Steve Bannon pleads not guilty to fraud after
arrest on luxury yacht
Trump’s ex-adviser was arrested on Thursday for
allegedly defrauding donors to ‘We Build the Wall’ campaign
Victoria
Bekiempis
Thu 20 Aug
2020 21.58 BSTFirst published on Thu 20 Aug 2020 14.57 BST
Former
Trump campaign manager Steve Bannon pleaded not guilty on Thursday hours after
being arrested on a luxury yacht for allegedly skimming donations from an
online fundraising campaign for the president’s controversial border wall with
Mexico.
Using a
non-profit organization that he controlled, Bannon “received over $1m from the
‘We Build the Wall’ online campaign, at least some of which he used to cover
hundreds of thousands of dollars in [his] personal expenses”, federal prosecutors
in New York allege.
Wearing a
white face mask, and looking sunburnt, Bannon appeared briefly in a federal
court in downtown Manhattan just after 4pm ET, and his lawyer entered a not
guilty plea.
Bannon was
arrested at about 7.15am ET on a yacht off the coast of Connecticut, it was
said in court, and he was brought to New York city several hours later.
Bannon will
now be released on a $5m bond, backed by $1.75m in cash or real estate. He has
until 3 September to get this collateral together, and is expected to leave the
courthouse later Thursday, with photographers and reporters waiting to greet
him.
The judge
also said one bail condition was that Bannon would have “no use of private
planes or private yachts or boats”, which follows reports he was arrested on
the yacht of a Chinese businessman, who the New York Times reported was Guo
Wengui.
The court
appearance follows the announcement of the charges earlier on Thursday.
Three other
men, Brian Kolfage, Andrew Badolato and Timothy Shea, were also arrested in
this alleged scheme to defraud the non-profit, which authorities said raised
more than $25m.
The
charges, made by the Department of Justice’s southern district of New York
(SDNY), were contained in an indictment unsealed in Manhattan federal court.
Federal
prosecutors alleged that Bannon and three others “orchestrated a scheme to
defraud hundreds of thousands of donors”.
According
to the indictment, promises were made that 100% of the donated money would be
used for the project.
But it
alleged they faked invoices and sham “vendor” arrangements, among other ways,
to hide what was really happening.
The men are
facing one count each of conspiracy to commit wire fraud, and one count of
conspiracy to commit money laundering. Each count has a maximum prison sentence
of 20 years.
Bannon was
chief executive officer of Trump’s election campaign in its final months in
2016 and later served as the president’s chief strategist for seven months
during the turbulent early phase of the administration. He was fired as a top
adviser to the president in the summer of 2017, though recently Trump is said
to have been talking about him positively.
After the
indictment was unsealed, the White House press secretary, Kayleigh McEnany,
distanced the president from the scheme, saying he had “not been involved” with
Bannon since the campaign and the early part of the administration, and he did
not know the other people.
She said:
“As everyone knows, President Trump has no involvement in this project and felt
it was only being done in order to showboat, and perhaps raise funds. President
Trump has previously and publicly stated the following: ‘I disagreed with doing
this very small (tiny) section of wall, in a tricky area, by a private group
which raised money by ads. It was only done to make me look bad, and perhaps it
now doesn’t even work.’”
It has been
previously reported by the New York Times that the president had given the
private project his blessing.
Latest
Trump associate to face prosecution
The arrests
make Bannon the latest addition to a startlingly long list of Trump associates
who have been prosecuted, including his former campaign chair Paul Manafort,
his longtime lawyer Michael Cohen and his former national security adviser
Michael Flynn.
Trump has
also made clear that he is willing to use his near-limitless pardon power to
help political allies escape legal jeopardy, most recently commuting the
sentence of his longtime political adviser Roger Stone.
The
attorney general, William Barr, told the Associated Press he had been made
aware of the investigation into Bannon months ago but did not say whether Trump
had been informed.
In a
statement, acting US attorney Audrey Strauss said that the fund capitalized on
donors’ interest in building a border wall while instead funneling millions of
dollars to fund the “lavish lifestyle” of We Build the Wall founder and public
face Brian Kolfage.
Philip
Bartlett, inspector in charge of the US Postal Inspection Service’s (USPIS) New
York field office, which was a partner on this investigation, said: “As
alleged, not only did they lie to donors, they schemed to hide their
misappropriation of funds by creating sham invoices and accounts to launder
donations and cover up their crimes, showing no regard for the law or the
truth.”
