BIG BUCKS

Some Big Names in Republican Fundraising Are Financing Trump’s Legal Defense Fund

The Patriot Legal Expense Fund Trust has raised more than $200,000. But it hasn’t spent a penny on actual legal work.

Chip Somodevilla/Getty

Some of the richest individuals in the energy, real estate, and casino industries are financing a controversial legal defense fund to help President Donald Trump foot legal bills associated with the federal investigation into Russian election meddling.

The fund, known as the Patriot Legal Expense Fund Trust, was launched in late February 2018. Through June, the group’s top donor was Geoff Palmer, a Los Angeles real estate developer and one of the Trump 2016 campaign’s biggest financial supporters, according to financial records obtained by The Daily Beast. Palmer is followed by Phil Ruffin, a casino magnate and Trump backer, and Continental Resources, the oil and gas company founded and chaired by Harold Hamm, a high-dollar Trump donor and board member of pro-Trump dark money group America First Policies.

The group also reported income from ProActive Communications, which is run by the legal expense fund’s spokesman, Mark Serrano. ProActive has also done extensive business for the Trump re-election campaign since last year and Serrano has been a public defender of the president on cable. The legal expense fund has not reported any expenditures to ProActive.

Trump set up the fund to pay legal expenses incurred by White House officials and allies caught up in special counsel Robert Mueller’s investigation into Russian meddling in the 2016 presidential election. Trumpworld figures who’ve been questioned or prosecuted as part of that investigation have huge legal bills, sometimes stretching into the seven figures.

But despite the large contributions to the group, totalling more than $200,000 through June, it did not report spending any money on legal services. Its only itemized expenditures went to the accounting firm CliftonLarsonAllen and to Petra RMS, a risk management firm that the group reported paying for “insurance” services.

The Republican National Committee and the Trump campaign have picked up the tab for many of the legal expenses incurred by the president and his team.

The Patriot Legal Expense Fund Trust has been secretive with its funding sources. The Internal Revenue Service, which generally posts such disclosures on its website, has no record of the Patriot Legal Expense Fund Trust’s financial statements for the first half of the year. But copies of the filings provided to The Daily Beast list sizable contributions from some big names in Republican donor circles.

The Patriot Legal Expense Fund Trust was incorporated as an LLC, but operates as a political action committee (PAC), which requires the group to file quarterly financial reports with the IRS. But the IRS has no record of those filings for either the first or second quarters on its website. The agency said it could not confirm or deny that it had received those filings.

The lack of public disclosure drew an IRS complaint last week from the group Public Citizen, which alleged violations of reporting requirements. Serrano said the group filed both disclosures with the IRS on time and that he has “no idea” why the agency has not made either filing publicly available on its website.

The structure of the PAC also raised red flags for some ethicists when the legal expense fund was formed in February. The political action committee structure “represents a radical and dangerous departure from established practice for government-employee legal defense funds,” wrote Walter Shaub, the former director of the Office of Government Ethics (OGE), in a column for the Los Angeles Times. “This is unprecedented in my experience—legal defense funds are not also campaign fundraising tools.”

OGE nevertheless blessed the group’s structure, provided the fund does not use money from any donor to pay for the legal expenses of federal officials who oversee that donor’s business activity.

But because of the group’s structure, and lack of activity so far, that can be difficult to determine, according to Craig Holman, Public Citizen’s government affairs lobbyist. Because the fund can theoretically support multiple Trump administration officials, there’s no way of definitively determining whether money from one donor is supporting one particular beneficiary.

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That hasn’t happened yet, if for no reason other than the group hasn’t actually spent any money on legal services. “It’s difficult to determine what is going to be a prohibited source given that this fund is not yet really up and running,” Holman said.

“Any legal expense fund should just support one officeholder,” he added. "This whole structure is designed to be a conflict of interest.”