Three days after a 2019 fundraiser in Sahuarita in which Steve Bannon declared “100%†of donations would be used for a privately funded border wall, the former advisor to President Trump started illegally siphoning off more than $1 million, federal prosecutors said Thursday.
At the Sahuarita event on Feb. 8, 2019, Bannon told the Star that “100% of this money is going to build the wall and the legal fight†to get the wall built.
Instead, Bannon pulled $100,000 from the donations on Feb. 11 to “secretly pay†former ÃÛèÖÖ±²¥an Brian Kolfage, the head of the fundraising campaign who had pledged he wouldn’t take a penny of the $25 million raised from hundreds of thousands of donors.
In the following months, Bannon illegally pulled out more than $1 million of donated money, including $350,000 paid to Kolfage, federal prosecutors in New York said Thursday.
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Kolfage eventually used some of the money on home renovations, payments toward a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt.
Bannon was taken into custody on Thursday by the U.S. Postal Inspection Service on a 150-foot luxury yacht called Lady May off the coast of Connecticut, authorities said. The vessel is owned by exiled Chinese billionaire Guo Wengui and currently for sale for nearly $28 million, the Associated Press reported.
Both Bannon and Kolfage, a onetime UA student and veteran who was severely wounded in Iraq, were indicted on charges of conspiracy to commit wire fraud and conspiracy to commit money laundering.
Also charged were Andrew Badolato and Timothy Shea, the owner of an energy drink company called Winning Energy. The company’s cans feature a cartoon superhero image of Trump and claim to contain “12 oz. of liberal tears.â€
“This case should serve as a warning to other fraudsters that no one is above the law, not even a disabled war veteran or a millionaire political strategist,†Philip R. Bartlett, inspector-in-charge of the New York Field Office of the U.S. Postal Inspection Service, said in a news release Thursday.
At his hearing in Manhattan federal court, Bannon had his hands cuffed in front of him while a large, white mask covered most of his face, the Associated Press reported. He rocked back and forward as he sat on a chair in a holding cell, from where he appeared via video as his lawyers were on the telephone. He was released on $5 million bail, secured by $1.75 million in assets.
At the Sahuarita event, Bannon took the stage at the Quail Creek Country Club alongside what he called the “MAGA original gangsters,†including immigration hardliners Kris Kobach, the former Kansas Secretary of State, and Tom Tancredo, a former Republican congressman from Colorado, to raise money for the We Build the Wall group.
Among the donors at the event was Ron Poedtke, an 83-year-old Quail Creek resident and Trump supporter who told the Star he donated $100 because “we’ve got to protect our sovereignty.â€
After hearing about the indictment, “initially, I had a twinge of disappointment, but until such time as they have their trial and their say, I’m not going to condemn them,†Poedtke said Thursday.
He wondered if the indictment was a “ploy to make President Trump look bad ahead of the election.†However, “if this holds true, then yeah, shame on me,†Poedtke said.
Other prominent members of the We Build the Wall group, who did not attend the event in Sahuarita, included Erik Prince, founder of the controversial security firm Blackwater, and former major league baseball pitcher Curt Schilling. They were not named in the indictment.
On Thursday, Trump quickly distanced himself from Bannon while claiming he knew nothing about the project and never believed in a privately financed border wall.
“When I read about it, I didn’t like it. I said this is for government, this isn’t for private people. And it sounded to me like showboating,†he told reporters at the White House, adding that he felt “very badly†about the situation.
Last year, We Build the Wall constructed a half-mile of bollard-style border fence on privately donated land in New Mexico near El Paso, Texas. They used early construction to raise more cash and more private land donations in border states. They also provided a portion of the funds for several miles of wall along the Rio Grande near Mission, Texas, which already are showing signs of erosion just a few months after they were built.
The contractor for both private wall projects in Texas was Fisher Sand and Gravel, which was awarded $1.7 billion in contracts from the federal government to build border wall in Southern ÃÛèÖÖ±²¥.
Bannon worked at Biosphere 2 near Oracle in the 1990s. He also served in the Navy, worked as an investment banker at Goldman Sachs and as a Hollywood producer. When impeachment proceedings began against Trump, Bannon started hosting a pro-Trump podcast called “War Room.â€
A day before the indictment was unsealed, Kolfage was a featured guest on the show.
Fake invoices and vendors
The We Build the Wall group sprang from an online effort in December 2018 led by Kolfage to raise funds to build a wall along the U.S.-Mexico border.
The campaign raised more than $20 million from about 350,000 people before it was suspended. They formed a new organization, which required them to get donors to “opt-in†and allow their previous donations to be used by the new organization.
