CRIMINAL CAPITALI$T
Kris Kobach, running for Kansas AG, still working for scandal-tainted border wall group2022/2/17
© The Kansas City Star
Former Kansas Secretary of State Kris Kobach, who is now running for state attorney general, on Aug. 6, 2018. - Shelly Yang/The Kansas City Star/TNS
KANSAS CITY, Mo. — Before Kris Kobach lost the Kansas Republican primary for U.S. Senate in August 2020, his pitch to voters included his work for We Build the Wall, the nonprofit funding the construction of strips of wall along the southern border.
As its general counsel, Kobach commanded a handsome fee of $25,000 per month. He was sometimes the organization's public face, appearing on conservative media and in slick promotional materials.
Everything changed 16 days after the election, when federal prosecutors charged leaders of We Build the Wall, including former White House strategist Steve Bannon, with defrauding hundreds of thousands of donors. They created sham invoices and accounts to launder donations and cover up crimes, prosecutors alleged.
The former Kansas secretary of state, known for his hard-line views on immigration, wasn't charged or accused of wrongdoing. Bannon was pardoned by President Donald Trump during his final hours in office. We Build the Wall's operations largely ground to a halt, its funds frozen as the remaining criminal cases moved forward.
But Kobach has continued to work for the scandal-tainted group over the past year and a half, even after launching his campaign for Kansas attorney general — the state's top law enforcement official.
Kobach is no stranger to controversial causes or associating with fringe characters. His latest campaign, coming after unsuccessful bids for Senate and governor, may attract fresh attention to his day job as a lawyer. The ongoing fallout from the We Build the Wall scandal is only the latest headline-grabbing development in a legal career that has also included being held in contempt in federal court while personally defending a Kansas voter registration law.
Kobach remains general counsel at We Build the Wall. And according to Florida business filings, he is a director along with president and founder Brian Kolfage, who is charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
Money helps explain why Kobach has maintained his ties to Kolfage's organization.
In the immediate wake of the federal charges, We Build the Wall owed Kobach at least $75,000, according to a September 2020 letter that Kobach's attorney, Justin Weddle, filed in federal court. Kobach had a contract with the organization for a flat $25,000 monthly fee but was last paid in June 2020, the letter said.
Since then, Kobach has been fighting in court on behalf of himself and We Build the Wall to obtain access to the group's funds, which were frozen when charges were filed against Kolfage, Bannon and others. We Build the Wall has about $1.7 million cash on hand, Weddle wrote in September 2020.
We Build the Wall has also been unable to retain private attorneys to defend itself in a lawsuit brought by the North American Butterfly Association, which is accusing Kolfage of defamation over social media posts in 2019 alleging a link between the group and sex trafficking. NABA operates the National Butterfly Center, located in Mission, Texas, near a strip of wall funded by We Build the Wall, and closed to the public earlier this year amid threats.
Federal judges have rejected Kobach's requests for access to the funds, looking skeptically at allowing the organization to spend cash that may eventually be used to compensate victims if We Build the Wall's leaders are ultimately convicted.
Kobach is now asking the U.S. Supreme Court to intervene. In November, We Build the Wall filed a petition asking the high court to take up the case. A response from the Department of Justice is due Tuesday.
Kobach and We Build the Wall's byzantine legal quest, and the prospect of the Supreme Court taking it up, appears to be unusual.
"I will tell you, I have not seen a situation like this before ... I've been deeply engaged in these things since 2006 and this is not something I've seen," said Phil Hackney, a law professor at the University of Pittsburgh who studies nonprofits.
Kobach responded to questions for this story with a statement, saying the chances the Supreme Court will hear any case are "always slim."
"This case presents an important question though, regarding the freezing of assets that belong to an organization that has not been charged with any crime, merely because a board member (who does not own the assets) has been charged with a crime," Kobach said, referring to Kolfage. " A Supreme Court ruling would likely affect other nonprofit organizations in the future."
KANSAS CITY, Mo. — Before Kris Kobach lost the Kansas Republican primary for U.S. Senate in August 2020, his pitch to voters included his work for We Build the Wall, the nonprofit funding the construction of strips of wall along the southern border.
As its general counsel, Kobach commanded a handsome fee of $25,000 per month. He was sometimes the organization's public face, appearing on conservative media and in slick promotional materials.
Everything changed 16 days after the election, when federal prosecutors charged leaders of We Build the Wall, including former White House strategist Steve Bannon, with defrauding hundreds of thousands of donors. They created sham invoices and accounts to launder donations and cover up crimes, prosecutors alleged.
