New details about a phony half-million dollar loan Rep. George Santos (R-NY) paid to himself could put the first-term lawmaker in deep trouble.
A source with knowledge of the events told The Daily Beast that a fictitious $500,000 loan from March 31, 2022, showed up on Santos campaign finance reports, but after he came under investigation and his campaign treasurer Nancy Marks resigned, the loan stopped appearing and his new treasurers began listing $615,000 in loans paid in four installments last year in September and October.
"The revelations change the timeline and raise new questions about the Santos campaign’s bewilderingly inconsistent financial statements, but they also bring the conversation back to square one, legal experts told The Daily Beast," wrote senior political correspondent Roger Sollenberger. "In other words, the central questions are the same as they were earlier – where the money came from, how it was spent, and whether Santos lied about any of it to donors and the government."
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Marks pleaded guilty last week to charges that have nothing to do with 13 counts against Santos described in a federal indictment in May, but two sources with knowledge of the investigation say additional charges against the New York Republican seem imminent.
“Since the beginning of the George Santos saga, a lingering question has been where the cash-strapped candidate came up with hundreds of thousands of dollars to put into his campaign,” said Brendan Fischer, a campaign finance law specialist and deputy executive director of Documented. “It would appear that Santos’s infusions of cash into his campaign line up with a series of questionable business endeavors."
Santos claimed in December that he took money from his own company, the Devolder Organization, into his campaign, but experts at the time questioned the legality of those transfers, and the Department of Justice confirmed in Marks' plea agreement that he didn't have enough money to make such a large loan – which suggests he had set up a corporate pass-through and possibly an illegal straw donor scheme.
"This is just an additional level of lying and criminal exposure," said Jordan Libowitz, communications director for government watchdog Citizens for Responsibility and Ethics in Washington.
“None of this is remotely legal,” Libowitz added. “What we were originally looking at is that Santos appeared to have loaned his campaign money that he didn’t actually have, because it was illegally being funneled through his business from individuals who weren’t by law allowed to make such large donations. The loans would have hidden where the money came from, so that’s an illegal pass-through corporate contribution or a donation in the name of another person.”
