Campaign finance improprieties at Team Cain?

posted at 12:45 pm on October 31, 2011 by Ed Morrissey

Herman Cain has been hit with two bad headlines today.  So far, the first — on allegations of improper conduct while helming the National Restaurant Association — has received almost all of the attention, even though the allegations are thus far vague and still anonymous.  However, the second headline might produce more headaches for the campaign, or at least their legal team, as the Milwaukee Journal Sentinel compares some financial records and comes up with a couple of serious allegations of its own:

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 No Quarter 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. …

It is not known if Cain’s election fund eventually paid back Prosperity USA, which now appears defunct. The candidate’s federal election filings make no mention of the debt, and the figures in the documents don’t match payments made by the candidate’s campaign.

In addition to picking up these expenses at least initially, Prosperity USA also paid as much as $100,000 to the Congress of Racial Equality, a conservative black organization, shortly before Cain was a featured speaker at the group’s annual Martin Luther King Jr. dinner in mid-January.

This could be a much bigger deal than the decade-plus-old settlements at the National Restaurant Association, but not for Cain himself as the earlier Politico story was, at least until Cain’s strong denial.  This would put Mark Block and Linda Hansen on the hot seat rather than Cain, probably in two different directions.  Prosperity USA was set up as a tax-exempt charitable organization, according to the MJS, which means it can’t contribute to or endorse specific candidates for office.  Yet records show that the group listed among its credits a series of debts from the Cain campaign, named Friends of Herman to this day. The IRS will be very interested in those transactions and might have to investigate Block, Cain’s current campaign manager.

That won’t be the only federal agency interested in these transactions.  The records obtained by the Journal Sentinel indicates that FOH owed Prosperity USA for chartered air travel in the amount of $17,000, and $3700 for iPads for the campaign that were purchased on January 4th of this year.  That would be significant, as those came almost three weeks after the press reported his intent to form an exploratory committee for the Presidency, and eight days before making the official announcement of the exploratory committee. (Interestingly, there doesn’t appear to be any paperwork on the FEC site for the exploratory committee; the first statement of organization I could find on the site for an official Cain committee was in May 2011, when Cain shifted from exploration to official candidacy.)

Candidate expenditures and contributions have to be precisely reported to the FEC, but there seems to be no record of any such transactions involving Prosperity USA.  The July quarterly report covers the period from the end of December to the end of June, according to the FEC’s records, but shows no records of receipts or disbursements involving Prosperity USA.  Either Block’s records at Prosperity USA were wrong, or the campaign failed to report some significant in-kind contributions, but either way, this seems to describe the matter perfectly:

The national election expert who works with GOP candidates said it would be a violation of the tax code for Prosperity USA to advance money to the Cain campaign for these items. She said there also are strict federal election regulations on reporting debts and incurring travel obligations.

“I just don’t see how they can justify this,” she said. “It’s a total mess.”

It certainly seems that way.  If it turns out to be true, I’d guess that it has a lot more to do with inexperience (and probably some incompetence) at Team Cain than any attempt to hide these transactions, which are very small potatoes in terms of their fiscal impact on presidential bids.  Romney, Paul, and Perry can raise more than $40,000 simply by waving at a camera, for instance.  But it’s another reminder that playing in the top tier means more scrutiny about everything, including funding and campaign management, and Cain had better prepare himself for that kind of attention.

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Well, like I have stated, his weakness is his organization, he grew faster than he could have imagined…
You need more than 6 people to run a campaign…

right2bright on October 31, 2011 at 12:49 PM

What’s with the Cain Pile-on?

Chip on October 31, 2011 at 12:49 PM

Cain, we hardly knew ye.

hanzblinx on October 31, 2011 at 12:50 PM

Talk to me when someone finally investigates Obama campaign donations.

txhsmom on October 31, 2011 at 12:51 PM

Compared to improprieties on the other side of the aisle??? Are you kidding me??

michaelo on October 31, 2011 at 12:51 PM

Candidate expenditures and contributions have to be precisely reported to the FEC

You bet they do.

Just ask the Obama ’08 campaign about that.

aquaviva on October 31, 2011 at 12:51 PM

He’s still a novelty act as far as I’m concerned, but obviously the base craves novelties.

Seth Halpern on October 31, 2011 at 12:52 PM

Obama raked in an estimated $150 million of unchecked and possibly illegal foreign contributions in 2008. His campaign suspended credit card checks on these donations. Blatant violation of FEC rules. No MSM stories at all.

rrpjr on October 31, 2011 at 12:52 PM

Cain, we hardly knew ye.

hanzblinx on October 31, 2011 at 12:50 PM

Romney pays more to have his skeletons buried.

portlandon on October 31, 2011 at 12:53 PM

As things are today for all those looking into all aspects of a candidate, it is just beyond stupid to think anyone(but bho?) could get away with anything than is not legal? Guess we will just to see how all this pans out. Good luck Cain.
L

letget on October 31, 2011 at 12:53 PM

What’s with the Cain Pile-on?