The former Kansas secretary of state, known for his hard-line views on immigration, wasn't charged or accused of wrongdoing. Bannon was pardoned by President Donald Trump during his final hours in office. We Build the Wall's operations largely ground to a halt, its funds frozen as the remaining criminal cases moved forward.
But Kobach has continued to work for the scandal-tainted group over the past year and a half, even after launching his campaign for Kansas attorney general — the state's top law enforcement official.
Kobach is no stranger to controversial causes or associating with fringe characters. His latest campaign, coming after unsuccessful bids for Senate and governor, may attract fresh attention to his day job as a lawyer. The ongoing fallout from the We Build the Wall scandal is only the latest headline-grabbing development in a legal career that has also included being held in contempt in federal court while personally defending a Kansas voter registration law.
Kobach remains general counsel at We Build the Wall. And according to Florida business filings, he is a director along with president and founder Brian Kolfage, who is charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
Money helps explain why Kobach has maintained his ties to Kolfage's organization.
In the immediate wake of the federal charges, We Build the Wall owed Kobach at least $75,000, according to a September 2020 letter that Kobach's attorney, Justin Weddle, filed in federal court. Kobach had a contract with the organization for a flat $25,000 monthly fee but was last paid in June 2020, the letter said.
Since then, Kobach has been fighting in court on behalf of himself and We Build the Wall to obtain access to the group's funds, which were frozen when charges were filed against Kolfage, Bannon and others. We Build the Wall has about $1.7 million cash on hand, Weddle wrote in September 2020.
We Build the Wall has also been unable to retain private attorneys to defend itself in a lawsuit brought by the North American Butterfly Association, which is accusing Kolfage of defamation over social media posts in 2019 alleging a link between the group and sex trafficking. NABA operates the National Butterfly Center, located in Mission, Texas, near a strip of wall funded by We Build the Wall, and closed to the public earlier this year amid threats.
Federal judges have rejected Kobach's requests for access to the funds, looking skeptically at allowing the organization to spend cash that may eventually be used to compensate victims if We Build the Wall's leaders are ultimately convicted.
Kobach is now asking the U.S. Supreme Court to intervene. In November, We Build the Wall filed a petition asking the high court to take up the case. A response from the Department of Justice is due Tuesday.
Kobach and We Build the Wall's byzantine legal quest, and the prospect of the Supreme Court taking it up, appears to be unusual.
"I will tell you, I have not seen a situation like this before ... I've been deeply engaged in these things since 2006 and this is not something I've seen," said Phil Hackney, a law professor at the University of Pittsburgh who studies nonprofits.
Kobach responded to questions for this story with a statement, saying the chances the Supreme Court will hear any case are "always slim."
"This case presents an important question though, regarding the freezing of assets that belong to an organization that has not been charged with any crime, merely because a board member (who does not own the assets) has been charged with a crime," Kobach said, referring to Kolfage. " A Supreme Court ruling would likely affect other nonprofit organizations in the future."
We Build the Wall's frozen funds
We Build the Wall formed in late 2018 after Kolfage, a U.S. Air Force veteran of Iraq, initially raised money for a wall through a GoFundMe page. It's not exactly clear when Kobach joined, but when he launched his Senate campaign in July 2019, he told supporters his involvement with the group had been "one of the most rewarding things I have done in my career."
The organization and the novelty of its mission — privately-funded border wall — quickly attracted attention. Trump had made building a wall (and making Mexico pay for it) a key part of his first campaign for president. We Build the Wall offered Trump supporters a way to take matters into their own hands.
Kolfage told The Kansas City Star in June 2020 that he and Kobach were first connected through Bannon. At the time, Kolfage said Kobach was "involved in every decision-making process for the organization."
"Because we've had so many eyes just watching every move that we make and he's been able to help me make sure everything we do is by the book and legally above board," Kolfage said.
But prosecutors allege Kolfage covertly used more than $350,000 in donations for his personal use. Bannon was also accused of using We Build the Wall funds to cover personal expenses. The two men, along with Andrew Badolato and Timothy Shea, were accused of concealing payments to Kolfage by routing them through a nonprofit and shell company controlled by Shea.
While Bannon was pardoned, Kolfage and Shea may face trial in May. Badolato is in the "final stages of a pretrial resolution" — indicating he is likely to take a plea deal — prosecutors said in a letter filed in court on Monday.
