Most of the money spent by the senator’s presidential campaign has gone to newly formed companies whose addresses are Staples stores in suburban strip malls.
Senator Tim Scott of South Carolina has more political money than most of his Republican presidential rivals, and he has not been shy about spending it.
Where that money is ultimately going, however, is a mystery.
Mr. Scott entered the 2024 race with a war chest of $22 million, and his campaign raised $5.8 million from April through June. In that same time, he laid out about $6.6 million, a significant clip — but most of it cannot be traced to an actual vendor.
Instead, roughly $5.3 million went to two shadowy entities: newly formed limited liability companies with no online presence and no record of other federal election work, whose addresses are Staples stores in suburban strip malls. Their minimal business records show they were set up by the same person in the months before Mr. Scott entered the race.
Masking the companies, groups and people ultimately paid by campaigns — effectively obscuring large amounts of spending behind businesses and convoluted consulting arrangements — has become common, as political candidates and organizations test the limits of campaign finance law.
Federal law requires campaigns to disclose their spending, including itemized details of their vendors, as a safeguard against corruption and in the interest of transparency. But as in many aspects of campaign finance law, campaigns have found workarounds, and the body that oversees such regulations, the Federal Election Commission, is perpetually hamstrung by partisan deadlock.
Campaign finance experts said that among increasingly brazen moves by political candidates, Mr. Scott’s new financial disclosures stood out as exhibit A.
“This practice completely undermines the federal campaign finance disclosure requirements,” said Paul S. Ryan, a campaign finance expert. “The public has a right to know how political committees are spending donor dollars.”
Matt Gorman, a senior communications adviser for the Scott campaign, said: “These are independent companies we contract with to provide services to the campaign including managing multiple consultants. Payments to those companies are disclosed like all others on our F.E.C. report.”
The F.E.C. has allowed committees to not itemize subvendor payments when those payments are an extension of the original vendor’s work. But in recent years, this interpretation of the law has widened into a gaping loophole that campaigns are exploiting. Experts say it is illegal for campaigns to pay campaign staff members through limited liability companies, or for vendors to serve merely as conduits to hide the ultimate recipient of campaign money.
In recent years, the F.E.C., whose six commissioners are deadlocked between the parties three to three, has essentially allowed campaigns to get away with minimal disclosures.
A spokeswoman for the commission declined to comment.
Indeed, while the use of limited liability companies by Mr. Scott’s campaign is striking in its scale, it is not unique among Republican presidential candidates.
The campaign of Gov. Ron DeSantis of Florida made two payments last quarter, totaling more than $480,000, for “travel” to a company in Athens, Ga. The company was set up around the time he entered the race, and lists Paul Kilgore — a Republican political operative — as a manager.
Neither Mr. Kilgore nor the DeSantis campaign responded to requests for comment.
Former President Donald J. Trump’s 2020 campaign was the subject of litigation over its use of limited liability companies run by campaign staff and family members that were allegedly conduits for hundreds of millions of dollars of spending. His campaign defended the practice, saying the intermediary companies were acting as the primary vendors.
“The idea of disclosing payments in this way defeats the whole purpose of campaign finance disclosure law,” said Saurav Ghosh, a former F.E.C. lawyer and the director of federal campaign finance reform for the Campaign Legal Center, a nonprofit campaign ethics group that sued the F.E.C. over the 2020 Trump campaign’s actions.
He added, “It’s been a problem for a while, but like most that go on unaddressed, it has a tendency to get worse, and I think this one is getting worse.”
According to F.E.C. filings last week, the Scott campaign made $4.3 million in payments from April 1 to June 30 to a company called Meeting Street Services L.L.C. The money included $2.8 million for “placed media” and more for digital fund-raising, strategy and video production.
Meeting Street Services has no online presence, and has not been paid by any other campaign, records show. Its listed address, in North Charleston, S.C., is a Staples store. Records show that the company was set up in Delaware in August 2022, and its incorporation documents list only one name — Barry M. Benjamin — as an authorized representative.
According to business records in South Carolina, the company is managed by AMZ Holdings L.L.C., a company set up in May 2021 and based at the same Staples store in North Charleston. AMZ’s Delaware incorporation documents were also signed by Mr. Benjamin.
Mr. Scott’s campaign did not provide information about Mr. Benjamin or further details about the companies. Efforts to independently determine Mr. Benjamin’s identity were unsuccessful.
There are several notable absences in the campaign’s second-quarter filing, including Targeted Victory, a major political fund-raising firm that has said it works for the campaign, and FP1 Strategies, a political advertising firm, which was also reportedly brought on by the campaign. Several people from the two firms who are working for the campaign also do not appear in the disclosure.
Mr. Scott’s use of Meeting Street Services L.L.C. predates his entry into the presidential race. In the last four months of 2022, his Senate campaign paid the company more than $4.5 million, filings show, for television ads, digital fund-raising and other consulting.
And his presidential campaign reported an additional $1 million spent with Meeting Street Services in the first quarter of this year, even though his campaign had not officially begun.
The Scott campaign also made more than $940,000 in payments last quarter to Advanced Planning and Logistics, a limited liability company set up in December 2022 — again, by Mr. Benjamin — and whose listed address is a Staples store in Fairfax, Va. The company received multiple payments for air travel and event production. Again, Mr. Scott’s campaign was the only campaign that paid the company.
In 2020, the Trump campaign reported paying hundreds of millions of dollars to two companies, one set up by a former campaign manager and the other by campaign officials.
Neither the campaign nor the companies themselves reported specifically what the money was being spent on.
The Campaign Legal Center filed a complaint to the F.E.C., accusing the Trump campaign of using the companies as “conduits” to conceal other vendors. The commission’s general counsel recommended that the F.E.C. find that the campaign had broken the law by misreporting payments, and begin an investigation into the Trump campaign’s relationships with vendors and subvendors.
But the commission deadlocked last year in a vote on the matter, which meant no action could be taken. The Campaign Legal Center sued the commission, but a federal judge — while expressing sympathy for the desire of transparency — dismissed the case late last year, saying that the commissioners had discretion.
“It is a lot easier to follow the money when you have a paper trail,” the judge opened his opinion.
The Campaign Legal Center has appealed.
Kitty Bennett contributed research.
Source: Elections - nytimes.com
