Prominent political operative Jeff Roe, who ran Sen. Ted Cruz’s (R-TX) 2016 presidential campaign, was intimately involved in a 2012 conduit contribution scheme that resulted in the American Conservative Union (ACU) paying a $350,000 fine, according to documents released by the Federal Election Commission (FEC). Though the FEC did not allege that Roe broke any rules, the lawyer who facilitated the transaction, James Thomas III, told the commission he “primarily took direction” from Roe.

Here’s the background: On October 31, 2012, ACU made a $1.71 million contribution to Now or Never PAC, a super PAC. The FEC determined that an obscure corporate entity called Government Integrity, LLC (GI LLC) provided the money ACU gave to Now or Never PAC. GI LLC was funded by another — still secret — source “[o]n or around October 31, 2012.” The FEC ultimately fined ACU, GI LLC, Now or Never PAC, and Thomas for violating the law against making, knowingly accepting, or knowingly allowing one’s name to be used for a contribution in the name of another.

Anatomy of a conduit contribution

In addition to serving as the treasurer of Now or Never PAC, Thomas, an ally of Roe, also provided legal services to GI LLC, putting him on both sides of the transaction. The FEC’s finding that there was reason to believe Thomas knowingly assisted in and accepted a contribution in the name of another was based on his “dual role in transferring the funds from GI LLC to ACU and serving as treasurer of Now or Never PAC.”

Thomas wasn’t the only one found to be working on both sides of the transaction. The FEC discovered that Roe and his consulting firm, Axiom Strategies, were also involved with both the LLC and the super PAC. A report by the FEC’s Office of General Counsel said that Roe’s firm admitted that “it both recommended the transfer of funds from GI LLC to ACU and solicited the nearly simultaneous transfer of funds from ACU to Now or Never PAC.”

Roe and Axiom Strategies first appeared on the the FEC’s radar after the commission subpoenaed Thomas, who told investigators that as treasurer of Now or Never PAC he would “carry out the instructions of Axiom Strategies in performing his duties.” Thomas’ legal counsel also told the FEC that Thomas acted at Roe’s direction and that Roe and then-ACU Executive Director Gregg Keller “were likely the architects of the transaction.”

Emails obtained by the FEC through subpoenas show that Roe and one of his Axiom colleagues, Sarah Hoeller, were looped into the play-by-play as the cash was transferred between the entities.

On the morning of October 31, 2012, ACU’s Keller forwarded an email to Roe from ACU’s bank representative requesting wiring instructions for the transfer to Now or Never PAC once incoming funds were deposited in ACU’s account. A little over an hour later, Thomas emailed Roe and Hoeller, writing, “[t]he 2.5 million is here. I am about to wire $1.8 million to American Conservative Union.” After Thomas authorized the transfer from GI LLC to ACU, he emailed Roe, Hoeller, and Keller to tell them the “[m]oney should be on its way shortly.” Keller later emailed the group saying he would “take action immediately upon receipt” before asking for “wiring instructions,” which the FEC interpreted as referring to the eventual transfer to Now or Never PAC.

An email sent later in the afternoon by Roe to Thomas and Hoeller gave an indication of what the ultimate purpose was for some of the money passed through ACU. In the email, Roe asked about the status of the “acu dough,” stating “[w]e need the mo wire out…”  In a brief in the case, the FEC’s Office of General Counsel suggested that, according to Now or Never PAC’s disclosure records, “the mo wire” may have been a reference to an ad buy in support of controversial Senate candidate for Missouri Todd Aiken. Now or Never PAC spent $803,775 in support of Aiken on October 31, 2012, the date of the ACU conduit contribution.

That would likely have been the end of it if ACU hadn’t initially failed to disclose the $1.71 million contribution on its 2012 tax return. When the organization amended its tax return and added in the contribution, it described the money as “a political contribution received by the Organization and promptly and directly delivered to a separate political organization.” The acknowledgment that ACU was just a passthrough for the money served as the basis of the complaint CREW filed with the FEC in February 2015, which sparked the FEC’s investigation.

In late 2017, ACU, Thomas, Now or Never PAC, and GI LLC all signed a conciliation agreement with the FEC agreeing not to contest their involvement with an illegal contribution made in the name of another. Roe and Axiom Strategies were not named in the agreement, but several references were made to “Now or Never PAC’s consultants.”

The signing of the agreement ended the matter for ACU, Thomas, Now or Never PAC, and GI LLC, although a trust and its trustee involved with providing GI LLC with the money it passed to ACU are now suing the FEC in an effort to keep their names from becoming public. The FEC’s Office of General Counsel also had recommended finding reason to believe the trust and trustee had violated the law by making or assisting in a contribution in the name of another, but the commissioners failed to adopt that recommendation on a split decision. CREW is challenging that decision in court.

When the conciliation agreement was first publicized in November 2017, Missouri political reporters noted Roe’s connections to Thomas and Now or Never PAC. For his part, Thomas refused to comment on the fine, telling the St. Louis Post-Dispatch, “I don’t speak on behalf of these committees. I just keep the books and file the reports.” Perhaps they should have spoken with Roe.

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