‘In a hard place either way you slice it’: George Santos under fed investigation over finances

Rep.-elect George Santos now faces scrutiny for more than just his embellishments. He faces scrutiny specifically over his finances as well.

“The man with almost as many lies on his resume as lines on his resume is now under federal investigation by the U.S. Attorney’s office for the Eastern District of New York. A source familiar with the matter tells me tonight that prosecutors are looking into his finances,” CNN’s Pamela Brown reported Wednesday.

“The congressman-elect, as you know, has faced questions about his wealth and loans totaling more than $700,000 he made to his 2022 campaign. We’ve asked for a comment from a representative for Mr. Santos but so far have not heard back. And again, this is merely the latest of many shoes to drop. We’ve learned as well about a criminal charge he faced in 2011 in Brazil for alleged embezzlement,” she added.

Listen:

As previously reported, Santos has in recent days faced the wrath of the public (and Tulsi Gabbard) for lying about virtually everything while campaigning for office. But it turns out his finances seem just as twisted as his words.

His financial woes start with the fact that he withdrew money from his company, the Devolder Organization, to fund his campaign to the tune of $700,000.

This is problematic because “while candidates for federal office may give unlimited amounts of their own money to their campaign, they cannot expressly tap corporate accounts to do so,” according to The Daily Beast.

“You can fund a campaign with your own money to whatever extent you’d like, but the deal is it has to be your money,” Jordan Libowitz, the communications director of the government watchdog group Citizens for Responsibility and Ethics in Washington, explained.

“Two major problems here. One, if it’s the company’s money, it’s not his money. If it were Santos personally doing business as the company—that is, if it were his bank accounts—that’s okay. But this is an actual corporation, and you can’t make a corporation to run money through to your campaign,” he added.

But why is this frowned upon? Because such a scheme — funding a campaign through a corporation — could be used to hide the money’s origin.

“If I wished to illegally fund a campaign and hide it, what I would do is run the money through a dummy corporation, then to a dark money group that supports the campaign. But if I was not that up on things, or a little lazy, I might … set up the dummy corporation, say it’s in the name of the candidate, then have the candidate pay himself the money and give it to the campaign,” Libowitz explained.

“This isn’t to say that this is clearly an illegal pass-through donation scheme, because we don’t know the full picture yet — but if it were one, this is what it would look like,” he added.

But will the federal investigation into Santos lead to any consequences worth worrying about? Possibly. After all, Santos made “knowing and willful” contributions to his campaign, Brendan Fischer, the deputy executive director of the government watchdog group Documented, argued to The Daily Beast.

“Santos might be in a hard place either way you slice it,” Fischer added.

A very tough place indeed.

Fischer went on to speculate on how the case might be prosecuted.

“One theory is that the Devolder Organization was a shell that functioned to allow wealthy donors to secretly bankroll Santos’s 2022 run for Congress. If that [were] the case, it could implicate not just Santos but anyone who used it to knowingly evade disclosure requirements and contribution limits. But even if the Devolder Organization [is] a legitimate company, then Santos could still have violated the law if he diverted corporate funds to his campaign,” he said.

Responding to all these concerns, Santos said for his part that the money he funneled to his campaign from the Devolder Organization was moved legally because he’s the company’s only owner.

But The Daily Beast notes that even if he’s the sole owner, “the company is not legally indistinguishable from Santos—it is registered with the state of Florida as an independent LLC, and it has its own accounts separate from him personally.”

Further complicating the matter is that many of the Devolder Organization’s clients — which include New York-based Tantillo Auto Group, two organizations tied to the influential Ruiz family in south Florida, and another firm associated with Long Island insurance magnate James C. Metzger — are also Santos donors.

“Members of the Tantillo and Ruiz families, along with Metzger, also all happen to be Santos campaign donors. And some of them have further stakes in the Long Island political scene, including major donations to top Santos ally Rep. Lee Zeldin (R-NY), who lost his bid for governor this year,” according to The Daily Beast.

And then there’s the fact that Santos has apparently not included information about all four clients in his financial disclosures.

“Mr. Santos’s disclosures did not reveal any clients, an omission three election law experts said could be problematic if such clients exist,” The New York Times notes.

Despite Santos lying so much and keeping so many secrets, “experts” say he’s still more likely than not to be seated next month:

“All the odds are that he’s going to be seated,” Casey Burgat, the director of the legislative affairs program at George Washington University’s graduate school of political management, told MarketWatch.

“He can’t be denied his seat by the Congress,” Eric Gander, an associate professor of public argument at Baruch College, City University of New York, added.

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Vivek Saxena

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