Herman Cain campaign operation may breach federal campaign and tax laws

Were it not for everything else going badly for Herman Cain today, this would probably be a bigger story. The Milwaukee Journal Sentinel’s Dan Bice reports that a corporation set up by Cain campaign staffers (Internet celebrity Mark Block and Deputy Chief of Staff Linda Hansen) originally footed the bill for “tens of thousands of dollars in expenses.”

Check it:

Internal financial records obtained by No Quarter show that Prosperity USA said it was owed about $40,000 by the Cain campaign for a variety of items in February and March. Cain began taking donations for his presidential bid on Jan. 1.

It is not known if Cain’s election fund eventually paid back Prosperity USA, which now appears defunct. The candidate’s federal election filings make no mention of the debt, and the figures in the documents don’t match payments made by the candidate’s campaign.

In addition to picking up these expenses at least initially, Prosperity USA also paid as much as $100,000 to the Congress of Racial Equality, a conservative black organization, shortly before Cain was a featured speaker at the group’s annual Martin Luther King Jr. dinner in mid-January.

The article is chock full of quotes from alarmed lawyers and election types who were shocked at this set up, and have plenty to say on how it won’t pass muster (I’m as shocked as you are about this.)

Election law experts say the transactions raise a host of questions for the private organization, which billed itself as a tax-exempt nonprofit, and the Cain team.

“If the records accurately reflect what occurred, this is way out of bounds,” said a Washington, D.C.-based election lawyer who advises many Republican candidates and conservative groups on campaign issues. The lawyer asked not to be identified because of those affiliations.

Michael Maistelman, a Wisconsin campaign attorney, agreed.

“The number of questionable and possibly illegal transactions conducted on behalf of Herman Cain is staggering,” said Maistelman, a Democrat who has represented politicians from both parties on campaign issues.

But even more entertaining are some of the items this corporate-campaign hybrid paid for including:

  • $5,000 for “costs associated with” Cain’s speech at Right Nation
  • Mark Block traveling to DC to meet with everyone’s favorite right wing billionaire David Koch
  • A payment to singer Krista Branch who recorded ‘I Am America’ for the Cain campaign
  • “$150,000 in loans from individuals who could not be identified.”

Bice also points out that Mark Block has a history of creative campaign accounting, once such instance which led to him being banned from campaign work in Wisconsin for three years.

Melissa Ryan is a political consultant. She’s spent a decade leading digital campaigns for nonprofits and political races, including EMILY’s List, Barack Obama’s 2012 reelection campaign, the New Organizing Institute, and Senator Russ Feingold’s campaign. Visit her website at melissaryan.net or follow her on Twitter @MelissaRyan.

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