This week, the campaign committee of Rep. Jim Jordan (R-Ohio), received ten notices from the Federal Election Commission reporting discrepancies in its books totaling nearly $ 3 million and going back more than two years. The campaign claims the mistakes fell through the cracks amid a record-breaking fundraising wave and that it actually has more money on the books now, but experts say the dollar amount – errors totaling some $ 2.87 million – may trigger an FEC investigation.
The errors also appear to be linked to newly developed payment systems largely hidden in the murky world of Republican digital advertising, where vendors not only receive direct spend, but also take cuts in fundraising.
The notices, sent in batches between February 28 and March 2, come in response to more than a dozen amended reports correcting errors the campaign found during a thorough review of filings, dating back as far as 2018. One of the deposits reveals errors in expenses and levies totaling $ 1,470,286.48.
The commission gave the campaign until early April to respond, and the letters say failure to “respond adequately” could result in an audit or enforcement action.
Campaign spokesperson Kevin Eichinger provided the Daily Beast with a statement making the corrections a positive sign and throwing the blame on the campaign’s longtime treasurer, the tax law and business-based business expert. Ohio, James Kordik, who was replaced when Jordan hired Datwyler last July.
“The campaign filed an amendment with the FEC to correct its campaign fundraising reports dating back to 2018. There was never any money missing from the account,” Eichinger said. “In fact, the campaign cash balance is actually higher than previously reported in campaign fundraising reports. The error occurred when the former campaign treasurer inadvertently twice declared some fundraising expenses. When the error was discovered, the campaign hired an external expert to perform a full audit and file the appropriate changes. “
Kordik did not immediately respond to a request for comment.
The campaign has indeed stepped up its fundraising in 2020. In the 2016 cycle, before Donald Trump’s election, the Jordanian campaign received just over $ 733,000 and spent around $ 423,000, according to records. of the FEC. Jordan’s congressional district has long been viewed as a strong Republican, a seat it has won by at least 60% for several cycles. But his profile rose over the Trump years as Jordan appeared regularly in conservative media to polish his mark as a fierce critic of the Democratic agenda, a strategy that opened the floodgates for fundraising.
Its numbers increased for the 2018 cycle, grossing $ 1.24 million and disbursing around $ 1.8 million. But in 2020, they skyrocketed: He raised $ 18.6 million and spent $ 13.2 million, and is now on a $ 6 million reserve. Jordan has disbursed more than $ 12.4 million to fund its own operation, transferring just $ 180,000 to other committees, primarily the Ohio GOP.
Campaign finance experts say the errors are large enough that, if the conservative rising star can’t offer a valid explanation, the FEC will likely send the matter back to its enforcement arm. Such a decision would not be publicly disclosed.
“The Jordan campaign appears to have had systemic reporting problems over several years, and these amendments represent substantial changes in fundraising and disclosed campaign expenses,” said Brendan Fischer, reform director at Campaign Legal Center, at the Daily Beast. “I suspect the FEC will look closely at variances of such a large amount.”
Brett Kappel, campaign finance attorney at Harmon Curran, said the reports appear “so incorrect” that the FEC can order an audit.
“The legal standard for triggering an FEC audit is high: if deposits meet the threshold of ‘substantial compliance’ with the law,” Kappel explained. “Jordan’s FEC reports were so incorrect for such a long time that they can meet the standard.”
Jenna Grande, press secretary for Citizens for Responsibility and Ethics in Washington, a Washington-based nonprofit watchdog, said, “That’s a very large amount of money in spreads. While much remains to be learned about this situation, the Jordan representative’s campaign must provide a full account of what happened and why. “
The current explanation of the campaign is incomplete and somewhat contradictory. For example, it mentions spending errors, but does not explain the significant errors in the campaign’s fundraising, which the FEC says was reduced by a total of $ 1,280,852.36 – almost in half. in the July 2020 Quarterly Campaign Report, Kordik’s latest filing. Some amendments show increases in revenue and others show decreases.
