Bob Mercer reports that while Kristi Noem promised in 2018 not to take contributions from businesses and made a big fuss over auditing her campaign finances to return four relatively small business donations that snuck through her fence, her campaign committee happily accepted money from businesses who laundered their contributions through political action committees:
KELOLAND News, while researching a previous story on fundraising and spending since the 2018 election by Noem and her Democratic opponent, Billie Sutton, found two instances where money from businesses was routed into political action committees in 2019. The PACs then donated to Noem’s campaign: Pierre-based Maypac gave $7,500; and Sioux Falls-based Building South Dakota gave $15,000.
Maypac had ended 2018 with a fund balance of $116.53. Its chairman and treasurer is Brett Koenecke, an attorney with the May Adam Gerdes Thompson law firm of Pierre. The PAC received one contribution in 2019: $10,000 from May Adam Gerdes Thompson. It showed one donation in 2019: $7,500 to the Kristi for Governor committee.
Building South Dakota organized as a political action committee December 12, 2018, but reported zero spending and zero donations for 2018. Its chairman, Chris Thorkelson, and its treasurer, Jon Knutson, listed Lloyd Companies email addresses. The committee used the main address of C.R. Lloyd Associates, Inc., doing business as Lloyd Companies, of Sioux Falls.
In 2019, Building South Dakota reported three contributions: $5,000 from Craig Lloyd, $5,000 from Thorkelson, and $10,000 from CR Lloyd Associates, Inc. All three used the same address. The PAC then gave $15,000 to the Kristi for Governor committee.
Both Maypac and Building South Dakota would have violated the $4,000 limit that state law sets for business entities’ contributions to statewide candidates. State law allows PACs to give unlimited amounts to a statewide candidate. There is a $10,000 limit on an entity’s contribution to a PAC [Bob Mercer, “In Reversal, Noem Re-Election Campaign Accepted Business Donations Last Year,” KELO-TV, 2020.09.08].
Team Noem tells Mercer they are simply surrendering to “the reality of South Dakota law as it stands today.” Obviously, Noem is so busy raising her national profile to gas up her 2024 Presidential fantasies that she has forgotten that she is a Republican governor with a Republican Legislature that would happily pass almost any bill she wanted to change South Dakota law and do away with the contributions that she deemed so odious previously.
Open.SD.gov’s state checkbook feature reports that May Adams Gerdes Thompson received payments of $336,568.84 in Fiscal Year 2020 and has $57,650.40 in the first two months of this fiscal year. $7,500 invested, $394K returned… that’s a 52.5 ROI! Well done, May Adams Gerdes Thompson!
I previously expressed my confusion about Cory’s use of the term money laundering in a prior post about SD trust law but no one stepped up to the plate to help me understand why my confusion was inappropriate. Basically I wrote something like this – money laundering is a criminal process where illegally obtained funds are are made to appear lawful by creating and using a fake business or other fake lawful source of income and pretending the money originated there. Then the money can be declared as income, taxed and used publicly without fear of prosecution or forfeiture.
As before, I don’t see how the actions described in this post about campaign contributions amount to money laundering. While objections to the the rules and classifications that permit such transfer of funds to support politicians like Noem seem appropriate, labeling this activity as criminal money laundering does not.
What am I missing? How was the crime of money laundering accomplished?
It’s a different kind of laundering here, BCB. The direct contribution would be illegal. Running it through a PAC cleans the money and circumvents limits that would otherwise exist. I’m not looking to press charges; I’m just looking for consistency in the law and pointing out that identical results—money going from May Adam and Lloyd Assoc to Kristi Noem’s campaign—are illegal if achieved by direct payment but entirely legal when achieved via the legal fiction of a PAC middleman.
Thanks Cory. I kind wondered if that is what you meant. I guess my confusion arose from never before seeing the term money laundering being used to describe legal money transactions.
Plus, online definitions I found didn’t help. See e.g.
https://www.investopedia.com/terms/m/moneylaundering.asp
From my point of view, simply pointing out how the new PAC contribution rules negate the protections intended by existing limits on campaign contributions would have effectively made the point. Using a term like laundering that already has a well known definition to mean something different than the existing definition seems to weaken the point that there is a problem with the new PAC rules.
Kristi only has a 100 person law firm (SDAG) while Trump has 1000 person law firm
(DOJ) for the public to do much of the work for herr leaders. Big bills from much smaller Sx Falls/RC firms are necessary gravy train because that’s retail capitalism. AND Because both AGs are bozos. Granted, Barr is an experienced ultra-religious zealot bozo. RAGA will teach Jason the Warthog pilot what GOP wants him to excel at.
Bear-i don’t think the trust companies, the lawyers and the beneficiaries want you to know what’s going on inside their secret state regulated $330 B industry—likely the largest in the state and rivaling or beating out those well known international criminal money laundering “off shore tax havens”.
leslie, I agree that privacy is the ticket to lack of accountability and probably a key reason for using trust laws.
Leslie, if the state didn’t contract out to private law firms, could it afford to increase staffing in the AG’s office to handle that workload? What costs more, private law firms on contract or permanent employees in state government?
How many law firms rely on those state contracts to subsidize their work? How many could afford to stay in business on the lonesome, low-paying prairie without the state’s patronage? And does someone at USD Law teach aspiring lawyers that their ability to win those state contracts depends on their political contributions, or at least their willingness to keep their heads down and not challenge the one-party regime?
The count is 10-40 retail lawyers in the few largest mainly RC/SF private firms vs 100 lawyers wholesale in typical AG offices (haven’t yet seen figures for SD AGs pop up). If Jason Ravensburg (or whatever his name is) had years of managing lawyers like leaders of firms do, he would be capable of very big things, (paid for by the public at wholesale cost).
RAGA understands horsepower (30 state AGs @ 100 lawyers per = lots of horsepower, wholesale). Natl and intntl firms have hundreds or thousands of lawyers. Retail. They run nations, essentially. Legal Bills payable capable only of nations. Or Koch brothers. Same reason HRC represented Waltons.
SD is a jealous little state. Firms chase state contracts. They adeptly sue the state too when financially advantageous. The search for deep pockets is always rendering and breeds corruption. David Lust loves secret trusts. Rounds adeptly used a few private EB5 lawyers and a few skilled state lawyers for cover while running for Senate. He likely taught Trump a few tricks by now! But don’t worry. Lawyers ARE trained in ethics. Had we elected Randy Seiler we would be benefiting greatly from his tremendous experience and integrity. Trump went to a real college too, but… criminals will be criminals. Some of the very best lawyers represent very rich criminals. Every person has the right to legal counsel. Public Defender offices do not have horsepower. Listen to Dylan’s “Sad Tale of Hattie Carrol”.
You’ve heard “Trillions $$” Gilbertson or USD’s Indian law prof. They likely don’t teach law firm economics, but some might. Its more so OJT. Rainmakers go to Mar Lago, and likely to Castlewood or wherever she hangs her camo tach cap. Why do you think she flew on USAF-1? AND You’ve been on the state bird hunt. You came away with a contract, right?
“Switch parties in SD if you want financial success” (c) bhbl&l assoc; chambercommerce :)
Republicans elect incompetent puppets the GOP controls. (c) me
https://m.youtube.com/watch?v=s5lzSYL2gSg
Laundering a million bucks by Saudi Arabia possibly for 9/11? Looks like this has happened and it’s kind of interesting. https://news.yahoo.com/why-visit-saudi-official-jersey-115759325.html
At any rate, family’s that are suing the Saudi Arabian country itself, just got a step closer to closure.