Chip on October 31, 2011 at 12:49 PM

Better now that in the general. I like Cain, but haven’t jumped aboard his train yet. I have been waiting for things like this to pop up and to see how he deals with them.

Kataklysmic on October 31, 2011 at 12:53 PM

oh geez…….

Drunk Report on October 31, 2011 at 12:54 PM

Cainization has begun…the LSM has decided who the Republican nominee should be and it is not Herman Cain…the establishment Repubs agree.

d1carter on October 31, 2011 at 12:56 PM

If these don’t work they will play the cancer card.

Cindy Munford on October 31, 2011 at 12:56 PM

What’s with the Cain Pile-on?

Chip on October 31, 2011 at 12:49 PM

Since when was reporting facts about a candidate and their campaign a “pile-on”?

NoStoppingUs on October 31, 2011 at 12:57 PM

You know, I was coming around to Cain, but if his big selling point is his executive experience in business, he’s got some serious management issues with his damn campaign.

I want to like him, but all the goodwill towards him now isn’t going to carry through the primary battles and general if his campaign team doesn’t improve.

Put your big boy pants on and run a campaign, otherwise we’re going to be left with no one to vote for in these primaries.

John_Locke on October 31, 2011 at 12:57 PM

Remember ‘No Controlling Legal Authority’?

Seven Percent Solution on October 31, 2011 at 12:58 PM

Since when was reporting facts about a candidate and their campaign a “pile-on”?

NoStoppingUs on October 31, 2011 at 12:57 PM

Since the candidate became the “true conservative” in the race.

John_Locke on October 31, 2011 at 12:58 PM

Has Doodad Pro donated to his campaign yet?

txhsmom on October 31, 2011 at 12:58 PM

A lot of excitement in the Liberal Media today.

pseudonominus on October 31, 2011 at 12:58 PM

If these don’t work they will play the cancer card.

Cindy Munford on October 31, 2011 at 12:56 PM

I’m pretty sure that one will backfire and not in a small way.

Kataklysmic on October 31, 2011 at 12:58 PM

How ’bout the entire Dallas Cowboy team?

Any Palestinian brothers?

txhsmom on October 31, 2011 at 12:59 PM

Cindy Munford on October 31, 2011 at 12:56 PM

It is probably a bit early for that? It might be the ace in the hole the d’s are holding on Cain? You can bet if Cain is our nominee, we will get 24/7 on his health?
L

letget on October 31, 2011 at 12:59 PM

More sloppy than significant.

Still, one of his selling points is said to be that he’ll be a superior micromanager of our economy, having supported TARP and being WSJ approved as suitably mainstream. If it turns out his campaign has sloppy bookkeeping, what does that say of the management bone fides?

FloatingRock on October 31, 2011 at 1:00 PM

Mark Block was a mistake, and I’m not surprised Cain’s hurting over it.

MadisonConservative on October 31, 2011 at 1:00 PM

Managerial genius…

JohnGalt23 on October 31, 2011 at 1:01 PM

Resistance is futile. He will be decimated. One way or another.

SouthernGent on October 31, 2011 at 1:02 PM

What’s with the Cain Pile-on?

Chip on October 31, 2011 at 12:49 PM

Seriously?!? To be Palinized is the way of the world these days….if you’re running for office you’d better be prepared.

tencole on October 31, 2011 at 1:02 PM

At least it wasn’t something really bad like removing all the security checks for online credit card donations. That would be illegal.

John Deaux on October 31, 2011 at 1:02 PM

You know, I was coming around to Cain, but if his big selling point is his executive experience in business, he’s got some serious management issues with his damn campaign.

John_Locke on October 31, 2011 at 12:57 PM

Well,..er….yeah. Herb, you can’t keep throwing off your back foot like the Denver Bronco’s quarterback.

a capella on October 31, 2011 at 1:03 PM

Talk to me when someone finally investigates Obama campaign donations.

txhsmom on October 31, 2011 at 12:51 PM

You’ll be talking to yourself before that happens.

tencole on October 31, 2011 at 1:03 PM

If it turns out to be true, I’d guess that it has a lot more to do with inexperience (and probably some incompetence) at Team Cain than any attempt to hide these transactions, which are very small potatoes in terms of their fiscal impact on presidential bids.

