Herman Cain’s two top campaign aides ran a private Wisconsin-based corporation that helped the GOP presidential candidate get his fledgling campaign off the ground by originally footing the bill for tens of thousands of dollars in expenses for such items as iPads, chartered flights and travel to Iowa and Las Vegas – something that might breach federal tax and campaign law, according to sources and documents.
Internal financial records obtained by No Quarter show that Prosperity USA said it was owed about $40,000 by the Cain campaign for a variety of items in February and March. Cain began taking donations for his presidential bid on Jan. 1. [...]
It is not known if Cain’s election fund eventually paid back Prosperity USA, which now appears defunct. The candidate’s federal election filings make no mention of the debt, and the figures in the documents don’t match payments made by the candidate’s campaign.
Although the Supreme Court’s egregious Citizens United decision gave corporations an almost unchecked license to attempt to buy elections, the decision deals with so-called “independent expenditures” where a corporation funds a third party that supports or opposes a candidate for office. Direct contributions from a corporation to a candidate’s campaign are one of the few things that still remain illegal after Citizens United. Accordingly, if Prosperity USA effectively donated money to the Cain campaign by fronting money to them and agreeing not to be paid back, that is a violation of federal election law.
Indeed, the alleged Cain/Prosperity USA arrangement violates the law even if Team Cain does eventually pay the money back. Federal law defines a campaign contribution as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.” Although there are exceptions to this rule for banks and other businesses that ordinary provide loans, those exceptions do not apply here.
This is not the first time that Cain’s cancerman Mark Block found himself caught in a campaign finance scandal. Block — who previously led the Wisconsin chapter of the Koch-funded Tea Party group Americans For Prosperity — paid a $15,000 fine and agreed to remain out of Wisconsin politics for three years after he was accused of election law violations during his 1997 stint as a state supreme court justice’s campaign manager.
To be fair, the Prosperity USA records are consistent with illegal activity but they may not themselves be sufficient to prove the Cain campaign acted illegally. Nevertheless, two election lawyers quoted by Bice found them deeply troubling. In the words of one GOP attorney, “if the records accurately reflect what occurred, this is way out of bounds.”