Mr Bannon was indicted on Thursday, alongside three others, for allegedly funnelling “hundreds of thousands of dollars” from the We Build the Wall online fundraising campaign to the founder of the organisation, Brian Kolfage, who was among those charged.
We Build the Wall started as a GoFundMe campaign in 2018, and was created to help raise money from public funding to go directly towards building the the US-Mexico border wall at a time when the president was struggling with Congress.
Acting US attorney Audrey Strauss confirmed on Thursday that Mr Bannon was arrested while aboard a 150-foot yacht in the Long Island Sound, with assistance from the United States Postal Inspection Service (USPIS).
In a clip that was uploaded to Twitter on Friday by Buzzfeed reporter Ryan Mac, Mr Bannon can be seen joking about Mr Kolfage taking money from the campaign during a fundraising “WALL-A-THON”.
“We’re off the coast of Saint-Tropez in southern France, in the Mediterranean. We’re on the million dollar yacht,” Mr Bannon joked, before later clarifying that they were co-hosting the event in Sunland Park, New Mexico.
On Thursday, Mr Bannon denied all the charges against him, and claimed that “this entire fiasco is to stop people who want to build the wall”, as he left federal court in Manhattan, New York.
He has been accused of taking $1m (£764,855) from the campaign funnelled through a nonprofit organisation under his control and of using “hundreds of thousands of dollars” to cover personal expenses.
Prosecutors have alleged that Mr Kolfage, a US Air Force veteran, “covertly took for his personal use more than $350,000 (£267,669) in funds” raised by We Build the Wall.
“Brian thanks so much for all your sacrifices, doing this and showing really what capitalism’s all about,” he said. “This is private enterprise at its finest. Doing it better, faster, cheaper than anything else.
Donald Trump Jr. praised We Build The Wall and Brian Kolfage at a 2018 event: “This is private enterprise at its finest. Doing it better, faster, cheaper than anything else. What you guys are doing is amazing.” pic.twitter.com/hOL25JoZPI
— andrew kaczynski🤔 (@KFILE)
“What you guys are doing is pretty amazing. Started from a grassroots effort and it’s just doing some wonderful things for an important issue.”
In reaction to the arrests on Thursday, White House press secretary Kayleigh McEnany released a statement, where she attempted to distance the president from the campaign and Mr Bannon.
“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,” she said.
A follow up statement from the White House read: “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.”
Mr Trump commented on the situation himself later on Thursday, saying: “I feel very badly,” and adding: “I haven’t been dealing with him for a long period of time as most of the people in this room know.
“He was involved in our campaign ... and for a small part of the administration, very early on. Haven’t been dealing with him at all.”