- The Washington Times - Thursday, December 13, 2018

Acting Attorney General Matt Whitaker did not violate the Hatch Act when his campaign account from a failed 2014 Senate bid accepted four donations totaling nearly $9,000 earlier this year, campaign finance experts said.

But most of the money is still sitting in the campaign’s account because William Gustoff, the campaign’s treasurer, is waiting to make sure he can use it to pay back a loan to Mr. Whitaker, who is still owed $50,000 from a personal loan he made to his Senate bid.

Mr. Whitaker’s critics have questioned the donations — one complaint among a host of arrows aimed at the man President Trump picked to lead the Justice Department in the days after he ousted Attorney General Jeff Sessions.

But Mr. Gustoff said they’ve been careful to play within the rules.

“The reason the money is still sitting in the account is because I want to talk to the ethics lawyers at the Justice Department so we don’t create a problem. And, frankly, I’d like to have a conversation with Matt,” Mr. Gustoff said. “I’m trying to be cautious because, again, I don’t want to create any problems.”

The Office of Special Counsel, an independent agency that polices the federal Hatch Act — the law that prevents too much mixing of government business and politics — opened a case file into Mr. Whitaker’s campaign situation.

The spur was four donations made within days of each other at the end of January and early February. They were the first contributions in more than two years, and came while Mr. Whitaker was chief of staff for Mr. Sessions.

The campaign donations were revealed in Mr. Whitaker’s financial disclosure documents and immediately raised eyebrows among watchdog groups and Democratic lawmakers.

“These payments at the very least call into question Mr. Whitaker’s impartiality as the chief law enforcement officer of the United States,” said Sen. Richard Blumenthal, Connecticut Democrat.

The left-leaning watchdog group American Oversight submitted an ethics complaint to the OSC asking for a Hatch Act probe.

“The direct payments to Matthew Whitaker certainly look anomalous,” Austin Evers, executive director of American Oversight, told The Washington Times.

But a 2001 OSC ruling likely puts Mr. Whitaker in the clear. That ruling said a public employee could raise campaign cash if it was used to pay down debt from a prior campaign. The rule exists because a campaign cannot be closed until all of its debts are paid off.

“All this bellyaching about Whitaker and the Hatch Act is one of the stranger things I’ve seen in a long time,” said Cleta Mitchell, an attorney at Foley & Lardner, where she advises campaigns on finance and election law. “These liberal groups hate Trump so much they are grasping at straws to find ways to object to Matt Whitaker.”

Richard Painter, chief ethics czar for President George W. Bush, and a vocal Trump critic, agreed the allegations are likely baseless.

“The special counsel allows you to retire debt while you were in office so if that is what the money is used for, then you are fine,” he said.

But Mr. Evers said the Hatch Act exemption should not apply to Mr. Whitaker because the campaign’s largest debts are owed to him and his former law firm.

“The OSC opinion does not contemplate the debt being owed to the candidate,” he said. “It appears that even if these donations were used to pay down campaign debt, it would go to the candidate undermining the exception of the Hatch Act.”

Of the $8,800 in donations received this year, Mr. Gustoff said he’s used $728 of it to pay down lingering debts — including $500 to reimburse the law firm owned by Mr. Gustoff and Mr. Whitaker for space rented by the campaign.

Mr. Gustoff said he had already made the maximum contribution to Mr. Whitaker’s Senate campaign, so offering free rent would have been an illegal donation. Instead, the campaign carried the rent on the books as debt.

“This speaks to our level of integrity, that we kept the rent payment on our books until money came in to pay it,” Mr. Gustoff said.

The remaining $228 was used to reimburse for “data services,” which Mr. Gustoff said were ads purchased on Facebook.

The 2001 OSC ruling does impose one limit on raising funds to retire campaign debt: a government employee cannot actually solicit donations, though he can accept them.

There is no evidence that Mr. Whitaker solicited the four campaign donations.

Mr. Gustoff said that he has also avoided soliciting contributions, but admitted that makes comments to people “in passing” that the campaign is still open because of the debt.

“I say it as a joke,” he said. “I tell people ‘I’m still the treasurer of a campaign that ended four years ago.’”

He said he doesn’t know the motives of the four donors who contributed earlier this year and said he has not spoken to Mr. Whitaker about the donations.

The four donors are well-known business heavyweights in Iowa. Gary Kirke, who owns casinos in Iowa, donated $2,600. His business partner, Michael J. Richards, donated the same amount a few days later. Cameron Sutton, a retired Iowa insurance executive, and attorney Leon Shearer also made donations.

“Other than to say the donation was good and legal, I don’t care to say why I made the donation,” Mr. Shearer told the Times.

The other three contributors did not return multiple calls requesting comment.

One other potential pitfall for Mr. Whitaker is whether repaying a debt to himself could violate a ban on federal employees accepting gifts.

A gift is defined by the United States Office of Government Ethics as anything that has “monetary value.”

Since Mr. Whitaker is the person who is owed the money by the campaign, any donation to retire that debt could be viewed as giving money directly to him, experts said.

“As long as you receive something of value, you could be in violation of the gift rule,” said John Knapp, an attorney who advises on campaign finance and election law. “Reduction in indebtedness something of value. I was kind of surprised the reporting on Whitaker didn’t get into that area.”

Mr. Gustoff said that’s one reason he’s only tapped the new cash to pay others, and hasn’t paid put anything to Mr. Whitaker yet.

Ms. Mitchell said he doesn’t have to worry. She said since the money is already owed to Mr. Whitaker as a campaign debt and disclosed on an FEC filing, it’s not a gift violation.

“He is owed that money so it’s not a gift,” she said. “His treasurer does not need to worry about reimbursing him.”

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide