Federal agents arrested Steve Bannon, President Trump’s former political strategist, on Thursday, charging him and three other Trump backers with fraud over their efforts to raise money to build a private border wall.
We Build the Wall collected more than $25 million from donors in an online crowdfunding campaign, promising that none of the money would go to Brian Kolfage, the leader of the effort.
In reality, federal prosecutors in New York say, Mr. Bannon, Mr. Kolfage and two others were part of a scheme to siphon off hundreds of thousands of dollars, using the money to pay off credit card balances, get plastic surgery and finance a boat.
“While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,” said Audrey Strauss, acting U.S. attorney for the Southern District of New York.
According to a grand jury indictment, Mr. Kolfage collected more than $350,000 and Mr. Bannon, through a nonprofit group, siphoned off more than $1 million, some of which he then used to pay Mr. Kolfage and the rest he used to cover his own personal expenses.
Prosecutors charge that both men, along with Andrew Badolato and Timothy Shea, created fake invoices and “sham” vendor agreements to hide the transfers.
Mr. Trump said he feels “very badly” about the arrest of his former top political aide but made clear he has been at arm’s length from Mr. Bannon.
“I haven’t been dealing with him for a long period of time, as most of the people in this room know,” Mr. Trump said during an Oval Office meeting with the Iraqi prime minister.
Mr. Bannon was a key part of Mr. Trump’s 2016 campaign. He moved to the White House for about seven months before his ouster in a summer 2017 housecleaning.
Mr. Trump also made clear Thursday that he was not a fan of the private-wall effort. He has been consistent on that theme for weeks, saying he thought We Build the Wall was trying to show him up by building faster and much cheaper.
“I said, ’This is for government. This isn’t for private people.’ And it sounded to me like showboating,” Mr. Trump said.
Official Trump border wall construction will hit 300 miles this month, according to the Army Corps of Engineers.
The president’s critics insisted that the private group’s charges reflect back on Mr. Trump, whose political rallies frequently devolve into chants of “Build the wall.”
“In one fell swoop, this story embodies Trumpism: corruption and mendacity; racism and xenophobia; self-dealing and authoritarianism; undermining the rule of law while claiming to uphold the rule of law; using fear of ’the non-white other’ to benefit insiders and elites,” said Frank Sharry, executive director of America’s Voice, an immigrant rights advocacy group.
He said the arrests expose may signal that “the house of cards built by Trump and his fellow gangsters may be tumbling down.”
We Build the Wall launched in late 2018 with a stated goal of raising $1 billion, which it said would be donated to the federal government to make up for money Congress was refusing to allocate.
GoFundMe, the website hosting the effort, warned that the plans to donate to the government were sketchy and demanded that Mr. Kolfage come up with a more concrete scheme to use the money, so Mr. Kolfage partnered with Mr. Bannon and his nonprofit group, the indictment says. They also changed their promise, saying the nonprofit group would build the wall.
“I made a promise that I would NEVER take a penny,” Mr. Kolfage, a disabled veteran, wrote in one social media post.
In reality, days after the launch of the project, Mr. Kolfage made a “secret agreement” to be paid, the indictment charges. Mr. Kolfage got lump-sum payments and a monthly $20,000 salary, prosecutors say.
He used the money for home renovations, to buy an SUV and jewelry, to finance a boat and to pay for plastic surgery, prosecutors said. The others used their money for travel, hotels and credit card debts.
After learning they were being investigated, the team changed its website to cut out the promise that 100% of money would go to the wall project.
“This case should serve as a warning to other fraudsters that no one is above the law, not even a disabled war veteran or a millionaire political strategist,” said U.S. Postal Inspection Service Inspector-In-Charge Philip R. Bartlett.
The USPIS was involved in the investigation, according to the government’s statement announcing the charges.
We Build the Wall did build a half mile of wall last year just west of El Paso, Texas. That project sparked a brief international incident when the border boundary commission said it wasn’t alerted.
A second stretch of wall completed this year in Texas is already being undermined by erosion, according to The Texas Tribune.
We Build the Wall partnered on construction with Tommy Fisher and his firm, Fisher Sand & Gravel. The company has since won hundreds of millions of dollars in contracts to build Mr. Trump’s official wall.
It’s also now facing an investigation from the Pentagon’s inspector general because the price tag for some of the segments of wall seemed too high to top members of Congress.
House Homeland Security Committee Chair Bennie G. Thompson, Mississippi Democrat, said Thursday that the charges against Mr. Bannon and the others reinforce those worries.
“There is simply not enough oversight of these types of construction projects on private land,” he said.
Mr. Bannon and the three others are charged with conspiracy to commit fraud and conspiracy to commit money laundering, both of which carry a penalty of up to 20 years in prison.
We Build the Wall’s advisory board was stocked with big names from conservative and immigration circles.
Kris Kobach, former Kansas secretary of state, is listed as the general counsel, and board members included retired Rep. Tom Tancredo, retired Milwaukee Sheriff David Clarke Jr. and former baseball player Curt Schilling.
No charges have been announced against any of them.
• Gabriella Muñoz contributed to this report.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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