Foreign Contributions: Rapper Charged With Funneling Money to Democrats

Joe Trotter | United States

Former Fugees rapper Pras Michel was charged on Friday with funneling millions of dollars in illegal foreign contributions to Democratic candidates and groups in the 2012 elections.

In a four-part indictment, the Justice Department alleges that Michel and his co-conspirators gave 20 individuals over $850,000 to distribute under their names to Democrat campaigns. This practice, known as using “straw-donors,” is used to avoid contribution limits and donor disclosure requirements.

The indictment also alleges that Michel and other conspirators funneled over a million dollars to independent expenditure committees, colloquially known as super PACs. Super PACs do not have contribution limits, but are subject to donor disclosure requirements. It is illegal to hide the source of funds contributed to a super PAC.

Michel is charged with conspiracy, making false statements, and two counts of falsifying records. He pled not guilty to the charges.

Foreign Contributions In U.S. Elections

According to the Justice Department, between June and November 2012 Malaysian financier Jho Low moved $21.6 million into Michel’s accounts for the purpose of impacting U.S. elections. Foreign contributions to campaigns and super PACs are illegal, as is using straw donors to funnel foreign contributions.

The indictment alleges that these funds were stolen from the Malaysian state investment fund known as 1MDB. Low and two former bankers were indicted last year for bribery and money laundering in relation to the stolen funds, which were used to pay for luxury items and even to finance the movie “The Wolf of Wall Street.” Michel is currently subject to a civil complaint for trying to end the investigation into Low.

Who Benefitted from the Foreign Contribution?

Former President Obama and the Democratic Party’s joint-fundraising committee were the primary beneficiaries of the Michel’s straw donor scheme. Michel attempted to bring Low to a number of President Obama’s fundraising events, and was ultimately successful in gaining him admission to an Obama-attended event at the White House.

This isn’t the first time President Obama’s campaign was caught using accepting illegal foreign contributions. In 2012 a Florida man pled guilty to giving $75,899 to the Obama Victory Fund on behalf of an Albanian politician looking to curry favor with the White House.

In addition to the direct contributions, more than a million dollars went to the super PAC Black Men Vote, which spent $842,760 airing misleading attack ads against former Republican presidential candidate Mitt Romney.  According to disclosure records, it appears that Michel personally acted as a straw donor in conjunction with limited liability company SPM Holdings in funneling money to the super PAC.

What’s Next?

Michel’s attorney, Barry Pollack, said that his client is innocent of all charges. Pollack released a statement saying: “Mr. Michel is extremely disappointed that so many years after the fact the government would bring charges related to 2012 campaign contributions. Mr. Michel is innocent of these charges and looks forward to having the case heard by a jury.”

 


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