New Docs Show Matt Gaetz Campaign in Full Damage-Control Mode

Photo Illustration by The Daily Beast / Photos Getty
Photo Illustration by The Daily Beast / Photos Getty

As Rep. Matt Gaetz combats allegations that he was involved in a sex ring, the Florida Republican’s latest campaign finance report reflects a public relations scramble that began even before he acknowledged being the focus of a federal investigation.

The filing, which covers the three months between January and March, shows that Gaetz has incurred unprecedented fundraising expenses during a typically quiet period. In that time, Gaetz dropped six figures on a direct mail blitz, shelling out more for fundraising services than he did in all of 2020.

Gaetz also paid $5,000 in “strategic consulting” fees to notorious political operative Roger Stone, and he gave money to a number of GOP Florida state lawmakers that he’s never supported before. The report also indicates that Gaetz—who cites his lack of friends in Washington as a point of pride—may be increasingly isolated; he’s received no contributions from his GOP colleagues.

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More than anything, the filing reflects a concerted effort to bolster support ahead of the creeping shadow of the investigation. Gaetz has spent roughly $170,000 on direct mail outreach this year, $116,543 of it on one day—March 31. The previous day, The New York Times broke the news that the Justice Department was looking into whether the third-term congressman had sex with a 17-year-old and paid for her travel, a possible violation of federal sex-trafficking laws.

Gaetz has also invested heavily in fundraising, paying Nevada-based Red Rock Strategies nearly $160,000 for fundraising consulting. That’s roughly $10,000 more than the campaign spent on fundraising services in 2019 and 2020 combined, according to The Daily Beast’s analysis of filings in the FEC database.

Last week, Politico also reported that Gaetz recently spent six-figures on TV ads punching back against the accusations. The 30-second spots, slated to run in his panhandle home district and on select national cable networks, ask supporters to “fight back” against “a multi-week fake news cycle,” targeting CNN specifically. The ad buys came after the quarterly filing deadline and aren’t included in the latest report, but should appear in the next filing, which is due in July.

However, one expense in particular will raise eyebrows: A $5,000 “strategic political consulting” fee to Drake Ventures, the company belonging to longtime GOP smear artist and Gaetz associate Roger Stone. On Friday, the DOJ sued Stone and his wife, Nydia, alleging that the couple owes millions in unpaid taxes and have used Drake Ventures to shelter more than $1 million.

The campaign paid Stone’s company on March 24, just days before Gaetz’s father held an in-person meeting with a former DOJ prosecutor, according to a person familiar with the meeting. In a bizarre March 31 interview with Fox News’ Tucker Carlson, Matt Gaetz claimed that his father recorded that conversation at the direction of the FBI, alleging without evidence that the former prosecutor was at the center of a convoluted scheme to extort the congressman. The Gaetz campaign had never paid Drake Ventures until then.

The report also suggests that Gaetz has few friends in Washington. While Gaetz swore off donations from corporate PACs, he kept the door open to donations from candidate committees. But he has so far reported no financial support in 2021 from friends in Congress such as Jim Jordan and Stephen Scalise, both of whom donated to his 2020 campaign. And while he made same-day $4,000 donations to Sens. Mike Lee (R-UT) and Rand Paul (R-KY) in mid-February, Gaetz did not give money to any House colleagues.

Gaetz did, however, send out $1,000 donations to five GOP Florida state senators on Jan. 26. Gaetz hadn’t donated to any of their campaigns previously.

One of the contributions reflects Gaetz’s ties to Joel Greenberg, his longtime friend whose federal indictment on a range of offenses—including sex trafficking—led to the probe targeting Gaetz. The contribution went to Jason Brodeur, a longtime Gaetz ally who was also close with Greenberg through local GOP circles. Brodeur’s campaign drew scrutiny for dirty tricks, including an alleged sham candidate scheme. Brodeur has denied involvement and went on to win that race, now representing Greenberg’s Seminole County at the state level.

Gaetz has also continued to rack up legal fees, a pattern established last summer around the time the DOJ investigation was reportedly launched. The Daily Beast reported earlier this month that weeks after Greenberg was first indicted—in June 2020—Gaetz paid the law firm Venable LLP $38,000, nearly four times the combined amount of legal fees incurred in the previous five years. The new filing reveals a $21,000 payment to Venable in February, bringing total legal expenses up to $85,000 since Greenberg was charged.

Caleb Burns, a partner at Wiley Rein who specializes in campaign finance law, told The Daily Beast that spikes in legal fees are often accompanied by a parallel spike in fundraising.

“The law permits candidates and officeholders to use campaign contributions for legal expenses that arise from their candidate and officeholder duties and responsibilities,” Burns explained. “But if an officeholder gets into a car accident on the way to the grocery store—which has nothing to do with running for or holding office—the law bars the use of campaign funds to cover any resulting legal expenses. Therefore, it is not uncommon for candidates and officeholders facing scrutiny for their political activities to raise additional funds into their campaigns to help offset associated legal expenses.”

While the thrust of the Gaetz investigation is said to focus on the sex trafficking allegations, CNN reported earlier this month that federal investigators are also examining campaign finance irregularities as part of their broader inquiry. Gaetz can legally tap his campaign coffers for those expenses.

The congressman has already raised money from the scandal. On April 7, Talking Points Memo published a fundraising email in which Gaetz slammed “The far-left New York Times” for reporting “salacious allegations against me in an attempt to end my career fighting for the forgotten men and women of this country.” The email added that it was “a shame that the Left tries to drag my dating life into their political attacks,” and included a donation link asking supporters to “fight back against the fake news.”

Gaetz donor Richard Bell, who gave to the congressman late last month, told The Daily Beast that while he has liked Gaetz’s policies since he arrived in D.C., Gaetz “should pay the price” if the allegations are true.

“I know there is a big expense in defending and felt I wanted to help out,” Bell said.

Another recent donor, Florida resident Jerry Klinger, told The Daily Beast that he gave to Gaetz because he agreed with the congressman’s “small-government philosophy.” However, Klinger said that “the shadows that have come out since may have given me pause to reconsider.”

Klinger expressed skepticism about the merits of the DOJ investigation, and said he has “no objection” if Gaetz uses his donation for legal expenses. But he pointed out that the congressman comes from a wealthy and influential family.

“If daddy wants to pay for junior, that’s a different story,” he said.

Read more at The Daily Beast.

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