George Santos campaigned with money raised by mystery fund

A month before George Santos was elected to the US Congress, one of his big donors got a call asking him to consider making another sizable contribution.

The request came from a Republican stalwart who spoke on behalf of RedStone Strategies, described in an email to the donor as an “independent spending” group that supported Santos’ bid to “turn over” a Democratic seat in the New York House. The group had already raised $800,000 and was trying to raise another $700,000, according to the email analyzed by The New York Times.

The donor appeared days later: on Oct. 21, he sent $25,000 to a RedStone Strategies account at Wells Fargo Bank.

Three months later, Santos is now in Congress, but it was not clear where the donor money went. The Federal Election Commission (FEC) said it has no evidence that RedStone Strategies is registered as a political group, and there does not appear to be any records documenting its donors, contributions or expenditures.

Santos and his attorney declined to answer questions about RedStone’s fundraising efforts and whether Santos was involved in them. But he had ties to the group, registered at an address on Merritt Island, Florida, in November 2021, when Santos was preparing his second candidacy for Congress. The company listed the Devolder Organization, Santos’ company, as one of its directors.

A company website describes that RedStone is run by “marketing and other policy experts” whose ad-creation, communications, and fundraising services are valuable, “whether you’re in a local race or you’re going to be the next president. from United States”.

However, the company’s body of work — at least for candidates and committees, who are required to report campaign expenses — appears limited. A Times search of campaign finance records revealed payments from a defeated Long Island House candidate and two groups linked to New York legislative candidates.

It also shows a payout to a PAC (Political Action Committee) called Rise NY, run by Santos’ sister Tiffany. State records show the group sent a $6,000 wire transfer in April 2022 to RedStone Strategies. He cited a Wells Fargo Bank branch on Merritt Island as his address.

The obscurity surrounding fundraising operations on behalf of Santos makes it difficult to know whether any laws have been broken. But close scrutiny of available records suggests that RedStone may have dodged the law.

The email to the donor described it as an “independent spending committee under federal campaign finance law” with the “single purpose” of electing Santos.

These groups, also known as super PACs, can support candidates by raising large sums of money far beyond the strict limits of campaign donors. Even so, there are rules: They must register with the Federal Election Commission and disclose their donors. And they cannot directly coordinate campaigns.

However, the FEC has no record of RedStone’s strategies. The Daily Beast reported that Florida’s Redstone Strategies LLC had a connection to Santos, but the existence of a group operating under the RedStone name raising large sums of money for his election has not previously been disclosed.

“I don’t see a record of a committee with that name registered with the FEC, and our regulations would be that if a political group raises more than $1,000 for the purpose of influencing a federal election it would be required to register with the FEC within ten days. “, said Christian Hilland, spokesperson for the body.

The person who contacted the donor said Santos approached her before the campaign asking her to approach donors, some of whom had already given the maximum allowed to Santos’ campaign, and to help coordinate their donations to RedStone, according to another person. familiar with the arrangement, who prefers to remain anonymous.

A lawyer for Santos declined to answer the Times’ questions about RedStone, saying “it would be inappropriate to respond to anything related to this apparent investigation of the client’s campaign finances.”

Santos’ finances are under scrutiny after the Times reported last month that his run for Congress in New York was built on lies, including fake real estate fortunes, academic distinction and a supposedly brilliant career on Wall Street.

According to the financial statements he filed as a candidate, Santos said he went from earning $55,000 a year to running a company worth more than $1 million in just a few years. That allowed him to lend his campaign more than $700,000 — slightly less than the amount RedStone Strategies claimed to have raised.

Santos’ campaign spending was also called into question, with dozens of expenditures running at $199.99 – one cent short of the threshold that would require showing receipts. The suspicious spending pattern served as a partial basis for a complaint that the Campaign Law Center filed Monday with the Federal Election Commission, accusing Santos not only of embezzling campaign funds for personal use and misrepresenting spending, but also of scheming to conceal the true source of your campaign finance.

RedStone Strategies’ fundraising efforts seem similarly opaque. The person requesting the $25,000 donation to RedStone has been active in the Queens Republican Party and describes himself as a friend of Santos. The donor, who declined to be named, confirmed he was told by the agent that the sum would be used as part of a large ad buy for Santos.

But the donor said he did not know how the funds were spent. A review of company AdImpact spending does not show any advertising purchases by the group on behalf of Santos, nor spending for Santos from other independent groups in the months leading up to the election.

If a group were to raise money under a false political pretense, that activity could lead federal election authorities to deem it a so-called “fraudulent PAC” – a group that raises money without spending it on its stated political purpose, a practice that is increasingly of concern to the FEC. , Hillland said.

Santos finally acknowledged having misled voters about his educational and professional history, saying his sins were “gilding” his resume and nothing more. He was sworn in last weekend despite fellow congressmen calling for ethical investigations into his behavior and Republican leaders in New York, including four first-term congressmen, calling for his resignation. Prosecutors at the local, state and federal levels have indicated they are keeping an eye on Santos.

Another potential area of ​​concern about RedStone Strategies was the way it was described in its donor solicitation email as a “501c4” – a type of group created to promote social welfare. These entities do not pay federal taxes and may be involved in politics as long as their primary purpose is not to elect candidates to public office.

“They can spend up to 49.9% of their budget on candidate election work,” explained Paul S. Ryan, an expert on federal election law, adding that political spending is permissible as long as it is not the group’s primary objective.

RedStone Strategies wasn’t the only group whose activity set off red flags among campaign finance experts. Rise NY is a statewide PAC created in December 2020 by Santos campaign treasurer Nancy Marks and Tiffany Santos. A Twitter profile for the group describes its goal as “voter registration and education, as well as increasing voter awareness and voter enthusiasm.”

The PAC raised large sums from donors who had otherwise maxed out donations for Santos’ campaign, as reported by Newsday. One donor contributed $150,000, according to New York State Board of Elections records, far in excess of the $2,900 per election limit imposed on contributions to direct federal campaign activities.

Posts on social media show that Rise NY has organized rallies and voter registration events on Long Island. In an August 2021 Twitter post, Rise NY stated that it “attracted over 7,800 new Republican voters in Long Island alone”.

A close scrutiny of the group’s spending, however, reveals that many of Rise NY’s actions would be considered unusual, if not infringing. Under New York State law, PACs like Rise NY can donate directly to authorized candidates or committees, but cannot spend in other ways to help a campaign.

Still, Rise NY issued salary and professional services payments to Santos campaign staff, including his press secretary. It also earmarked $10,000 in payments to a company run by Marks, the campaign treasurer. And Tiffany Santos earned $20,000 for her work as president of the PAC. She did not respond to a request for comment.

His spending took place at many of the venues that George Santos’ campaign records show he likes to frequent, including Il Bacco restaurant in Queens, where his campaign spent about $14,000, and an Exxon Mobil gas station that is a two-minute drive from her former apartment in Whitestone, Queens.