Mark Block is no amateur and his incompetence lies in his penchant for getting caught when he bungles a particularly convoluted fundraising shell-game or engages in the kind of voter suppression stunts that got him suspended from engaging in political activities for three years in Wisconsin. And no, it doesn’t matter the amount of money being talked about here is fairly inconsequential in the grand scheme of things. It isn’t the act itself, big or small, it’s the thinking behind the act. It’s clear Block is ethically challenged.

Cain has said one measure of his leadership is his ability to pick the right people for the right positions. The more I learn about Cain’s campaign manager, the less I like him and the more I wonder what Cain was thinking when he hired the guy. It’s one thing for Block to be a ruthless political operative. Ruthlessness is a desired trait in a campaign manager. It’s another thing entirely to skirt moral and legal boundaries. If Cain wants to win, Block needs to go. He’s a liability and–if he has any loyalty to Cain at all–should submit his resignation before the end of the week.

troyriser_gopftw on October 31, 2011 at 1:04 PM

Seriously?!? To be Palinized is the way of the world these days….if you’re running for office you’d better be prepared.

tencole on October 31, 2011 at 1:02 PM

It’s only a pile on because of the Politico story. The campaign finance story involves things that actually happened.

John_Locke on October 31, 2011 at 1:04 PM

Have to void the check I was writing to his campaign.

Southernblogger on October 31, 2011 at 1:04 PM

What’s with the Cain Pile-on?

Chip on October 31, 2011 at 12:49 PM

Have you seen the polls?

Steve Eggleston on October 31, 2011 at 1:05 PM

the LSM has decided who the Republican nominee should be and it is not Herman Cain…the establishment Repubs agree.

d1carter on October 31, 2011 at 12:56 PM

By George….I think he’s got it !!

Like Mark Levin says…..”we need to get Obama out of office…..then gop you’re next.”

tencole on October 31, 2011 at 1:06 PM

John_Locke on October 31, 2011 at 12:57 PM

Agreed.

rrpjr on October 31, 2011 at 1:07 PM

Since when was reporting facts about a candidate and their campaign a “pile-on”?

NoStoppingUs on October 31, 2011 at 12:57 PM

I’ll be ready with the shadenfreude when the presstitutes finally focus on Romney come May (when it’s officially too late to avoid the Republican version of John Kerry as the GOP nominee).

Steve Eggleston on October 31, 2011 at 1:08 PM

John_Locke on October 31, 2011 at 12:57 PM

Agreed.

rrpjr on October 31, 2011 at 1:07 PM

I second that.

tencole on October 31, 2011 at 1:09 PM

Mark Block is no amateur and his incompetence lies in his penchant for getting caught when he bungles a particularly convoluted fundraising shell-game or engages in the kind of voter suppression stunts that got him suspended from engaging in political activities for three years in Wisconsin. And no, it doesn’t matter the amount of money being talked about here is fairly inconsequential in the grand scheme of things. It isn’t the act itself, big or small, it’s the thinking behind the act. It’s clear Block is ethically challenged.

Cain has said one measure of his leadership is his ability to pick the right people for the right positions. The more I learn about Cain’s campaign manager, the less I like him and the more I wonder what Cain was thinking when he hired the guy. It’s one thing for Block to be a ruthless political operative. Ruthlessness is a desired trait in a campaign manager. It’s another thing entirely to skirt moral and legal boundaries. If Cain wants to win, Block needs to go. He’s a liability and–if he has any loyalty to Cain at all–should submit his resignation before the end of the week.

troyriser_gopftw on October 31, 2011 at 1:04 PM

Any links you want to share on Block? Haven’t heard any of this.

John_Locke on October 31, 2011 at 1:10 PM

I like Palin Cain, but she he has been too damaged by the media to run successfully against Obama.

RedRedRice on October 31, 2011 at 1:11 PM

This drip drip drip of stories are going to continue. People are now taking Cain seriously for the first time and now hes going to see what it feels like to be put through the ringer. Dont think he survives it.

nswider on October 31, 2011 at 1:11 PM

*** facepalm ***

This is bad. Way worse than the 15-year-old trumped-up sexual harrassment allegations. This goes to legality and tax evasion.

Anyone even flirting with a presidential run knows that you have a lot of laws to follow and you need a campaign finance lawyer before you even hire a campaign manager.

rockmom on October 31, 2011 at 1:12 PM

I bet Mark Block is smoking more and more these days.

Will Herman fire this man for being imperfect?

But 95 % of Americans are imperfect. That’s why we eat pizzas and not fruits and veggies. Herman accepts that.

