Madison Cawthorn scrutinized for illegal use of campaign cash that should be refunded to donors: report

According to a report from the Daily Beast's Roger Sollenberger, outgoing Rep. Madison Cawthorn (R-NC) is facing increasing scrutiny for manipulating campaign donations which are being used to pay bills when the money is required by law to be returned to donors.

The controversial Cawthorn suffered a humiliating defeat in mid-May in the North Carolina primary after serving only one term in Congress after Republicans in the state turned against him following a string of scandals.

Now, since he won't be on the ballot in November, Sollenberger reports that Cawthorn's primary campaign overspent wildly and is deeply in debt and he is paying bills with money that, by law, should only be used for the midterm election in November he won't be a part of.

According to the report, "With two weeks to go until a primary election he was fated to lose, Rep. Madison Cawthorn (R-NC) was already underwater. His campaign held more than twice as much debt as it had cash on hand, the donor well was dry, and he and his staff were months into a madcap spending streak that one campaign source called 'baffling.' And now, after indeed losing that primary, there’s no money to pay the piper."

At issue is Cawthorn's obligation by law to refund donations back to backers who donated money for his post-primary election campaign that no longer exists.

"Cawthorn is required by law to refund those donations. Instead, according to a campaign source, the campaign already spent the money," Sollenberger wrote. "The public doesn’t know any of this yet, however, because the Cawthorn campaign is now a week late in submitting the quarterly Federal Election Commission report that would disclose the collapse. That delay will already trigger an automatic fine."

He continued, "Cawthorn couldn’t raise money to offset this burn rate, which was so high that, by May 5, the campaign had just 2 percent of the $3.7 million it had raised since January 2021. In truth, the source said, the campaign had been forced to tap its general election account months ago," adding, "Federal election laws allow candidates to raise money for the primary and the general election at the same time. But candidates can’t spend the general election funds unless they win the primary, first. If you don’t win, you have to repay those donors."

According to Jordan Libowitz, communications director for Citizens for Responsibility and Ethics, Cawthorn is in big trouble.

“There are few more ironclad rules in campaign finance than you can’t spend general election funds in a primary,” Libowitz explained. “There are strict limits on how much may be given and spent in each. If Cawthorn spent funds raised for the general during the primary and made no attempt to refund the general donations, he’ll likely be in a lot of trouble with the FEC.”

The report adds that Cawthorn's clock to turn in reports on his finances ran out last week and now "Cawthorn’s hired treasurer quit last Friday—the day the campaign report was due—with the freshman congressman personally taking his place."

You can read more here.