Between the start of the “opt-in†period in January 2019 and October 2019, We Build the Wall raised about $25 million in new or opted-in funds, according to the indictment.
In text messages obtained by authorities, Badolato told Bannon that saying Kolfage would not be paid would become the “most talked about media narrative ever†because it “removes all self-interest taint†and “gives Brian Kolfage saint hood,†according to the indictment.
“In fact, Kolfage went so far as to send mass emails to his donors asking them to purchase coffee from his unrelated business, telling donors that the coffee company was the only way ‘he keeps his family fed and a roof over their head,’†according to the indictment.
Some donors wrote directly to Kolfage and said “they did not have a lot of money and were skeptical about online fundraising campaigns, but they were giving what they could because they trusted Kolfage would keep his word about how their donations would be spent,†according to the indictment.
They allegedly used a shell company to route payments from We Build the Wall by using “fake invoices and sham ‘vendor’ arrangements,†according to the indictment.
They allegedly agreed to covertly pay Kolfage “$100k upfront (and) then 20 (per) month,†according to messages obtained by authorities.
On Feb. 11, 2019, Bannon and Badolato used the nonprofit to pay Kolfage $100,000, according to the indictment.
Payments continued until October
Bank records showed We Build the Wall wired $250,000 to a nonprofit, which wired Kolfage $100,000 and $20,000 in each of the following two months. On tax forms, the group falsely stated the funds were payments to Kolfage’s wife for media work. Later payments in 2019 were made under the guise of “social media†work or “consulting.â€
The payments continued until October, when they learned from a financial institution they might be under criminal investigation, according to the indictment. At that point, they started using encrypted communications, stopped paying Kolfage, and removed any mention of the promise that Kolfage would not be paid from the We Build the Wall website. They added a statement to the website that Kolfage would be paid a salary starting in January 2020.
Bannon, Badolato and Shea “each received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used to pay for a variety of personal expenses, including, among other things, travel, hotels, consumer goods, and personal credit cards,†according to the indictment.
In a text message, Kolfage told Badolato “as far as [the public] know[s] no one is getting paid†and “salaries will never be disclosed,†according to the indictment.
Federal prosecutors asked a judge to order the defendants to forfeit any property or currency traced to the fraud, including a 2019 Jupiter Marine boat named “Warfighter†and a 2018 Land Rover. Prosecutors did not mention the wall projects in Texas in the forfeiture request.
Customs and Border Protection officials recently published a request for information to gauge interest among private groups in building sections of the border wall, including 40 miles of secondary wall near ÃÛèÖÖ±²¥ and 4 miles near Yuma. CBP is “currently evaluating the responses and next steps,†according to a July 28 statement from the agency.
CBP did not immediately respond to an inquiry from the Star about whether We Build the Wall would be eliminated from consideration.
Photos of the U.S. – Mexico border fence
U.S. – Mexico border near Douglas, Ariz.
A dog stands on a road commonly used by Border Patrol near Slaughter Ranch Museum Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A border monument on the Mexico side of the border seen east of Douglas Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
The San Bernardino National Wildlife Refuge sits on the U.S. side of the border with Mexico east of Douglas Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A bull and cow graze near the site of new wall construction east of Douglas Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
The border seen stretching from hills east of Douglas into the Guadalupe Mountains Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
Flowers grow around border fencing near the San Bernardino National Wildlife Refuge Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
Construction equipment set up at the site of new border wall construction on the US/Mexico border east of Douglas Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A Border Patrol tower on the hills east of Douglas Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
Memorials place on graves at Julia Page Memorial Park in Douglas which sits along the U.S./Mexico border Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A car drives through Douglas on a road parallel to the U.S./Mexico border wall Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
The Slaughter Ranch homestead Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A lake on the Slaughter Ranch Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
A toy rocking horse placed on the side of East Geronimo Trail with a sign advertising five minute pony rides for 25 cents Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
Highway 2 in Mexico winds its way to Agua Prieta Thursday, Sept. 27, 2019.
U.S. – Mexico border near Douglas, Ariz.
The vehicle in a ditch was driven through the international border fence in Agua Prieta, Mex., into Douglas, ÃÛèÖÖ±²¥ in July 1987.
U.S. – Mexico border near Douglas, Ariz.
Mexican citizens run back into Agua Prieta, Mexico through a hole in the border fence at Douglas, Ariz., after the U.S. Border Patrol scared them back across the border in 1997.
U.S. – Mexico border near Douglas, Ariz.
The Raul Hector Castro Port of Entry on May 1, 2018, in Douglas, Ariz.
U.S. – Mexico border near Douglas, Ariz.
The Douglas, Ariz., border crossing in 1968.
U.S. – Mexico border near Lochiel, Ariz.
