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October 31, 2011 12:30 PM The other Cain scandal of the day

By Steve Benen

Allegations that Herman Cain sexually harassed two women in the 1990s is causing his campaign plenty of heartburn today. The Republican candidate ran to — where else? — Fox News this morning and conceded he’d been accused of harassment, but the allegations were “trumped up” and “totally false.” He wouldn’t, however, speak to the financial settlement the women received.

The basics of the Politico article, then, appear to be true — Cain was accused of misconduct and the women who made the accusations accepted settlements.

That’s the main Cain controversy of the day. There is, however, another one, and this other controversy points to possible campaign-finance irregularities

Herman Cain’s two top campaign aides ran a private Wisconsin-based corporation that helped the GOP presidential candidate get his fledgling campaign off the ground by originally footing the bill for tens of thousands of dollars in expenses for such items as iPads, chartered flights and travel to Iowa and Las Vegas — something that might breach federal tax and campaign law, according to sources and documents.

Internal financial records obtained by [the Milwaukee Journal Sentinel’s Daniel Bice] show that Prosperity USA said it was owed about $40,000 by the Cain campaign for a variety of items in February and March. Cain began taking donations for his presidential bid on Jan. 1.

Prosperity USA was owned and run by Wisconsin political operatives Mark Block and Linda Hansen, Cain’s current chief of staff and deputy chief of staff, respectively.

This looks awfully bad for Team Cain. The report points to evidence that two of Cain’s top aides set up a now-defunct non-profit entity that illegally financed the campaign, effectively helping it get off the ground. There’s nothing in FEC filings to suggest the campaign ever paid Prosperity USA back for the substantial funds it spent on Cain’s behalf.

“If the records accurately reflect what occurred, this is way out of bounds,” said a Washington, D.C.-based election lawyer who advises many Republican candidates and conservative groups on campaign issues. The lawyer asked not to be identified because of those affiliations.

Michael Maistelman, a Wisconsin campaign attorney, agreed. “The number of questionable and possibly illegal transactions conducted on behalf of Herman Cain is staggering,” said Maistelman, a Democrat who has represented politicians from both parties on campaign issues.

The unnamed Republican expert on elections law concluded, “I just don’t see how they can justify this. It’s a total mess.”

Keep in mind, even post-Citizens United, a corporation cannot simply give a candidate tens of thousands of dollars. Indeed, even if it was a loan — which has not yet been paid back — as Ian Millhiser explained, that would be illegal, too.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • c u n d gulag on October 31, 2011 12:35 PM:


    What do you mean the extra toppings weren't free?

  • berttheclock on October 31, 2011 12:44 PM:

    Perhaps, Steve, you should dig a little deeper into the $15,000 settlement Block had to pay for illegal campaign violations. Of course, just after this, the Koch Brothers promoted him to run Americans for Prosperity-Wisconsin and, look at his involvement with Reince Preibus, then, head of the RepuGs in Wisconsin on their efforts to stop students from voting using a caging scheme. Prosperity USA is an offshoot of AforP and is funded by the Koch Brothers.

    Block reeks from High Heaven and it is not just the odor of cigarette smoke. As for Cain, there is the old saying that you are known by the company you keep.

  • Danp on October 31, 2011 12:44 PM:

    This isn't the first scandal for campaign contributions Cain has had in the last two weeks.

    http://tpmmuckraker.talkingpointsmemo.com/2011/10/herman_cain_campaigns_payments_to_his_own_company_okay_as_long_as_he_paid_fair_price.php

    It might be time to put a spotlight on the FEC, itself.

  • June on October 31, 2011 12:49 PM:

    Suffice it to say, this will not be a good week for Herman Cain. And it's a about time.

  • Joe Friday on October 31, 2011 12:50 PM:

    Wow.

    Cain pulls ahead of Willard in Iowa and it's, 'UNLEASH THE HOUNDS JEEVES' !

  • Fine Gold on October 31, 2011 12:55 PM:

    It's still possible to break campaign finance laws?

  • Anonymous on October 31, 2011 12:55 PM:

    Oh, now, there all you elitist libruls go again, with all this talk about "facts" and "law" and stuff.

    It's just like so-called "global warming." You and the librul-dominated media and the politically correct librul universities all plot to smear an honest hard-working Heartland American businessman with all this talk about "evidence" and "accounting' and other elitist stuff.

    Besides, there's two sides to every story, and a lie gets halfway around the world before the truth gets its boots on, and he's black so everyone knows who the REAL racists are!

