- The Washington Times - Sunday, November 13, 2011

A felon once imprisoned for fraud is raising money in the name of Herman Cain and profiting off of it through a company he owns. It is the second group raising large amounts of Cain cash that has a history of collecting millions of dollars through politically charged mailings and spending hardly any of it on politics.

Draft Herman Cain is the latest from two California men who have raised tens of millions of dollars cashing in on causes such as breast cancer and illegal immigration, with little to show for it except payments to fundraisers and themselves, an analysis by The Washington Times shows.

Randy J. Goodwin, its treasurer, also heads the Republican Majority Campaign (RMC), which raised $3.8 million from donors last election cycle yet gave only $15,600 to candidates and spent $105,000 on advocacy.

He and disbarred lawyer Charles F. Benninghoff III last week began gearing up for what could be a sizable fundraising campaign, paying for lists of likely donors and making payments to Grassroots Campaign Creator, one of a multitude of Internet and political entities that Mr. Benninghoff owns.

A series of other political action committees (PACs) tied to the men, according to the analysis, has collected money from ideological donors and plowed it into those companies and into their personal bank accounts. The organizations have raised money by casting a wide net with exclamation-filled missives tapping into tea party anger along with barrages of telemarketing calls.

Despite the name, Draft Herman Cain kicked into gear after Mr. Cain already entered the race and came on the heels of an effort by the same men called Draft Sarah Palin, which reported running no ads. Other Goodwin efforts that drew contributions but no political activity include the Breast Cancer Awareness PAC.

Ninety-two percent of the money raised by the Republican Majority Campaign last cycle went to an Arizona telephone fundraising firm known as Political Advertising, which has received $12 million from four little-known conservative groups in recent years, the analysis found.

Mr. Goodwin acknowledged that when people nationwide received phone calls from RMC asking for money to support conservatives, their donations went almost entirely to allowing more of those same calls to be made. But he defended the practice by saying, “It is going to allow the message against Obama to be distributed.”

In recent years, his PACs also paid hundreds of thousands of dollars to himself, Mr. Benninghoff and his wife, and companies that the Benninghoffs own. On the rare occasion a Goodwin group sends money to political groups, it often goes to other funds he controls.

Those include a nonprofit called the United States Justice Foundation, of which Mr. Goodwin is an officer. The organization took in $4 million in contributions in 2009, most of which went to direct-mail firms used by the political groups. It appears to spend little except to pay RMC’s top staffer, Gary Kreep, an additional $174,000, according to documents filed with the Internal Revenue Service.

Draft Herman Cain also has paid RMC to rent its list of donors. The transfer of those names is crucial to the business, and those sending solicitations off of the same list often will use different names so the recipients don’t realize they are giving to the same people.

‘Sucker’ list?

About $300,000 went to Diener Consultants, a Pennsylvania firm without a working phone, to obtain a list of “reliable donors.” The names on Diener’s lists appear to be easy pickings for anyone who sends a tea party-themed mailer.

Diener’s other major client, AmeriPAC, raised $4 million last election cycle, nearly all of which went to the consultant, Political Advertising and PAC officials. AmeriPAC donated $49,000 to candidates and ran $27,000 worth of ads. Diener also has done work for a smattering of committees connected to former presidential candidate Alan Keyes, such as the Minutemen Alliance, which have raised millions of dollars with little to no money spent toward effective political ends. Mr. Goodwin denied any connection between the Justice Foundation and the Minutemen groups, but The Times obtained joint fundraising solicitations between the foundation and the Minutemen.

It often is the same people giving to each of these seemingly unrelated groups, all connected to a few consultants and all of which spend little on politics, the analysis by The Times showed. The donors are not political powerhouses, but rather middle-class tea partyers, including those who only recently became acquainted with the political world. Their most common occupation is retiree, records show.

Edwin Sandham, a 94-year-old Florida man with a full-time caretaker, has donated nearly $45,000 in small increments to more than a dozen groups connected to Diener, the Minutemen or a D.C. firm called Base Connect, the target of repeated solicitations from seemingly unrelated groups after finding himself on such a list.