The statement also does not appear to explain the appearance of a $ 20,000 transfer to the Ohio Republican Party in October 2018, according to one of the amended reports.
The confusion can be related to backdoor vendor payments in GOP digital fundraising setups. The Washington Post reported on Tuesday that shady consulting firms had withdrawn fundraising payments. This is tantamount to a kind of royalty arrangement: the more money the contestants raise, or the more viral they are, the bigger the reduction is to the media provider who made this happen.
Those fees were masked through payments to WinRed, according to the report, which features consulting firm Olympic Media, a provider that reportedly receives a portion of the revenue from fundraising through the WinRed platform. Some campaigns only reported WinRed fees, but did not separately detail the Olympic “royalties” on that fundraiser.
The report specifically mentions Jordan, which, according to WinRed, “wrongly reported expenses paid to suppliers.” Indeed, one of Jordan’s amended reports details more than $ 200,000 in payments to Olympic Media, which the initial report did not detail. Campaign statement to The Daily Beast points out that Kordik had counted “certain fundraising expenses” twice.
According to this statement, Jordan’s massive digital marketing push has overwhelmed Kordik, 65, who appears to have filed a number of flawed reports in his past two years with Jordan. These mistakes seem to overlap directly with the hiring of two companies – WinRed and Campaign Solutions, a Republican-style consulting firm based in Arlington, Va. That also specializes in digital strategy and fundraising. Founded in 2003, the company took nearly $ 37 million from Republicans last year, with Jordan accounting for about a third of that amount, or about two-thirds of its own fundraising.
Campaign Solutions also explains a number of expense variances.
For example, Jordan brought in Campaign Solutions during the 2018 cycle, paying a total of around $ 279,000 over around six months, according to OpenSecrets. The FEC reported around $ 253,000 combined in two of Jordan’s amended reports from that year: one, covering the weeks after the 2018 election, introduced an additional $ 109,000 in disbursements for the company; the other, which represents the last five weeks of the year, says that the campaign had actually paid Campaign Solutions $ 130,000 less during that period than originally advertised. This amended year-end report also adds the transfer of $ 20,000 to the Ohio Republican Party.
At the time, Datwyler was working at Campaign Solutions as an accountant. He appears to have left in early 2020, before joining Jordan, but while employed at the fundraising company, he also acted as treasurer for dozens of political committees. Its current portfolio includes 165 committees, nine formed this year, including groups supporting high-level Conservatives, Senator Josh Hawley of Missouri and Representative Mike Lee of Utah. In 2020, Datwyler’s company 9Seven Consulting raised over $ 1 million for FEC compliance services.
Notably, Datwyler joined the campaign last July and was there to receive a notice from the FEC pointing out a number of inconsistencies in Kordik’s repository. The letter told the campaign it was risking an audit if the FEC didn’t get a response on September 8, but fills indicate Datwyler never responded. The edited version of that report ended up being by far the most egregious of the bunch, with over $ 1.47 million in lifting and spending errors.
It is possible that the prospect of this review was too difficult to undertake at the time, but that would not explain why the campaign appears to have failed even to respond. Datwyler has been singled out in a report on so-called “pop-up PACs,” fundraising groups created in the weeks leading up to an election, allowing them to avoid disclosing their donors to the public until the end of the day. end of elections.
Caleb Burns, campaign finance specialist at Wiley Rein, explained that mistakes can accumulate over time. “The FEC reports financial information carried forward in subsequent reports,” he said. “An error found in an old report may require more comprehensive accounting and changes to many additional reports.”
The FEC regained its quorum – and its ability to take coercive action – in December. “The FEC commissioners themselves must ultimately approve any enforcement action,” Brown said. “The lack of a quorum of commissioners until the end of last year meant that the application of the FEC was at a standstill. This is no longer the case, although Commissioners have a significant backlog of law enforcement issues to resolve.
A spokesperson for the FEC declined to comment for the article, citing its policy of not publicly addressing specific issues “because of the possibility that they may come before the agency for execution.”
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