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Trump inaugural fund and super PAC said to be scrutinized for illegal foreign donations

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US federal prosecutors are examining whether foreigners illegally funneled donations to President Donald Trump's inaugural committee and a pro-Trump super PAC in hopes of buying influence over US policy, according to people familiar with the inquiry.

[WASHINGTON] US federal prosecutors are examining whether foreigners illegally funneled donations to President Donald Trump's inaugural committee and a pro-Trump super PAC in hopes of buying influence over US policy, according to people familiar with the inquiry.

The inquiry focuses on whether people from Middle Eastern nations - including Qatar, Saudi Arabia and the United Arab Emirates - used straw donors to disguise their donations to the two funds. Federal law prohibits foreign contributions to federal campaigns, political action committees and inaugural funds.

The line of questioning underscores the growing scope of criminal inquiries that pose a threat to Trump's presidency. The special counsel, Robert Mueller, is focusing on whether anyone in the Trump campaign conspired with Russia to tip the 2016 presidential election in Mr Trump's favor, while prosecutors in New York are pursuing evidence he secretly authorized illegal payments of hush money to silence accusations of extramarital affairs that threatened his campaign.

The inquiry into potential foreign donations to the inaugural fund and the super PAC is yet another front being pursued by multiple teams of prosecutors. Thomas Barrack, a billionaire financier and one of Trump's closest friends, raised money for both funds.

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"Tom has never talked with any foreign individual or entity for the purposes of raising money for or obtaining donations related to either the campaign, the inauguration or any such political activity," said Owen Blicksilver, a spokesman for Mr Barrack. The inaugural committee focus was reported earlier Thursday by The Wall Street Journal.

The super PAC, Rebuilding America Now, was formed in the summer of 2016 when Mr Trump's presidential campaign was short of cash and out of favour with many major Republican donors. While Mr Trump insisted that he could finance his own campaign, he refused to dig too deeply into his own pockets.

According to several of the people familiar with the investigation, Paul Manafort, who then headed the campaign, suggested that Mr Barrack step into the void by creating and raising funds for the political action committee, which could raise unlimited amounts of money as long as it avoided coordinating closely with the candidate.

In an interview with investigators a year ago, Mr Barrack said that Manafort seemed to view the political committee as an arm of the campaign, despite laws meant to prevent such coordination, according to a person familiar with the interview.

Federal election law requires a cooling-off period of at least 120 days before campaign staff members join a political committee backing the same candidate, but Manafort dispatched two friends from the campaign, Laurance Gay and Ken McKay, to run the operation. A press officer said at the time that the committee violated no rules because the campaign never paid the two men. Neither man returned repeated phone calls seeking comment.

According to filings with the Federal Election Commission, the committee raised US$23 million, making it one of the most important sources of funds for advertisements, polls and other political expenditures on Mr Trump's behalf. Most money came from several big donors, including from Linda McMahon, a professional wrestling executive who donated US$6 million and was later appointed by Trump to head the Small Business Administration.

Prosecutors from New York and from Mr Mueller's team have asked witnesses whether anyone from Qatar or other Middle Eastern countries also contributed money, perhaps using US intermediaries. Among other issues, they asked about a Mediterranean cruise that Mr Barrack and Manafort took after Manafort was fired in August 2016 from the Trump campaign because of a scandal over his previous work for pro-Russian politicians in Ukraine. Manafort was in serious financial trouble at the time, and Mr Barrack, who has an extensive business network in the Persian Gulf, may have been attempting to help him find clients.

On the cruise, the pair met one of the world's richest men, Hamad bin Jassem bin Jabr Al Thani, the former prime minister of Qatar. Until 2013, Al Thani presided over the country's US$230 billion sovereign wealth fund. He remains a highly influential member of the nation's governing royal family.

Investigators also sought information from a businessman, Rashid Al Malik, an associate of Mr Barrack's who heads a private investment firm in the United Arab Emirates, according to a person familiar with the inquiry. Mr Malik, whose lawyer did not immediately respond to a request for comment, has been described as close to a key figure in the UAE's government.

After Mr Trump was elected, any troubles he had finding donors appeared to have vanished. His inaugural fund raised US$107 million - four times as much as the pro-Trump political action committee and twice as much as the amount raised for President Barack Obama's first inauguration. Mr Barrack was its chairman, and Rick Gates, a longtime business associate of Manafort's who served as deputy campaign chairman, ran it.

The inquiry into the inaugural fund appears to involve prosecutors from US attorney's offices in Manhattan and Brooklyn, people familiar with the investigation said. The fund has long been a source of infighting among White House advisers and personal friends of Trump's, who blamed one another for news reports about questionable expenditures.

The prosecutors in Manhattan were apparently following up on leads from their case against Michael Cohen, the president's former longtime fixer. Cohen was sentenced on Wednesday to three years in prison, in part for organizing payments to cover up sex scandals that could have threatened Trump's chances of winning the White House.

NYTIMES