So Block is a lucky man that he is not working for Church Lady Bachmann’s campaign right about now. Not that she really has a campaign anymore.

jimw on October 31, 2011 at 1:13 PM

This drip drip drip of stories are going to continue. People are now taking Cain seriously for the first time and now hes going to see what it feels like to be put through the ringer. Dont think he survives it.

nswider on October 31, 2011 at 1:11 PM

Not with a campaign like this he doesn’t.

John_Locke on October 31, 2011 at 1:16 PM

@John Locke

The AP story covering Block’s background is here

Another one here.

troyriser_gopftw on October 31, 2011 at 1:18 PM

HA, Herman cAin 24/7. There seriously is nothing else going on in the political world?

astonerii on October 31, 2011 at 1:20 PM

Block was running a Issue oriented group that took contributions to run ads that strangely happened to benefit the Candidate for the Wisconsin Supreme Court.

He was brought up on the kind of Sham charges of coordinating with a candidate’s campaign like the ones used against Tom Delay for manipulating around rules. That is hard to prove stuff.

Rather than defend himself, Block settled on a Nolo plea that admitted no guilt but agreed to an order to stay out of Wisconsin elections for the next 4 years, plus a small fine.

He probably also broke several speed limit laws on highways, but was never caught.

jimw on October 31, 2011 at 1:22 PM

He probably also broke several speed limit laws on highways, but was never caught.

jimw on October 31, 2011 at 1:22 PM

Umm

http://www.thesmokinggun.com/buster/herman-cain-campaign-manager-765419

As reported today in an AP story about Block’s “checkered past,” the 57-year-old political operative said he has twice been collared for drunk driving. While the story about Block makes it seem as if the busts occurred sometime after 2001, the above mug shots–with and without glasses–were snapped after he was arrested a decade earlier in Wisconsin for operating a motor vehicle while intoxicated

William Amos on October 31, 2011 at 1:23 PM

Block was convicted of two DUIs within three years, jimw. In my home state of Indiana, that’s a felony. Things must be different in Wisconsin.

troyriser_gopftw on October 31, 2011 at 1:24 PM

Looks like Cain is the new “PALIN”.

If the left AND THE RIGHT…!!! can keep him busy stopping the spin and B.S. he’ll be too busy to keep his poll numbers up.

It’s not going to work because at this point people are so sick of smear campaigns that Cain could have gone to prison for murder and he’ll continue to rise in the freakin’ polls!!!!!!

katy on October 31, 2011 at 1:26 PM

John_Locke on October 31, 2011 at 1:16 PM

Yeah no way, this is a very inexperienced group and it shows. They should have known this was coming.

nswider on October 31, 2011 at 1:27 PM

Who cares if Herman Cain can’t keep track of his campaign finances? Actually, if you think about it – this makes him MORE QUALIFIED to be President! Don’t listen to the LSM – they want to shoot Herman’s candidacy down! We can win this …

YES … WE … CAN!

/hermancaniac

HondaV65 on October 31, 2011 at 1:28 PM

Block was convicted of two DUIs within three years, jimw. In my home state of Indiana, that’s a felony. Things must be different in Wisconsin.

troyriser_gopftw on October 31, 2011 at 1:24 PM

In my home state of Texas cocaine use/possession is a felony – must be different in D.C. – especially if you’re a Soros funded un-vetted puppet.

ontheright on October 31, 2011 at 1:29 PM

The AP story covering Block’s background is here

Another one here.

troyriser_gopftw on October 31, 2011 at 1:18 PM

Many thanks. Interesting stuff.

John_Locke on October 31, 2011 at 1:32 PM

Herman Cain is not the ‘new Palin’, katy. He hired a shady campaign manager and at some point Block’s past was going to come up and bite the campaign. Block probably didn’t think Cain would come this far and invite this kind of in-depth examination–and neither did Herman Cain, frankly. The higher you go, the deeper they look. In Block’s case, the MSM didn’t have to look very hard, far, or deep.

troyriser_gopftw on October 31, 2011 at 1:33 PM

Have to void the check I was writing to his campaign.

Southernblogger on October 31, 2011 at 1:04 PM

Uh huh…

MeatHeadinCA on October 31, 2011 at 1:34 PM

HA, Herman cAin 24/7. There seriously is nothing else going on in the political world?

astonerii on October 31, 2011 at 1:20 PM

Well, we could always talk about how Palestinian terrorists get a Unesco seat – an org the US pays for >20% of.

MeatHeadinCA on October 31, 2011 at 1:35 PM

So maybe Nolo Contendre Block is like one of David’s mighty men who first came out to join him in the wilderness days because they were misfits.

They needed a strong leader, just like Block needs Cain.

