Federal Indictment of Steve Bannon Shines Spotlight on Nonprofit Fraud
(Image: Construction on the Border Wall, U.S. Customs and Border Protection)
Steve Bannon—Donald Trump’s former advisor and campaign boss—has been charged with defrauding donors as part of an investigation into a fundraising campaign that claimed to raise money to help build Trump’s proposed border wall.
The federal indictment claims that Bannon and three other defendants used millions of dollars funneled through a charity registered to Bannon’s name for personal expenses ranging from luxury travel to cosmetic surgery. The fund raised more than $25 million. Federal prosecutors allege that Bannon received more than $1 million, much of which he used to cover personal expenses.
The White House claims that the Trump Administration had nothing to do with the fundraising initiative, though Donald Trump Jr. attended an event sponsored by the We Build the Wall campaign in 2019.
Federal prosectors also brought charges against three others in the case: Brian Kolfage, Andrew Badolato, and Timothy Shea. Kolfage launched the We Build the Wall campaign through GoFundMe in December 2018.
This isn’t the first time that a charity associated with Trump’s inner circle has been in hot water. In 2018, the state of New York ordered the Trump Foundation to dissolve and distribute its remaining assets to nonprofits. Investigators found that the foundation had engaged in decades of questionable practices, including the use of foundation funds to purchase expensive art for Trump properties.
Nonprofit fraud hurts the sector as a whole. By treating charities like personal slush funds, fraudsters damage donor trust and—as a result—decrease the likelihood that victims of fraud will donate to charitable causes in the future.