Donors to Goodwin groups also gave to a multitude of equally inefficient groups connected with direct-mail firm Base Connect. The Times reported last month that another outside group run by former Base Connect officials called Americans for Herman Cain was sending solicitations that looked much like official Cain campaign materials.

The pattern indicates the presence of valuable “sucker lists” containing broad swaths of tea party donors, many of whom eschew the party establishment and are new to politics, who will respond to generic attacks on liberals without careful scrutiny of where their money is going. Those lists then are rented at great expense.

A business model

Once a donor gives to a political committee, there are no requirements on how much must make its way to politicians, and there is no one to determine what market value is for services rendered.

In explaining payments to Mr. Benninghoff, a college friend, Mr. Goodwin said maintenance of a couple of bare-bones PAC websites was Mr. Benninghoff’s full-time job for a time.

In addition to being found guilty of three federal felony charges involving finances, Mr. Benninghoff relinquished his license to practice law after he was disciplined for dishonesty several times, including for sending mailings asking prisoners for hefty fees.

“The solicitation, which was not identified as an advertisement, said Benninghoff could help prisoners apply for a transfer to a Mexican prison. It also implied he had a relationship with government officials in both Mexico and the U.S. which could help the prisoners,” bar officials wrote.

Afterward, the lack of a license didn’t stop him from practicing law, marketing himself through mail and online.

“No longer an active member of the State Bar, Benninghoff plied his trade outside the court system. He represented professional licensees in state administrative hearings and federal prisoners in prison-transfer applications. He sent direct-mail solicitations and operated websites advertising his services as a ‘professional advocate,’” a judge wrote.

On how the Cain group will operate, Mr. Benninghoff said, “the record speaks for itself.”

Own the strategy

Draft Herman Cain is not a “super-PAC,” or conduit for unlimited donations; it is subject to the same contribution caps as the official campaign. So why should donors give $75, which Mr. Goodwin said is the average donation, to the organization rather than directly to the campaign? Mr. Goodwin said his group could use funds more effectively, in this case by targeting advertisements to populous Florida.

“Everyone says his campaign needs organization and money, and that’s true. … They keep saying they’re running an unconventional campaign, and I think that’s self-evident,” he said.

“I believe the campaign is perfectly capable of handling primaries in places like Iowa and New Hampshire,” but Florida, with multiple media markets, is more difficult and will require $5 million in ads, Mr. Goodwin said.

Expenditure records through September indicate that Mr. Cain’s own efforts in Florida have consisted largely of steak dinners there — thousands of dollars worth.

Official campaign leaves void

The emergence of a second independent group underscores the big-dollar chaos that has filled a vacuum left by the Cain campaign, which the expenditure records indicate made hardly any of the typical buys for advertisements and merchandise such as stickers. In a new era of outside political groups after the Supreme Court’s Citizens United ruling, supposedly independent committees have been established by candidates’ confidants to collect large contributions from donors who have already given the maximum to the campaign.

Mr. Cain instead has been surrounded by strangers’ groups, including those who may sense a payoff.

Draft Herman Cain, RMC and the Justice Foundation have paid tens of thousands of dollars to companies operating out of the Arizona home of Floyd G. Brown, a founder of Citizens United who has been raising money by attaching himself to others’ campaigns for decades. In 1992, campaign counsel Bobby Burchfield told him he was hurting President Bush’s re-election efforts by getting in on the millions of dollars that became available in the campaign season.

“Your group has neither asked for, nor received permission to solicit funds using the name of George Bush,” Mr. Burchfield wrote. “The president strongly disapproves of this misleading use of his name and reputation.”

The other independent group, Americans for Herman Cain, has spent hundreds of thousands of dollars on ads and phone calls in Iowa and Nevada in the past two weeks, indicating it is raising significant amounts. Unlike Mr. Bush, Mr. Cain has not weighed in on the presence and histories of the outside groups, and his spokesman did not respond to questions from The Times.

In another matter, Mr. Benninghoff defended in court his “fabricat[ing] various pretenses for retaining” $76,000 in someone else’s funds he was supposed to invest by arguing in a profanity-laced statement that the victim was wealthy.

“Not all fools are poor. We decline to adopt a rule that encourages unscrupulous lawyers to make them so,” the judges wrote.

• Luke Rosiak can be reached at lrosiak@washingtontimes.com.

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