Where Did Rep. Steve Chabot’s Missing Campaign Funds Go, and Will It Affect His Re-Election?

 

Even as U.S. Rep. Steve Chabot (R-OH-01) tweets about his “best off-year fundraising haul,” the Federal Election Commission continues to take his campaign to task over its filings.

On October 9, Chabot tweeted, “Excited to say I’ve raised $420K in Q3, the best off-year fundraising haul in my congressional career! I’m incredibly grateful for all the hardworking Ohio families who have invested in our effort and look forward to continuing to serve our community in Washington. #OHpolitics.”

The day before, on October 8, the FEC scolded new treasurer Natalie Baur for failing to mark Chabot as affiliated with the Republican Party on the campaign’s amended statement of organization received September 16.

Chabot letter Oct 8

 

On September 19, the campaign announced Baur was coming on board amidst a financial scandal.

“As the campaign said when it first learned it was the victim of financial malfeasance, it is taking every available step to conduct a thorough review and audit of its finances and put controls in place to ensure nothing similar can happen again,” said campaign attorney Mark Braden. “As part of those efforts, the campaign has named as its new treasurer the most respected campaign compliance expert in Ohio. The campaign has also established rigorous processes and procedures going forward to safeguard its finances and ensure all future expenditures are documented and in compliance with the FEC.”

Meanwhile, no one appears to want to talk any further about the elephant in the room — the matter of campaign funds that allegedly disappeared under the watch of Baur’s predecessor. Nor has anyone announced how much money is gone.

The FEC on August 27 sent a letter to Jim Schwartz, listed as treasurer at the time. The letter, available here, asked sharp questions about an amended April quarterly report the commission received on May 6 regarding an increase of $123,625.72.

Your amended report discloses an increase in receipts totaling $123,625.72 on Line(s) 11(a)(iii) of theDetailed Summary from those disclosed on your original report. Please provide clarifying information as to why this activity was not disclosed on your original report. (11 CFR § 104.3)

The letter says some of the filing’s math appears to be incorrect.

Fox 19 on September 4 quoted Braden.

“Congressman Chabot was shocked and deeply disappointed to be informed yesterday afternoon that his campaign committee may be the victim of financial malfeasance and misappropriation of funds. Unfortunately, the misappropriation of funds by some campaign treasurers has been far too common an occurrence over the years,” the statement reads.

Former campaign manager Jamie Schwartz, Jim Schwartz’s son, ran two companies, Fountain Square Group and Prime Media. Chabot’s campaign paid those firms over $57,000 in July and August before Schwartz closed the companies and left the campaign, cleveland.com reported.

Chabot’s campaign filings show “unknown” for expenses paid to those companies.

Making things more complex, James “Jim” Schwartz said he has never worked as Chabot’s treasurer, Roll Call reported.

Ohio Secretary of State Frank LaRose on September 10 announced that more than $120,000 was allegedly embezzled from Chabot’s campaign. He also said:

Initial reports indicate the individual listed his own father as the campaign treasurer, doing so without his permission, in order to maintain autonomous and secret control over campaign funds without any accountability.  The embezzlement of funds is a clear abuse of the campaign finance system.

While this fraud took place at the federal level, a similar loophole can be found in state law. Currently, a campaign treasurer isn’t even required to sign their own name. This exposes campaign accounts to fraud.

LaRose said he will now require the signature of both the candidate and treasurer. He also proposed legislation requiring the treasurer’s signature be verified by a third-party notary.

Online forms show 14 payments totaling more than $51,000 were paid to JR Schwartz Consulting from 2009-2010, Local 12 reported. The station also reported it was unable to contact Jamie Schwartz.

Howard Wilkinson for WVXU in an editorial questioned Chabot’s claims that the missing money will not hurt his re-election efforts. Such a statement is either “whistling past the graveyard” or a sign of his being “totally disengaged from his campaign organization.”

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Jason M. Reynolds has more than 20 years’ experience as a journalist at outlets of all sizes.

 

 

 

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