U.S./Mexico border fencing next to a old church building in Lochiel Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
Old border posts line the U.S./Mexico line near Lochiel Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
A Soal Off Roading sticker placed on a U.S./Mexico border post near Lochiel Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
Mountains in Santa Cruz County seen from Duquesne Road between Nogales and Lochiel seen Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
A monument in Lochiel marking where Fray Marcos De Niza entered ÃÛèÖÖ±²¥ Tuesday, Oct. 1, 2019.Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
Brothers Ramon and Ed De La Ossa mend fencing on their family's ranch in Lochiel after moving cattle Tuesday, Oct. 1, 2019. The ranch which used to span both sides of the U.S./Mexico border has been in the family for three generations.
U.S. – Mexico border near Lochiel, Ariz.
Ed De La Ossa mends fencing on his family's ranch in Lochiel Tuesday, Oct. 1, 2019. The ranch which used to span both sides of the U.S./Mexico border has been in the family for three generations.
U.S. – Mexico border near Lochiel, Ariz.
Ed De La Ossa moves cattle on his family's ranch in Lochiel Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Lochiel, Ariz.
U.S. Customs inspector Helen Mills, right, greets Mexican counterpart Raymundo Aguirre Castillo at the U.S. - Mexican border station at Lochiel, Ariz., in 1979.
U.S. – Mexico border near Lochiel, Ariz.
The US Customs building, right, at Lochiel, Ariz., is just a short distance away from the international border in May 1972. For ten years, Mills has been managing the port of entry, which is mostly made up of five houses, a school and an vacant church, inspecting vehicles as they head into the US. During the week, from Monday through Saturday, Mills opens the border gate from 8 am to 10 am and from 4 pm to 6 pm. On Sunday the gate is open from 8 am to 6 pm. In that time barely a dozen vehicles make their way across the border but it is a major convenience to the local residents.Â
U.S. – Mexico border near Nogales, Ariz.
Pedestrians walk to the Nogales port of entry Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Nogales, Ariz.
A pedestrian walks across North Grand Avenue in Nogales near the U.S./Mexico port of entries Tuesday, Oct. 1, 2019.
U.S. – Mexico border near Nogales, Ariz.
U.S. Customs and Border Protection officer R. Hernandez uses a density-measuring device on the rear quarter-panel of a Mexico-bound passenger vehicle at the DeConcini Port of Entry on Nov. 2, 2016, in Nogales, Ariz.
U.S. – Mexico border near Nogales, Ariz.
A Customs and Border Protection officer makes a visual check of a man's identification at the DeConcini Port of Entry on Feb. 15, 2017, in Nogales, Ariz. Busts of fraudulent border-crossing documents and the use of someone else's documents plummeted in ÃÛèÖÖ±²¥ and the rest of the border in the past decade.
U.S. – Mexico border near Nogales, Ariz.
Northbound commercial truck traffic lined up for inspection at the Mariposa Port of Entry on March 28, 2017, in Nogales, Ariz.
U.S. – Mexico border near Nogales, Ariz.
In the commercial lanes a semi truck stops between the lanes looking for the first available opening at the Mariposa Port of Entry in 2015.
U.S. – Mexico border near Nogales, Ariz.
Javier Castillo inspects a north-bound Mexican tractor-trailer at the ÃÛèÖÖ±²¥ Department of Transportation's inspection facility at the Mariposa Port of Entry on Sept. 19, 2017, in Nogales, Ariz. ADOT's International Border Inspection Qualification program, led by ADOT's Border Liaison Unit, teaches commercial truck drivers what to expect during safety inspections when they enter ÃÛèÖÖ±²¥ ports of entry.
U.S. – Mexico border near Nogales, Ariz.
A Border Patrol truck parked near the commercial port of entry in Nogales.
U.S. – Mexico border near Nogales, Ariz.
An illegal alien scales the U.S.-Mexico fence back toward Sonora after a Nogales Police Department officer, right, spotted him west of the Mariposa Port of Entry, Nov. 15, 2018, in Nogales, Ariz.
U.S. – Mexico border near Nogales, Ariz.
Kory's, a store catering to wedding, quincea–era and formal gowns, located at 15 N Morley Ave, Nogales, Ariz., sits katty corner to the Morley Gate Border Station on January 30, 2019.
U.S. – Mexico border near Nogales, Ariz.
Sun shines through the U.S.-Mexico bollard fence west of the Mariposa Port of Entry, Nov. 15, 2018, in Nogales, Ariz.
U.S. – Mexico border near Nogales, Ariz.
