicants from receiving corporate contributions. This law has been in place for over a century to keep politicians out of the pockets of big business, ”Ryan told The Daily Beast. The audit, he said, “shows that his campaign has likely committed massive violations of federal law by receiving more than $ 8.5 million in corporate contributions.”
Ryan explained that applicants can borrow money from financial institutions in the normal course of business and on standard loan terms. However, he said, auditors discovered more than $ 7 million in unsecured loans – without Braun providing “the collateral generally required to ensure the loans would be repaid.”
As for the $ 1.5 million from Braun’s own business, Ryan said the loan illustrates “special treatment from financial companies” that “undermines the integrity of our campaign finance laws.”
“Senator Braun and corporate lenders should be held accountable for any breach,” Ryan added.
Brendan Fischer, director of federal reform at the non-partisan Campaign Legal Center, offered a similar analysis.
“There is at least the appearance of Braun’s campaign receiving special treatment from the banks here,” Fischer said. Since this is an interim audit, he stressed, the issue is not yet decided, “but given the amount of money involved, Braun’s campaign could consider quite substantial fines. “.
The campaign denies wrongdoing. Bank loans, they say, did not necessarily require campaign collateral, in part because Braun is so wealthy and has strong relationships with lenders. The FEC, they said, should defer to the judgment of financial institutions on the matter.
The FEC’s attorney general’s office admitted that Braun was indeed wealthy – he reported a net worth at the time of between $ 35 million and $ 96 million – but rejected the excuse.
“[N]o Documentation has been provided to support the claims described in the letter, ”the FEC wrote. Therefore, “in the absence of additional documentation”, loans, lines of credit and business checks “were not from an authorized source.”
As for those checks, the Braun campaign says it was his personal proceeds from the Meyer share buybacks. But contrary to the campaign’s explanation, the company sent them directly to the campaign, not to Braun, and FEC auditors said they still had not received any documentation that would change their minds. .
The audit also found that the campaign had broken the law again when he repaid Braun in “excessive loan and interest repayments,” about half a million dollars over the limit.
The campaign has called on the FEC to drop the charge, citing a recent federal court ruling in a lawsuit brought by Sen. Ted Cruz (R-TX) against the FEC. But this case is not over – it is heading to the Supreme Court – and the attorney general’s office has rejected Braun’s request to dismiss the allegation.
The report also points out that the Braun campaign had ample opportunity to comply with the investigation, but failed to do so.
Time and time again, auditors state that “no documentation has been provided to support the [campaign’s] affirmations, ”and note that the campaign still did not correct any reporting errors it recognized, even though listeners asked them to do so.
Instead, the campaign tried to blame the elusive Kabrick, with the notable exception of loans.
For example, when the current treasurer took over the books in early 2019, he found “a number of reimbursement checks that had been prepared but not sent to donors.” The campaign also said “that there are records which the committee believe existed at one point in time”, but it “cannot confirm whether copies were kept by the former treasurer or otherwise exist”.
“The Committee has no choice but to carry out this audit with the limited documentation of the 2018 electoral cycle that it has in its possession,” they added.
Brett Kappel, campaign finance law expert at Harmon Curran, told the Daily Beast that while Kabrick could be the object of the campaign’s wrath, the FEC would likely target the campaign, not him personally.
“There is at least the appearance of Braun’s campaign receiving special treatment from the banks here.“
– Brendan Fischer, Director of Federal Reform at the Non-partisan Campaign Legal Center
“The FEC almost never takes action against former treasurers as individuals rather than in their official capacity,” Kappel said, noting that on “rare occasions” the FEC has imposed civil sanctions on a treasurer convicted of embezzlement.
“However,” he added, “a treasurer could be sued by the campaign for breach of contract and, under state law, possibly even prosecuted for theft of services.”
Although Kabrick no longer works in the campaign finance world, he brought previous experience to the Braun campaign, including a stint in 2015 as treasurer of a committee affiliated with Senator Chuck Grassley (R-IA) . And his documents didn’t get much attention from FEC analysts until he got close to Braun.
The first of these notices pointed to some of the issues discussed in the report. Kabrick’s response partially blames “the fax machine with the Senate secretary”, speculating that it “blocked” and “damaged” one of the documents. (To his credit, that explanation seems to hold up, as the documents appear to have been poorly scanned.)
Kabrick did not respond to requests for comment from the Daily Beast. The Braun campaign did not respond to requests for comment.
After The Daily Beast contacted Kabrick with phone and email requests on Wednesday afternoon, he deactivated his Facebook and LinkedIn profiles hours later.