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Illustration: Sarah Grillo/Axios

Federal regulators are probing financial reporting discrepancies stemming from an effort to funnel $75 million through state Republican parties to the national GOP effort to reelect Donald Trump, Axios has learned.

Why it matters: In comments to Axios and filings with the Federal Election Commission, some state party officials seemed unaware of their roles.

What they’re saying: "I am not sure what report your (sic) looking at please point me toward it or forward the link to it to me," Vermont GOP chair Deb Billado told Axios when asked about nearly $400,000 sent to the state party by the Trump Victory joint fundraising committee last year and immediately routed to the RNC.

  • The Vermont GOP disclosed those transfers in its FEC filings, as required. But Billado said in an email the state party had "not interfaced with other states nor the national RNC on fundraising.” She did not respond to subsequent questions about how such large transfers could have taken place without her knowledge.
  • The FEC asked the Republican Party of New Mexico last month to explain why it initially failed to report more than $550,000 in payments in September from Trump Victory and to the RNC. The state party replied it wasn’t until about six weeks after the fact that “information was received” regarding those transfers.
  • The Hawaii Republican Party amended multiple FEC filings in February to note for the first time that it was a Trump Victory beneficiary — and to disclose nearly $1.7 million it received months earlier and immediately passed on to the RNC. It hasn’t responded to the FEC’s request for a more detailed explanation.

The intrigue: It’s not clear mechanically how such large transfers could have taken place without explicit buy-in from state parties ostensibly responsible for them.

  • One clue might lie with the Hawaii GOP. In addition to noting its Trump Victory participation, it told the FEC in February it had a previously undisclosed bank account — not in Hawaii, but at Chain Bridge Bank in McLean, Va.
  • That same bank is used by the RNC, Trump Victory and other GOP state parties.
  • In making its acknowledgment, the Hawaii party told the FEC the bank account was “associated” with Trump Victory. Acting state party chair Boyd Ready would not speak on the record about the nature and use of the account.

The big picture: Trump Victory made 260 disbursements to the state parties last year, totaling more than $75 million. In every case, the state parties — usually on the same day — passed on the precise sums they’d received to the RNC.

  • The RNC says the transfers were fully above board. "We only accept and disburse contributions in accordance with the law, and the RNC was proud to have invested more in our state parties last cycle than ever before," a committee official told Axios.
  • It’s a tactic pioneered by the Democratic National Committee during Hillary Clinton’s 2016 campaign. And it’s legal, as long as the state parties actually take control of the funds before sending it to their national affiliate.
  • A Biden joint fundraising committee also engaged in some similar transfers last year, though not in as large or comprehensive a fashion as Trump Victory.

How it works: After locking up the 2016 Republican nomination, Trump set up Trump Victory, a joint fundraising committee designed to raise funds for his campaign, the RNC and 11 state Republican parties.

  • Joint fundraising committees like Trump Victory can “stack” contribution limits for each campaign or party organ for which they raise money.
  • For example, if a JFC benefits three campaigns, an individual donor can give three times the maximum contribution it could provide to a single candidate. The JFC then distributes the money evenly to its three beneficiaries.
  • By the 2020 election, Trump Victory had 48 beneficiaries: the RNC, the Trump campaign and 46 state parties. The annual contribution limit to the group was a whopping $817,800, or the combined total of allowable donations to each of those 48 entities.
  • State parties can donate unlimited sums to the national party. By routing all of their Trump Victory receipts back to the RNC, the latter could keep far more of the JFC haul than contribution limits would normally allow.

The bottom line: Critics have used terms like “laundering” to describe the tactic. But the FEC has never agreed to pursue an investigation of the practice, even when Trump Victory itself faced similar questions after the 2016 election.

  • Hit with an FEC complaint in 2017, state Democratic parties that routed $92 million to the DNC insisted they had controlled the money and passed it along to the national party of their own accord.
  • The FEC's general counsel, citing a fact pattern nearly identical to Trump Victory transfers last year, called those claims "not credible" and recommended the FEC investigate.
  • The commission deadlocked, effectively blocking the probe.

Go deeper

Apr 10, 2021 - Politics & Policy

Scoop: Ohio Senate candidate Josh Mandel escorted out of RNC retreat

Ohio Republican Senate candidate Josh Mandel. Photo: Chris Maddaloni / Getty Images

During this weekend’s highly anticipated donor retreat hosted by the Republican National Committee in Palm Beach, Ohio Senate candidate Josh Mandel was escorted off the premises while his primary opponent, Jane Timken, was allowed to stay, two sources with direct knowledge of the situation tell Axios.

What we’re hearing: The invitation-only event is taking place at the Four Seasons Resort, and the RNC reserved the entire hotel. While Timken, former Ohio GOP chair, was invited to the event “because she is a major donor” — Mandel was not, so he was asked to leave, according to one of the sources.

Bernie Sanders: U.S. must recognize that "Palestinian rights matter"

Sen. Bernie Sanders. Photo: Stefani Reynolds via Getty Images

The United States must encourage an immediate cease-fire in the Middle East and adopt an "evenhanded approach" that recognizes Palestinians and Israelis have a right to "live in peace and security," Sen. Bernie Sanders (D-Vt.) wrote in a New York Times opinion on Friday.

Driving the news: Violence escalated this week after Israelis intensified efforts to evict Palestinians from their homes in Jerusalem. Hamas fired rockets and Israel massed troops, leaving more than 125 Palestinians and seven people in Israel dead.

2 hours ago - Technology

Exclusive: Uber makes new hire, launches anti-racism campaigns

Illustration: Aïda Amer/Axios

Eager to show progress on the pledge to make its platform and business anti-racist, Uber on Friday announced new anti-racism driver and rider campaigns, as well as fresh internal hiring practices, Axios was first to report.

Why it matters: Uber is one of the biggest ride hailing companies in the world. Its decisions impact the millions that use the platform, where drivers and riders alike say they have experienced racism.