Children from Nogales, Sonora, climb through a hole in the international border fence to trick-or-treat in Nogales, ÃÛèÖÖ±²¥, on Halloween in 1987.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Border monument #166 is seen on the right as construction continues on the new 30-foot tall bollard fence that replaces old U.S./Mexico border fence two miles east of the Lukeville, ÃÛèÖÖ±²¥ port of entry on October 8, 2019. Photo taken from Sonoyta, Sonora, Mexico.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Construction continues on the new 30-foot tall bollard fence along the U.S./Mexico border two miles east of the Lukeville, ÃÛèÖÖ±²¥ port of entry on October 8, 2019. Photo taken from Sonoyta, Sonora, Mexico.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A Mexican worker rides his horse along a road south of the U.S./Mexican border wall on his way back into Sonoyta Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
New paneling of border wall seen about three miles east of the Lukeville/Sonoyta port of entry seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Old mesh paneling is removed in preparation for new wall to be built about three miles east of the Lukeville/Sonoyta port of entry seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A construction worker prepares cables to lift a piece of the 30-foot tall bollard fence along the U.S./Mexico border fence two miles east of the Lukeville, ÃÛèÖÖ±²¥ port of entry on October 8, 2019. Photo taken from Sonoyta, Sonora, Mexico.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Border Patrol Officers to the side of a worksite about three miles east of the Lukeville/Sonoyta port of entry where new border wall is being installed seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Old wall east of the Lukeville/Sonoyta port of entry seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Raised wall east of the Lukeville/Sonoyta port of entry seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A work site east of the Lukeville/Sonoyta port of entry seen from the Mexico side of the border line Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Normandy fencing placed against a section of border fence west of Lukeville Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A semi passes by Quitobaquito Springs as it drives along Highway 2 in Mexico Wednesday, Aug. 28, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
An area referred to as "flood gate" along the U.S./Mexico border near Sasabe, Ariz. is on the list of the Department of Homeland Security’s priorities for building a border wall, but no funding has been allocated yet. September 16, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
Vehicle barriers mark the U.S./Mexico border within the Buenos Aires National Wildlife Refuge in Sasabe, Ariz. on September 16, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A portion of the U.S./Mexico bollard border fence ends on the right and vehicle barriers begin within the Buenos Aires National Wildlife Refuge in Sasabe, Ariz. on September 16, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
A U.S. Customs and Border Protection Integrated Fixed Tower, left, near Sasabe, Ariz. on September 16, 2019.
U.S. – Mexico border near Sasabe and Lukeville, Ariz.
The new 30-foot tall bollard fence that replaced old U.S./Mexico border fence can be seen on the left. It's located about miles east of the Lukeville, ÃÛèÖÖ±²¥ port of entry on October 8, 2019. Photo taken from Sonoyta, Sonora, Mexico.
U.S. – Mexico border near San Luis, Ariz.
A US Border Patrol vehicle seen next to a section of new 30 foot high wall along the US/Mexico border near the commercial port of entry in San Luis Thursday, Aug. 8, 2019.
U.S. – Mexico border near San Luis, Ariz.
Old fencing is taken down along the United States/Mexico border seen from the northern end of San Luis, Mexico, Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
A security guard stand in a construction site where a new fence will be placed on the United States/Mexico border seen from the northern end of San Luis, Mexico, Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
Old fencing against new fencing along the United States/Mexico border seen from the northern end of San Luis, Mexico on Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
Crews prepare ground for a new fence to be placed on the United States/Mexico border seen from the northern end of San Luis, Mexico on Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
Vehicles in line to enter the United States from San Luis, Mexico on Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
New fencing along the United States/Mexico border seen from the northern end of San Luis, Mexico on Aug. 7, 2019.
U.S. – Mexico border near San Luis, Ariz.
A new section of fencing on the U.S. - Mexico border in California, just west of Yuma, Ariz., in 1993.
U.S. – Mexico border near San Luis, Ariz.
Sand drifts through the "floating fence" that marks the border running through the dunes, Wednesday, July 25, 2018, west of San Luis, Ariz.
U.S. – Mexico border near San Luis, Ariz.
A sign warns of the dangers of trying to swim the All-American Canal just north of the Mexican border, Wednesday, July 25, 2018, west of San Luis, Ariz.
U.S. – Mexico border near San Luis, Ariz.
A long string of lights illuminate the no-man's land between the triple fencing of the Mexican border, Wednesday, July 25, 2018, San Luis, Ariz.
U.S. – Mexico border near San Luis, Ariz.
The border fence comes to an abrupt end at the currently dry Colorado River, Thursday, July 26, 2018, west of San Luis Rio Colorado, Sonora.
The Associated Press contributed to this report. Contact reporter Curt Prendergast at 573-4224 or cprendergast@tucson.com or on Twitter
@CurtÃÛèÖÖ±²¥Star.
Curt Prendergast
Editor