Leadership is the KEY ingredient in society. Hmmm.

jimw on October 31, 2011 at 1:40 PM

But 95 % of Americans are imperfect. That’s why we eat pizzas and not fruits and veggies. Herman accepts that.

So Block is a lucky man that he is not working for Church Lady Bachmann’s campaign right about now. Not that she really has a campaign anymore.

jimw on October 31, 2011 at 1:13 PM

95% of Americans aren’t running for the most powerful office in the world.

Do you folks get that? This isn’t some little hide and seek game these guys are playing. You honestly want someone who “makes a few mistakes once in awhile because he’s just a little incompetent” in the White House? Don’t you see what happened with Obama?

NoStoppingUs on October 31, 2011 at 1:40 PM

Block was convicted of two DUIs within three years, jimw. In my home state of Indiana, that’s a felony. Things must be different in Wisconsin.

troyriser_gopftw on October 31, 2011 at 1:24 PM

It is. It took teeth-pulling to get the felony threshhold changed from 5 DUIs to 4.

Steve Eggleston on October 31, 2011 at 1:41 PM

Have to void the check I was writing to his campaign.

Southernblogger on October 31, 2011 at 1:04 PM

Dat’s da plan.
Let’s check it all out further than was done w/obama, an d go from there.
Lots of time.

pambi on October 31, 2011 at 1:44 PM

Dat’s da plan.
Let’s check it all out further than was done w/obama, an d go from there.
Lots of time.

pambi on October 31, 2011 at 1:44 PM

Not to take away from your perfectly fine point, but you do realize that Southernblogger is a shameless Perry shill that was practically dancing on a keg when finding out that Cain was being accused of being that dreaded, old, black male stereotype; right?

MeatHeadinCA on October 31, 2011 at 1:51 PM

If it turns out to be true, I’d guess that it has a lot more to do with inexperience (and probably some incompetence) at Team Cain than any attempt to hide these transactions

No doubt. I’d only ask that every time a Dem operative squawks about this that we counter with references to Doodad Pro and fundraisers in the Gaza Strip.

Buy Danish on October 31, 2011 at 2:05 PM

People keep bringing up the MSM’s lack of interest and/or active coverup of Obama’s largely unknown past and his personal and professional associations with people such as Tony Rezko, Bill Ayers, Bernadette Dorn, and Jeremiah Wright, as well as his association with ACORN and Chicago’s New Party. All of that is beside the point. The same lack of interest by the MSM would be true regardless of candidate if that candidate is a Democrat.

We in the GOP should hold a higher standard for office, one independent of any vetting done or not done by the MSM. If Cain’s campaign manager is a shady operator, then he is a shady operator and Cain’s decision to hire a shady operator brings his judgment into question. Even a novice to campaigning for a national political office should know not to play fast and loose with campaign finance laws and rules. Inexperience is no excuse. Excuses are for losers.

troyriser_gopftw on October 31, 2011 at 2:06 PM

I have tremendous respect for Herman Cain.

But issues involving campaign finance “improprieties” show how risky it would be to elect anybody who had never run for office before to be the Republican Nominee for President.

Neither Presidential Candidates nor Presidents can afford to rely on on-the-job training.

wren on October 31, 2011 at 2:09 PM

wren on October 31, 2011 at 2:09 PM

He has run for office before.

a capella on October 31, 2011 at 2:11 PM

MeatHeadinCA on October 31, 2011 at 1:51 PM

Thanks for that confirmation… I sorta figured that was so, but unsure.
Took the easy way out, so’s not to falsely accuse.
;-)

pambi on October 31, 2011 at 2:12 PM

BTW, just watched Herman’s appearance before the Nat’l Press Club.
Quite impressive. He has not been shaken. Highly recommend it.
There will be a rerun @ 8pm ET, and will be available @ C-SPAN.ORG/VIDEOLIBRARY.

pambi on October 31, 2011 at 2:18 PM

Perry team is really going after Cain.

Falz on October 31, 2011 at 2:21 PM

Perry team is really going after Cain.

Falz on October 31, 2011 at 2:21 PM

Poorly done. At least be a little creative.

a capella on October 31, 2011 at 2:32 PM

Perry team is really going after Cain.
Falz on October 31, 2011 at 2:21 PM

No they’re not. But they should – turnabout is definitely fair play.

rtsidedragon on October 31, 2011 at 3:03 PM

So when is a major media organization going to notice that Obama still has the location verification function turned off on his donation page?

Or are we just going to stand by while Obama takes donations from Gaza, Europe, Canada and a number of Euro nations?

Jason Coleman on October 31, 2011 at 4:35 PM