Steve Bannon, former top Trump aide, arrested, charged with fraud in fundraising for private border wall
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Former White House adviser Stephen Bannon was arrested Thursday along with three others associated with the crowdfunded We Build the Wall campaign, which raised $25 million to build a fence along the United States border with Mexico.
The indictment filed in the Southern District of New York says they “orchestrated a scheme to defraud hundreds of thousands of donors” by siphoning off contributions to the organization, which was meant to supplement President Trump’s pet project.
Bannon was charged, along with We Build the Wall founder Brian Kolfage, Andrew Badolato and Timothy Shea, with conspiracy to commit wire fraud and conspiracy to commit money laundering. Contrary to repeated public assurances by Kolfage, a disabled Air Force veteran, that he would “not take a penny in salary or compensation” and that “100% of the funds raised ... will be used in the execution of our mission and purpose” to build a border wall, prosecutors charge that all four men “received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization’s public representations.”
Specifically, the indictment alleges that “Kolfage covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall,” while Bannon received over $1 million through another unnamed nonprofit under his control, “at least some of which” was used to pay for hundreds of thousands of dollars in his personal expenses.
“As alleged, the defendants defrauded hundreds of thousands of donors, capitalizing on their interest in funding a border wall to raise millions of dollars, under the false pretense that all of that money would be spent on construction,” Acting U.S. Attorney Audrey Strauss stated in a press release announcing the indictments Thursday. “While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle.”
Strauss, who had been deputy U.S. attorney, took over running the office in June after Attorney General William Barr engineered a clumsy ouster of the incumbent, Geoffrey Berman, for reasons that have never been publicly explained. Barr’s choice to replace Berman, Jay Clayton, chairman of the Securities and Exchange Commission, met with resistance in the Senate, and his nomination was never formalized.
“This case should serve as a warning to other fraudsters that no one is above the law, not even a disabled war veteran or a millionaire political strategist,” said Philip Bartlett, inspector in charge of the New York field office of the United States Postal Inspection Service, or USPIS, which collaborated with the U.S. Attorney’s Office in New York on the investigation.
At an initial hearing Thursday afternoon, Bannon pleaded not guilty to both of the charges, and a magistrate judge approved his release on $5 million bail, which would be secured by $1.75 million in assets.
We Build the Wall has been at the center of a number of controversies since it was created in late 2018, drawing the support of several high-profile Trump allies in addition to Bannon. Last year, Yahoo News reported that the group, along with Trump-backed contractor Tommy Fisher, had skirted local and federal regulations, and used intimidation and threats to quickly construct its first section of border wall on private property in Sunland Park, N.M., near El Paso. In December of last year, the group and Fisher teamed up again to build a second section of privately funded wall on the banks of the Rio Grande. Despite being temporarily blocked by a federal judge, construction on the second wall proceeded using similar tactics to those that had been deployed in Sunland Park. As of last month, ProPublica and the Texas Tribune reported that, according to engineers and hydrologists, the quickly constructed wall was already showing signs of runoff erosion and was at risk of falling into the Rio Grande if not repaired.
Earlier this week, Kolfage tweeted that GoFundMe had deleted his latest crowdfunding campaign for a “class action lawsuit against Black Lives Matter, the NFL, NBA, MLB and NHL For all victims of their racist attacks.”
NBC New York reported that, according to a law enforcement source, Bannon was arrested Thursday morning aboard a boat off the coast of Connecticut.
Bannon was the executive chairman of the right-wing website Breitbart News before he joined Trump’s presidential campaign as chief executive officer in August 2016. After Trump’s inauguration he served as chief White House strategist for eight months, but had a public falling out with the president over his quotes in Michael Wolff’s White House exposé “Fire and Fury.”
The White House distanced itself from We Build the Wall on Thursday morning. Press secretary Kayleigh McEnany told reporters: “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 not been involved with Steve Bannon since the campaign and the early part of the administration, and he does not know the people involved with this project,” she added.
In addition to Bannon and Tommy Fisher, whose construction company Trump personally advocated to receive federal border wall contracts, We Build the Wall’s advisory board includes a number of prominent supporters and associates of the president, including Blackwater USA founder Erik Prince and Kris Kobach, the aggressively anti-immigrant former Kansas secretary of state who recently lost a bid for the Senate.
We Build the Wall’s activities have also received support from Trump’s Department of Homeland Security. Yahoo News first reported that acting Homeland Security Secretary Chad Wolf made an unannounced visit to the Sunland Park wall during his first official trip to the border in November. Asked about whether he supported private groups constructing their own sections of border wall, Wolf told reporters at the time, “I welcome all that want to be part of the solution.”
Although the case has been assigned to U.S. District Judge Analisa Torres in the Southern District of New York, the four defendants were arrested Thursday morning in different parts of the country, and are each scheduled to appear before judges in their respective jurisdictions today. (Bannon will appear in the Southern District of New York; Kolfage, who lives in Miramar Beach, Fla., will appear before U.S. Magistrate Judge Hope Cannon in the Northern District of Florida; Badolato, of Sarasota, will be presented before U.S. Magistrate Judge Thomas Wilson in the Middle District of Florida; and Shea, who lives in Castle Rock, Colo., will appear before U.S. Magistrate Judge Kristen Mix in the District of Colorado.)
Kolfage could not be reached directly for comment. Rich Kaye, an Atlanta-based attorney who has previously served as legal counsel for We Build the Wall, did not respond to an immediate request for comment.
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