Santos loans deepen questions around campaign finances

A set of updated campaign finance reports are deepening the mystery surrounding the source of high-dollar loans that Rep. George Santos (R-N.Y.) made to his campaign last year. 

Santos’s campaign previously reported that a pair of six-figure loans from the candidate — one for $500,000 that was made last March and another for $125,000 in October — came from his personal funds. 

But in an amended filing with the Federal Election Commission (FEC) on Tuesday, Santos’s campaign unchecked a box indicating that the $500,000 loan came from personal funds. Similarly, a separate updated report left the same box unchecked for the $125,000 loan. The changes were first reported by The Daily Beast.

Further complicating the matter is the fact that filings from later in 2022 still mark the $500,000 loan as coming from personal funds, leaving the source of the money unclear. Campaign finance experts are struggling to unpack the latest disclosures from Santos’s campaign, which they say are riddled with potential errors and discrepancies.

“Nobody can make sense of them,” said Robert Maguire, the research director for Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit watchdog group. “It seems impossible at this point that there is some sort of oversight.”

“It’s just an astounding number of financial questions,” he added. “I’ve been doing that for more than a decade and I’ve never seen anything like this.”

Brett Kappel, an elections lawyer specializing in campaign finance, said that it’s unclear whether the apparent discrepancies on Santos’s updated filings were the result of a simple clerical error or an intentional change. 

Regardless, Kappel said, “the amendments make no sense and are inconsistent,” adding the changes would almost certainly attract scrutiny from the FEC.

“It might be a mistake that was made when amending other parts of the same report or it could be deliberate if his treasurer refused to mark it as personal unless he provided documentation,” he said. “Either way it is going to generate another FEC letter asking him to describe the true source of the loan and its particulars.”

Federal election law allows candidates to loan personal funds for campaign purposes or take out bank loans to help fund their political operations. But experts said that any bank loan the size of those made by Santos would require collateral, and Santos’s filings with the FEC note that the loans were not backed by collateral.

Santos’s attorney Joe Murray did not respond to The Hill’s request for comment on the amended campaign finance reports. Santos himself declined to elaborate on the changes on Wednesday, telling reporters outside the U.S. Capitol that he doesn’t manage his campaign’s financial disclosures.

“I don’t amend anything,” Santos told reporters on Wednesday. “I don’t touch any of my FEC stuff. So don’t be disingenuous and report that I did, because you know that every campaign hires fiduciaries. So I’m not aware of that answer.”

To be sure, it’s not unusual for campaigns to file updated reports with the FEC in order to correct errors or provide additional required information. But Erin Chlopak, the senior director for campaign finance at the nonprofit Campaign Legal Center (CLC), said that Santos’s filings aren’t typical.

“The FEC has already issued a large number of requests for additional information where they flagged their own concerns,” Khlopak said. “I think that this particular committee has raised an unusual number of questions.” 

CLC filed a complaint with the FEC earlier this month accusing Santos’s campaign of illegally using funds for personal expenses and concealing the source of Santos’s loans to the campaign, among other concerns. Khlopak said that CLC was still in the process of sorting through Santos’s latest filings.

Khlopak warned against jumping to conclusions about the latest discrepancies regarding Santos’s campaign loans. But, she added, “it’s certainly significant whether it was a clerical mistake or intentional, and it’s something that should be examined.” 

“If it’s personal, then there’s the question of did he actually have the money to loan? And if not, where did the money come from?” she said. “There are a lot of questions about where it came from, the term of the loan, etc. There are requirements about providing details about what they are.”

The updated disclosures mark the latest turn in the winding saga of Santos, who has faced growing scrutiny over everything from his financial dealings to lying about his résumé and personal life.

In previous filings with the FEC, Santos’s campaign reported that he had personally loaned his campaign more than $700,000, but questions remain over where that money came from. Santos has said that the money came from his work at his company, the DeVolder Organization. 

Santos is also facing scrutiny over whether an outside entity had solicited large donations for his campaign without being registered with the FEC. 

There are also questions about a series of expenses for $199.99 made by Santos’s campaign. That specific amount puts the expenses just one cent under the $200 threshold that would require the campaign to keep receipts or invoices.

On Wednesday, Santos’s campaign and a handful of affiliated groups filed updates with the FEC naming Thomas Datwyler, a longtime GOP operative, as their new treasurer, replacing previous treasurer Nancy Marks. 

The transition hit a roadblock, however, when Datwyler’s attorney Derek Ross said that his client had informed Santos’s campaign earlier this week that he would not be serving as treasurer. Federal law requires every political committee to have a treasurer in order to spend or take in money.

“On Monday we informed the Santos campaign that Mr. Datwyler would not be serving as treasurer,” Ross said. “It appears there’s a disconnect between that conversation and the filings today, which we did not authorize.”

Tags Campaign finance George Santos

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