The We
Build the Wall campaign started in 2018 as a GoFundMe by Kolfage, a military
veteran, who has described some people crossing the southern border without
documents as terrorists and drug traffickers and accused border wall critics as
being cartel collaborators. The campaign created a video posted on YouTube of
construction of metal barricades to attract anti-immigrant donors to the
campaign.
After
Kolfage brought Bannon and Badolato into the fundraising campaign,
“within
days”, the pair gained “significant control” of this fundraiser, such as its
messaging, donor outreach and finances, according to the indictment.
By spring
2019, the group had raised $22m out of its $1bn goal.
In a secret
deal with the others, Kolfage, it was alleged, “covertly took for his personal
use more than $350,000 in funds that donors had given to We Build the Wall”. To
hide this, the men “devised a scheme” to direct money siphoned from We Build
the Wall to Kolfage through a non-profit and a shell company that Shea
controlled, using bogus invoices and “sham” vendor agreements.
Kolfage
used the money for expenses, such as “home renovations, payments toward a boat,
a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and
credit card debt”. The other men each siphoned “hundreds of thousands” in
donations, it was said, which they used on personal expenses such as “travel,
hotels, consumer goods and personal credit card debts”.
When the
men realized that they might be under federal investigation in October 2019,
they tried hiding their scheme, using encrypted messaging apps.
Last year,
the campaign was seen by the Guardian building a private border wall in south
Texas despite a court injunction that ordered the work to be suspended.
“No one is
above the law, not even a disabled war veteran or a millionaire political
strategist,” said Bartlett, of USPIS.
Trump’s
promise to build a wall across the 2,000-mile length of the US border with Mexico
was a central part of his campaign to be president and supporters regularly
chant “build the wall” at his rallies. Despite fierce opposition in Congress
from Democrats, the Trump administration has pledged to erect or replace 450 to
500 miles by the end of 2020, at a cost of almost $18.5bn. While meeting this
target is in doubt, construction of the wall has continued in some areas
despite the coronavirus pandemic.
The White
House said on Thursday 300 miles of border wall had been built, adding: “Our
southern border is more secure than it has ever been.”
The
Associated Press contributed reporting
Sunburned Steve Bannon's court appearance is
subdued – until the last moment
Sketch: Trump’s former campaign chief thrives on
controversy but his virtual hearing was off brand
Victoria
Bekiempis
Fri 21 Aug
2020 01.54 BSTLast modified on Fri 21 Aug 2020 06.06 BST
https://www.theguardian.com/us-news/2020/aug/20/steve-bannon-court-new-york-fraud
Steve
Bannon, Trump’s former campaign chief, appeared in Manhattan federal court via
video on Thursday afternoon after his arrest for allegedly siphoning money from
a fundraising campaign to build the president’s controversial border wall with
Mexico.
Bannon
waived his right to appear in person for his initial court appearance, in
keeping with Covid-19-prompted safety measures at the courthouse. As a result,
press attending Bannon’s arraignment watched him on a giant screen, in the jury
assembly room, while seated 6ft apart in red leather chairs.
The
Manhattan US attorney’s office alleges that Bannon “received over $1m from the
‘We Build the Wall’ online campaign, at least some of which he used to cover
hundreds of thousands of dollars in [his] personal expenses”, through a
non-profit he controlled.
Bannon, who
was elsewhere in the courthouse, was visible from his torso up; he donned a
light button-down shirt with thin vertical stripes and a white face mask.
Bannon,
known for his unkempt dress sense, did not appear particularly more disheveled
than in the past; his hair was mussed up and stringy, and his shirt was
rumpled. His face appeared sunburnt, which would make sense, given that he was
arrested on an 150ft yacht off Connecticut’s coast at 7.15am on Thursday
morning.
Appearing
on the video panel next to Bannon was the magistrate judge Stewart Aaron, who
led the proceedings from a courtroom elsewhere in the building. Bannon rocked
back and forth and kept his eyes on the camera. On several occasions, he leaned
in so closely that his face took up much of the frame.
Aaron asked
the defendant a string of questions.
“Mr Bannon,
are you able to hear me OK?”
“Uh, yes, I
can,” Bannon replied. He used “your honor” when responding to the judge’s
subsequent questions. One of Bannon’s attorneys entered a plea of not guilty
for him.
The
proceeding was brief and calm, off-brand for a man who has built his career on
controversy. There was no bail fight. In fact, prosecutors and defense
attorneys had agreed to a bail package prior to his arraignment: a $5m bond,
backed by $1.75m in cash or real estate. Bannon has about two weeks to come up
with this collateral. He is not permitted to travel on private planes, boats or
yachts while out on bail, the judge said.
