Last week, a former George Santos aide pleaded guilty to federal charges in connection with a $500,000 campaign loan that the indicted congressman had entirely fabricated. But while that loan was fake, the money, eventually, became real.
According to a person with knowledge of the events, that fake $500,000 from March did in fact find its way into the campaign’s bank account. It just happened months later, as part of the $615,000 Santos loaned himself in four installments in September and October. Those payments are reflected on his campaign’s most recent filings—making good on something of an “IOU” to the campaign.
But even if Santos eventually delivered the money, legal experts told The Daily Beast he’s still in heaps of trouble.
According to the government’s charging information against Nancy Marks—who served as the campaign’s treasurer—Santos faked the loan to get help from a national political party understood to be the National Republican Congressional Committee. Essentially, prosecutors say, Santos invented the loan, along with 10 entirely fake maximum campaign contributions in the names of other people, so that his campaign could qualify for a special NRCC partnership program that helps promote promising congressional candidates.
This meant that a fake $500,000 loan made on March 31 with no real money behind it appeared in Santos’ campaign finance reports—filings that document how much money the committee raises and spends and has in the bank. But after Santos came under law enforcement scrutiny, and after Marks resigned as treasurer, the March 31 loan mysteriously stopped appearing in new reports. Instead, the campaign’s new treasurers began listing a series of brand new six-figure loans in October and September—real money that Santos loaned his campaign about half a year later, backfilling the $500,000 in an effort that would both keep the committee solvent and not draw attention to his previous deception.
The revelations change the timeline and raise new questions about the Santos campaign’s bewilderingly inconsistent financial statements, but they also bring the conversation back to square one, legal experts told The Daily Beast. In other words, the central questions are the same as they were earlier—where the money came from, how it was spent, and whether Santos lied about any of it to donors and the government.
Perhaps most notably, Marks pleaded guilty to a charge that has nothing to do with any of the 13 counts laid out in the indictment that Justice Department prosecutors brought against Santos in May. Still, the DOJ merged their cases, listing her as a co-defendant with Santos. Two people with knowledge of the investigation told The Daily Beast that additional charges against Santos appear imminent, noting that details in Marks’ plea agreement strongly indicate the new charges would include campaign finance violations.
The Daily Beast reached out to the attorneys representing Santos and Marks, but both declined to comment for this article.
In December 2022, Santos told The Daily Beast and others that the money he’d put into his campaign came from his own company, the Devolder Organization, the nebulous consulting firm Santos owns and uses to perform what are essentially brokerage services for private clients. A number of experts in campaign finance law laid out the case for why Santos’ description appeared illegal on its face. Given the fact that Santos didn’t appear to command the personal finances to make such a large loan—which the DOJ confirmed in Marks’ plea agreement—it seemed clear to them that the congressman-elect was describing a corporate pass-through, and possibly an illegal straw donor scheme as well.
The fake loan, combined with the new information that the money was eventually real, only reinforced those claims.
Jordan Libowitz, communications director for government watchdog Citizens for Responsibility and Ethics in Washington, told The Daily Beast on Sunday that “this is just an additional level of lying and criminal exposure.”
“None of this is remotely legal,” Libowitz said. “What we were originally looking at is that Santos appeared to have loaned his campaign money that he didn’t actually have, because it was illegally being funneled through his business from individuals who weren’t by law allowed to make such large donations. The loans would have hidden where the money came from, so that’s an illegal pass-through corporate contribution or a donation in the name of another person.”
Brendan Fischer, a campaign finance law specialist and deputy executive director of Documented, agreed.
“Since the beginning of the George Santos saga, a lingering question has been where the cash-strapped candidate came up with hundreds of thousands of dollars to put into his campaign,” Fischer told The Daily Beast.
“It would appear that Santos’s infusions of cash into his campaign line up with a series of questionable business endeavors,” he continued, noting that there are still many unknowns. While profiting from “shady get-rich-quick schemes” might infringe on other laws, he said, “it wouldn’t necessarily be a campaign finance violation to put one’s personal share of the proceeds into their campaign.”
