The following is part of an op-ed by David Firestone in The New York Times:
The scheme Mr. Santos is charged with is so flagrant, so spectacularly dumb in both conception and execution, that Justice clearly decided it had a no-brainer of a case. If Mr. Santos had structured an improper political money stream the way the grown-ups do every day, he might have gotten away with it.
The additional counts in the indictment — that Mr. Santos defrauded the unemployment insurance system and that he lied to the House about his finances — are embarrassing enough that his Republican colleagues should kick him back to Long Island, though they won’t because Speaker Kevin McCarthy needs every vote he can get these days. But the centerpiece of the indictment is a wire-fraud scheme in which Mr. Santos is accused of raising money for his campaign and then using it on a spending spree that included luxury clothing, car payments and other items on his personal credit card.
According to the indictment (Mr. Santos pleaded not guilty to all charges), he told donors they could support his campaign by giving money to a tax-exempt “social welfare organization,” known by its I.R.S. designation as a 501(c)(4). . . .
Many 501(c)(4) groups claim a large amount of “overhead” in their spending; crucially, it’s rarely itemized and therefore escapes close scrutiny, according to Saurav Ghosh, the director of federal campaign finance reform at the nonprofit Campaign Legal Center. Mr. Santos might have gotten away with a lot of dubious spending in that category without anyone knowing.
But Mr. Santos didn’t structure his fraud the usual way, according to the indictment. Instead, the government said, he set up a regular business and falsely told donors that it was a 501(c)(4). That company, which The New York Times says appears to be RedStone Strategies, had nothing to do with supporting Mr. Santos’s campaign but everything to do with supporting his bank account. He “converted most of those funds to his own personal benefit,” the indictment says, and didn’t even go through the usual procedural sham of registering the social welfare group with the I.R.S., which is not exactly difficult to check.
Nor did he use his so-called leadership PAC to raise money for personal expenses, which more sophisticated politicians do all the time to buy expensive clothes, luxury vacations and country club memberships.
Instead of exploiting existing political loopholes, he just took the cash with all the finesse of a Long Island pump-and-dump operation, leaving a pathetically obvious paper trail for federal investigators to follow. . . .
The government says it has emails, text messages and telephone records showing that Mr. Santos knew the company wasn’t a legitimate social welfare or political group but told donors that it was and that the money they wired to him would be used for advertising. And it said the records show that he directed the contributions to be wired to his bank account. Apparently it didn’t occur to him that wire transfers can be traced and that using them illegally is a federal offense.
As Mr. Ghosh noted, even if RedStone had been a legitimate 501(c)(4), Mr. Santos would not have been permitted to solicit money for it, since the groups are legally required to be independent of political campaigns. . . .
This time, at least, the government used its enforcement power. But only because Mr. Santos so audaciously disregarded the rules.