The drama
intensified outside, however, about two hours after Bannon’s proceeding ended.
Before fully exiting the building, Bannon pulled off his mask, flicking his
hair to the side. Sporting a round smile, he waved to the dozens of journalists
who were waiting to see him leave.
As Bannon
walked to a black SUV that awaited him, he lifted his hand, index finger
pointed outward, and addressed the crowd.
“This entire
fiasco is to stop people who want to build the wall,” Bannon said, before
getting into the SUV.
The spectacular fall of a center-of-power
populist
In a few short years, Steve Bannon went from being an
architect of Donald Trump’s political success to being busted by the feds.
Steve Bannon received much of the credit for
then-candidate Donald Trump’s upset win in 2016 and went on to serve as Trump’s
chief strategist in the White House.
By BEN
SCHRECKINGER
08/20/2020
07:22 PM EDT
https://www.politico.com/news/2020/08/20/fall-of-steve-bannon-399652
In just a
few short years, Steve Bannon went from being the most dangerous man in
American politics to being in federal custody.
The onetime
champion of America’s forgotten man and an architect of Donald Trump’s 2016
campaign, Bannon was arrested Thursday morning, reportedly aboard a Chinese
billionaire’s yacht.
His
indictment — on charges involving an alleged internet fundraising scam for
helping build Trump’s southern border wall — marks an era that has catapulted a
series of unlikely figures to the highest reaches of politics, only to see them
suffer spectacular falls.
In Bannon’s
case, an itinerant entrepreneur with a mixed record in media and finance
charged into the center of a turbulent presidential campaign and emerged as the
White House chief strategist. Later, he was even rumored to be eyeing his own
presidential run.
Instead, he
has followed others from the president’s inner circle into serious legal
jeopardy. The 2016 campaign chairman Paul Manafort and his deputy, Rick Gates;
Trump’s first national security adviser, Michael Flynn; his longtime political
mentor Roger Stone; and his former personal attorney and fixer Michael Cohen —
all have been convicted of federal crimes since Trump took office.
“My first
reaction when I heard the news was that this was inevitable,” said Kurt
Bardella, who worked under Bannon as a spokesman for the far-right Breitbart
News. “For someone who traffics in greed and divisiveness and is part of a
group of people who just have no regard for the law, this is the predictable
outcome.”
A
spokeswoman for Bannon, Alexandra Preate, did not respond to requests for
comment.
A
self-described propagandist, Bannon has cited the German filmmaker and Nazi
sympathizer Leni Riefenstahl as an inspiration, and has generally portrayed
himself as a revolutionary. “I’m a Leninist,” he reportedly told a new
acquaintance at a party in 2013. “I want to bring everything crashing down and
destroy all of today’s establishment.”
BY JOSH
GERSTEIN, BEN SCHRECKINGER AND KYLE CHENEY
Bannon’s
devil-may-care attitude may have brought about his own destruction instead.
“For Steve
Bannon and his ilk across the ideological spectrum, politics is just another
game to be exploited for maximum profit,” said Carlos Curbelo, a former
Republican congressman from South Florida who ran afoul of Breitbart for his
support of immigration reform. “In their dark world, dividing societies and
destroying institutions are simply means to personal enrichment. For now, this
appears to have caught up with him.”
Bannon
first gained notoriety in Washington as Breitbart’s chairman during President
Barack Obama’s second term, making the far-right populist site a thorn in the
side of the Republican Party’s establishment leaders.
“Leadership
are all c***s,” he wrote in one leaked email to a Breitbart staffer. “Let the
grassroots turn on the hate because that’s the ONLY thing that will make them
do their duty.”
Bannon
famously described the site as “the platform of the alt-right,” later backing
away from that characterization.
Under the
patronage of the hedge fund tycoon Robert Mercer and his daughter Rebekah,
Bannon carved out a prominent place among conservative activists and worked for
the Mercer-backed Cambridge Analytica. The controversial political data firm
marketed its ability to compile “psychographic profiles” of voters to better
micro-target messages. Rival firms panned its offering as snake oil.
But in August
2016, the megadonor father and daughter oversaw Bannon’s installation as chief
executive of Trump’s campaign.
He
appropriated Hillary Clinton’s “basket of deplorables” description of Trump
supporters as a badge of honor and referred affectionately to Trump’s base as
“hobbits.”
He received
much of the credit for Trump’s upset win and went on to serve as Trump’s chief
strategist in the White House, where he inserted himself into the deliberations
of the National Security Council. He battled more moderate elements in the
administration — he called them “globalists” — to push for the most extreme
version of Trump’s populist agenda, which critics condemned as xenophobic,
racist and fascist.