But, Fischer explained, Santos still can’t treat his corporate bank account as a pass-through to his campaign. “Even if Santos’s clients paid his business for legitimate purposes, Santos would still violate campaign finance law if he treated corporate money as his personal funds,” he said.
If Santos financed the loans from business clients who were seeking to secretly support his bid, Fischer said, “then we’re likely looking at disclosure violations and contributions in excess of legal limits.”
In December, The Daily Beast revealed the names of four Santos corporate clients. Two of them also happened to be the parties involved in a $20 million yacht sale that Santos had brokered in September of last year, The New York Times later reported.
Other Santos associates have claimed they were solicited for major political contributions around the same time, which is also when prosecutors say Santos was pitching donors on the fake “dark money” nonprofit scheme that netted him a federal charge. (Santos also faces charges for wire fraud, unemployment fraud, money laundering, theft of public funds, and making false statements to Congress on his personal financial disclosures.)
Mathematically, it has always appeared impossible for the $500,000 to have been entirely fake. The Santos campaign reported spending almost every dollar it raised over the course of 2022, taking in $2,965,534.31 and disbursing $3,060,549.17. While The New York Times reported that about $365,000 in Santos campaign expenses appeared “missing” in filings—“with no record of where it went or for what purpose”—that fact, along with the other irregularities observed in Santos’ reports, would still not appear to fully explain how the campaign balanced a fake $500,000 loan (and $55,100 in nonexistent contributions) throughout the year.
The first Santos indictment was conspicuously bereft of anything related to the unprecedented and unjustifiable irregularities in the Santos campaign’s filings. The only campaign finance-adjacent allegations in the document involve a political nonprofit solicitation scheme outside of the campaign itself.
Marks’ plea agreement, on the other hand, is focused on the falsified loan and campaign contributions. But while Marks—who signed the campaign’s filings with the Federal Election Commission—admitted guilt to one count of defrauding the United States, she did not plead guilty to making false statements to the government by including that fake loan in filings, a charge that would have fit the facts laid out in her agreement.
The campaign’s filings, however, are a mess. They report the loans in contradictory ways across multiple reports—and in corrected versions of those filings—making it difficult to deduce what happened and when. For instance, in a February filing, the first without Marks, $100,000 in debt vanished, with no explanation. Then, while under DOJ investigation, the campaign filed the first report of its 2023 activity and changed several key facts: the dates Santos made the loans, the amounts of individual loans, and the total amount loaned.
The fake $500,000 loan vanished entirely in that filing, replaced with that amount and more in new loans from September and October—matching the “IOU” claim that the money did eventually come through at that time.
That same filing also erased $40,000 from the previous loan total, showing $715,000 instead of $755,000. The campaign’s next filing, in July, showed a total $530,000 in loans, which was quickly amended to reflect a total $630,000, adding back in a $100,000 loan from October that had appeared on the previous report. The discrepancy between $715,000 and $630,000 resulted from Santos repaying himself $85,000 from his donors’ money on May 30, after he was indicted.
Santos also appears to have reported outsized fees to WinRed, suggesting he used a legal backdoor “revenue share” arrangement to pay an unknown vendor.
The New York Times reported this summer that Santos sought to profit from a flood of donations to Tina Forte’s longshot 2022 campaign against Rep. Alexandria Ocasio-Cortez (D-NY). The report describes a Santos-run consulting firm, Red Strategies, engaging in the controversial but legal practice known as “revenue sharing,” where campaign consultants take payment on the back end of fundraising hauls. These deals result in FEC filings that show incomprehensibly large “credit card fees” to WinRed. Those amounts dwarf the online service’s normal 4 percent fee. But WinRed splits most of the money off to the contracted consultant on the back end, and the consultant’s payment is never publicly disclosed.
Red Strategies, like other revenue sharing firms, contracted an enormous commission from Forte—80 percent—which it collected from Forte via WinRed. But as the Times reported, some of the Santos campaign’s own WinRed payments show a strikingly similar pattern, suggesting that an unknown consulting firm—like Red Strategies—profited off of his campaign as well.
As it turns out, Santos was also using an entity named “RedStone Strategies” to illegally solicit major political contributions late in the election, as laid out in his indictment. One of the people he solicited, the Times reported, was a business client.