Prosecutors in the Southern District of New York first unveiled the charges on Aug. 20, 2020. Two weeks later, Assistant U.S. Attorney Robert Sobelman emailed Weddle asking Kobach to voluntarily produce two categories of documents.
One category included documents concerning an array of politically-oriented limited liability companies and individuals, including Bannon, Kolfage and others close to We Build the Wall. The other was for documents about the group's email or donor lists in connection with Kobach's campaign for Senate, including "any solicitations for contributions."
Kobach had been previously accused by government watchdogs of misusing We Build the Wall's email list to raise money for his campaign. Kobach had emailed the group's supporters, providing links to the campaign's official fundraising page and asked for "a financial contribution of $50, $100, $250, $500, or any amount up to the maximum of $2,800 per individual."
Washington-based Common Cause in 2019 filed a complaint with the Department of Justice, asking for an investigation. Campaign finance experts at the time pointed to the lack of a "paid for" disclosure in the message and said if Kobach didn't pay a fair market price for access to the email list, it could be a violation of campaign finance law.
"Any time a candidate for public office is associated with an outside political organization, it warrants scrutiny to make sure the candidate is not getting an unfair or even illegal boost from the outside organization," Paul S. Ryan, Common Cause's vice president of policy and litigation, said in an interview this week.
Sobelman's email indicates prosecutors had interest in how Kobach's Senate campaign had used We Build the Wall resources and went at least as far as asking for records in his possession.
$75,000 in back pay
Kobach's efforts to gain access to We Build the Wall's funds began soon after charges were filed, according to court documents.
Weddle responded to Sobelman on Sept. 22, 2020, asking in a letter for permission to spend We Build the Wall's funds for a variety of purposes — everything from hiring attorneys to help Kobach produce documents to $75,000 in back pay Kobach was owed.
Weddle also wanted permission to spend $125,000 to pay a retention fee that would allow an insurance company to pay for Kolfage's defense.
Sobelman and Weddle's messages were originally filed under seal in the We Build the Wall criminal cases, but the seal was later lifted. The Star accessed them through a public court records search.
"I have complied voluntarily with the DoJ requests for documents in my possession," Kobach told The Star. "I have continued to serve as General Counsel in order to protect the interests of an organization that serves an important cause, namely physically securing our southern border, and to protect the interests of the hundreds of thousands of contributors who donated to that mission."
Beyond Kobach's own legal expenses and Kolfage's criminal defense, We Build the Wall continues to face long-running litigation involving the North American Butterfly Association. The association sued in 2019, alleging defamation by Kolfage, who sent tweets alleging sex trafficking on National Butterfly Center property.
Over time, the Butterfly Center has become the target of right-wing conspiracy theories about sex and human trafficking.
Last year, We Build the Wall's private attorneys in the lawsuit received permission to drop the case because of non-payment. We Build the Wall has "every intention of paying its legal fees, but is temporarily unable to do so," Kobach said during a March 2021 hearing, according to a transcript.
Kobach said that he, too, hadn't been paid as general counsel since August 2020, "but I don't believe it's appropriate to withdraw."
In an unusual move, Crane designated Kobach as We Build the Wall's attorney "not of record." Earlier this year, the defamation allegations were returned to Texas state court, where the lawsuit was originally filed.
Marianna Trevino-Wright, executive director of the National Butterfly Center, told The Star that she expects the discovery and depositions in the lawsuit to move forward now that it's back in state court.
"Boy, do I feel sorry for you people," Trevino-Wright said of Kobach's run for attorney general.
Supreme Court request
Kobach's formal legal effort to obtain access to We Build the Wall's accounts has been ongoing since the fall of 2020, when his attorney first asked to modify a restraining order placed upon funds in three bank accounts in the nonprofit's name.
Prosecutors said the restraining order was meant to "safeguard funds" that it could later recover through a forfeiture order if it convicts the defendants.
In December 2020, Kobach's request was denied by a district court judge. He appealed to the 2nd Circuit Court of Appeals, which heard arguments in June 2021.
"If the boss of an organized crime family formed an LLC and had all his capos pay money into the LLC instead of giving it to him in cash, can't the government reach the LLC?" U.S. District Court Judge Lewis Kaplan asked, according to Courthouse News Service.
Weddle replied that the nonprofit had an existence apart from its managers. According to CNS, Kaplan exclaimed that Kolfage "is the crime boss!"
The appeals court dismissed Kobach's appeal the next month. We Build the Wall then filed its petition for Supreme Court review in November.
Kobach didn't answer a question this week about how much We Build the Wall currently owes him.
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