Publicly,
he dubbed the news media “the opposition party,” while cultivating reporters
and leaking furiously against his rivals behind the scenes.
In
championing initiatives like Trump’s failed Muslim ban, he came to be viewed as
a powerful, frightening figure.
“Saturday
Night Live“ portrayed him as the Grim Reaper in the Oval Office, and a Time
magazine cover labeled him “The Great Manipulator,” implying that he was the
real power behind Trump’s throne.
Bannon
embraced the image. “Darkness is good,” he told the Hollywood Reporter. “Dick
Cheney. Darth Vader. Satan. That’s power.”
In
buttoned-down Washington, Bannon stood out for his shambolic personal appearance
— his trademark look was to sport multiple collared shirts at once — and
unorthodox personal life. After he vacated one residence in Florida in 2015, a
landlord complained that the bathtub seemed have been disfigured by acid.
During the heat of the 2016 campaign, he registered to vote from the Florida
address of a friend with whom he also shared a checkered record of small-time
business ventures. The friend, Andy Badolato, was indicted along with Bannon on
Thursday.
Bannon’s
high profile irked Trump, as did the chief strategist’s constant jousting with
the president’s daughter Ivanka and her husband, Jared Kushner. Bannon lasted
seven months in the White House before returning to Breitbart in the summer of
2017. He left days after encouraging Trump to embrace participants in a white
nationalist rally in Charlottesville, Va., that had turned deadly.
Traders on
Wall Street cheered the news of his firing — Bannon had been a vocal critic of
trade and a proponent of populist economics — and markets rallied in response.
Outside the
White House, he continued to position himself as the leader of a populist
movement, and at one point rumors swirled in Washington that he was considering
a 2020 primary challenge to Trump. But his movement-building flailed,
especially his backing of the Republican Senate nominee Roy Moore, who lost his
Alabama race in December 2017 after allegations emerged that he had sexually
pursued underage girls in his 30s.
Unlike
other members of the president’s inner circle, Bannon emerged mostly unscathed
from investigations of connections between Trump and Russia. His habit of
leaking to the news media would catch up with him instead.
Bannon
served as a key source for Michael Wolff’s sensational 2018 book, “Fire and
Fury,” which painted a damning — and in some cases exaggerated — picture of the
dysfunction inside the West Wing.
The book
quoted Bannon trashing the president and his family. Trump disavowed Bannon,
who lost the backing of the Mercers and left Breitbart for good.
Undeterred,
he attempted to knit together right-wing populist parties around the world into
an international coalition and sought to kindle a new Cold War with China.
Unlike
other high-ranking Trump lieutenants who went down for crimes closely related
to their boss, Bannon has gotten into more trouble the farther he has drifted
from the president’s inner circle.
After
losing the support of the Mercers, Bannon’s agitation against Beijing led him
to a new sponsor: the mysterious Chinese billionaire Guo Wengui. Guo portrays
himself as a dissident bent on exposing corruption in China’s ruling party, but
his exact motives remain a matter of debate. Last month, The Wall Street
Journal reported that the FBI was investigating Guo’s funding and his
relationship with Bannon.
In a
statement, Guo’s lawyer, Daniel Podhaskie, said the fugitive billionaire stood
by his American partner, calling Bannon “a strong ally in fighting for freedom
and democracy in China.”
It was on
Guo’s yacht, on Long Island Sound off Connecticut, that federal agents
reportedly caught up with Bannon on Thursday morning. In the afternoon, after
Bannon pleaded not guilty in a virtual hearing in U.S. District Court in New
York, a federal judge made it a condition of his release on $5 million bail
that he not board any more private jets or boats without the government’s
permission.
As Bannon
sought to continue channeling pro-Trump populist energy without the president’s
backing, he attached himself in late 2018 to the crowd-funded border wall
project that ultimately led to his indictment.
As soon as
the wall project launched, critics charged that it was a scam designed to make
money off gullible immigration opponents.
Normally,
the involvement of a former White House chief strategist would dispel concerns
of fraud, but federal prosecutors arrived at the same conclusion as Bannon’s critics:
that in the Trump era, political prominence does not preclude criminal
mischief.
“There seem
to be a number of people grifting on the president’s name and positions right
now,” said Michael Steel, who served as a longtime press aide to former Republican
House Speaker John Boehner, a frequent target of Breitbart’s wrath. “If he
continues to lag in the polls, the grifts will get more and more desperate over
the next few months, as they try to cash in before the party is over.”
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