    Also Hillarycare Kenyan gaymarriage, too!

  • zandru on October 31, 2011 12:57 PM:

    CEO Businessman's Attitude

    Simply put, what the CEO wants, the CEO gets. If something is "illegal", make them press charges. Fight them for as long as it takes - and make sure it takes a long time, because you have more resources than they do, and your corporate lawyers are on your payroll: you pay them the same whether they're in court or not, whereas all those "trial lawyers" the plaintiffs have are on the clock and won't be paid until the case is settled.

    If you ultimately lose in court, it's still all good if either you achieved what you wanted or the cost was less than you would have paid by obeying the law.

    But, in 99/100 cases, nobody will ever file suit. So do whatever maximizes the old 'ka-ching.'

  • Kathryn on October 31, 2011 1:19 PM:

    The Republican Party in Wisconsin is quite a cesspool isn't?

  • robert on October 31, 2011 1:22 PM:

    Not just in Wisconsin unfortunately.

  • robert on October 31, 2011 1:24 PM:

    Instead of campaigning against Republicans, Democratic Party should considered a RICCO civil action.

  • berttheclock on October 31, 2011 1:30 PM:

    @zandru, excellent points. So much is heard from the right about Trial Lawyers, not mentioning the fact few plaintiff attys can ever afford to take frivolous cases, put their own money for discovery and have to wait for a pay day for their efforts. Meanwhile, they never address those Trial Attorneys of the right who keep crooning, "Oh, those billable hours, those great big billable hours". I, once, knew a plaintiff's atty who prevailed in an railroad personal injury case, which he won, but, had to wait 7 years for the final ajudication by the California Supreme Court. Lots of Ka-chings on the defense side during that time, but, his pay day was long awaited.

  • Josef K on October 31, 2011 1:30 PM:

    Unless the DOJ is willing (and able) to quickly put a fraud and money-laundering case together - implausible but possible - I don't think this'll matter much to the campaign or derail Cain's toy train of a nomination.

    Again, the Republican base is now simply too rabid (and I'm not talking Rayman's Ravin' Rabbids here, although there are similarities) to care if their chosen savior broke the law or not. Heck, that's practically a badge of honor for these fools.

    At this point, unless he willingly bows out before the Convention, I can only see Cain carrying this silliness right to the convention floor. Gods help us all.

  • T. sebastian on October 31, 2011 1:54 PM:

    What kind of settlement agreement gags the complainants but allows Mr. Cain to accuse the women of making baseless claims, etc.?

  • Trollop on October 31, 2011 2:14 PM:

    Oopsie!

  • Michael on October 31, 2011 2:40 PM:

    Good Point, T.sebastian, I think if it was followed thru you might find something else stinking too...

  • Pete Moss on October 31, 2011 2:42 PM:

    Without discounting the sexual harassment story now coming out about Herman Cain - Where is this story coming from? Politico is not known for it's incisive investigative reporting - Which campaign is feeding this story to politico.
    Is this the perry campaign desperately trying to claw it's way back by attacking Cain and hoping Cain voters come back to Perry or is it Romney's people trying to arrest Cain's momentum

  • exlibra on October 31, 2011 5:23 PM:

    Indeed, even if it was a loan which has not yet been paid back as Ian Millhiser explained, that would be illegal, too. -- Steve Benen

    A simple oversight, I'm sure. Any minute now, the RATS (Roberts, Alito, Thomas, Scalia) will kiss it better... er... close that loophole.

  • PQuincy on November 01, 2011 9:22 AM:

    The FEC will immediately begin a careful and comprehensive review of Cain's early campaign finance actions. The staff will try to collect information, but the Cain campaign will stonewall, and the matter will spend three years in the courts before the papers and e-mails will be turned over, except for a large number of gaps owing to "technical issues" and "computer failure." The staff review will continue, with four changes of lead investigator as different presidents appoint new commissioners, and will be complete in 2019, after which the commissioners will deadlock on a vote to override the staff report and start a new investigation, and the matter will be dropped.

    Welcome to American campaign finance law!

  • Subnumine on November 01, 2011 10:30 PM:

    Pete Moss suggests that this is one of the other Republican campaigns dissing Cain. If true, so what? That's the way the system is supposed to work; as Madison put it, ambition will counteract ambition.

    If he reveals their sleaze, so much the better. If the Republican primary is run from jail, we will at least get entertainment out of it.

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