Pay pledge by border-wall fund at center of Bannon fraud case

The organization began almost two years ago as a push to help President Donald Trump fulfill a signature 2016 campaign pledge by raising donations toward building a wall along the U.S.-Mexico border. Instead, it's at the center of another criminal case involving Trump loyalists.


The nonprofit We Build the Wall Inc., created in part by former presidential adviser Stephen Bannon, was pitched to donors as a way to circumvent the bureaucracy and litigation hobbling Trump's vision. The foundation was backed by prominent supporters of the president including Blackwater security founder Erik Prince, ex-Colorado congressman Tom Tancredo and baseball pitcher Curt Schilling.


But controversy quickly engulfed the nonprofit as critics questioned its actions and how the donated money was spent. Federal prosecutors said Thursday Bannon and others diverted more than $1 million to enrich themselves - including purchases of a Range Rover, a fishing boat, a golf cart, jewelry and cosmetic surgery.


Bannon, 66, who was arrested aboard a yacht on Long Island Sound, pleaded not guilty in New York on Thursday to fraud and money laundering charges. He was released on a $5 million bond. Prince, Tancredo and Schilling - who are on the We Build advisory board, haven't been charged.


The initial GoFundMe campaign was started in December 2018 by Brian Kolfage of Florida, an Air Force veteran who lost three limbs from wounds in Iraq. At the time, frustration was growing among Republicans and Trump supporters over congressional reluctance to fund a multibillion-dollar border wall.


In his first week, Kolfage raised about $17 million he pledged to donate to government wall construction. But GoFundMe told him it wouldn't release the funds unless he had a charitable organization to manage the money. That's where Bannon came in. Trump's former campaign chief had left the White House in an acrimonious split in 2017, but he'd remained a supporter of the president and a prominent figure in right-wing politics.


Kolfage, Bannon and two others - Andrew Badolato of Florida and Timothy Shea of Colorado - formed We Build the Wall as a charitable organization to receive the funds and pay for the private border-wall construction. By October 2019, they'd raised a combined $25 million from hundreds of thousands of donors, according to prosecutors.


We Build the Wall made repeated promises to prospective donors that "100 percent of the funds raised" would go toward wall construction. "No deals I don't approve," Bannon said in a text message to Badolato, referring to wall projects, according to the indictment. Bannon said publicly that leaders of the group wouldn't be paid because "we're a volunteer organization."


Many of Trump's supporters, including some who struggled financially, donated to the fundraising effort, trusting that the money would go directly to the construction of the border wall, according to prosecutors.


But Bannon, Kolfage and the other two men almost immediately devised a plan to divert funds to themselves, the government said.


One back channel was a nonprofit founded by Bannon, Citizens of the American Republic, from which Kolfage was paid $100,000 up front and $20,000 per month starting around February 2019, according to the indictment. Bannon spent a substantial portion of the money his nonprofit received for personal uses and expenses unrelated to wall building, prosecutors said.


The four men also funneled payments through associates of Badolato - including an unidentified construction contractor - and a shell company formed by Shea, the government said.


Shea is the chief executive officer of a Colorado-based company that makes a Trump-themed beverage called Winning Energy, which purports to contain "ultra-hydrating liberal tears." The energy-drink can features a drawing of Trump in a Captain America-like costume. Shea's wife is listed as the treasurer of We Build the Wall.


Badolato is an entrepreneur and venture capitalist who wrote for Bannon's right-wing news outlet Breitbart News and earned producer credits on Bannon documentaries.


Bannon and Badolato recognized the fundraising power of the group's false public pledge that Kolfage would "not be paid a dime," prosecutors said. In a text exchange quoted in the indictment, Badolato told Bannon it would drive donations and become "the most talked about media narrative ever" because it "removes all self-interest taint" and "gives Brian Kolfage saint hood."


We Build the Wall was granted tax-exempt status in July 2019, but its required financial disclosures may not be made public until next year. The Internal Revenue Service didn't verify the group as eligible to receive tax-deductible contributions, so its donors were not allowed to write off their payments.


On its website, the company said it was spending money to build small parts of a wall.


Less than a mile of fencing was completed in Sunland Park, New Mexico, in May 2019. The effort drew objections from local officials who briefly shut it down and from a U.S. agency that said it wrongly crossed over federal property, cut off access to a border monument and merely shifted the flow of illegal immigration to another nearby crossing point. We Build the Wall said the project cost $6 million to $8 million.


In February, a second section of about 3 miles was completed along the Rio Grande River in Texas. It was built in a flood plain and suffered from erosion, prompting Trump to say in a tweet that it was "only done to make me look bad."


The slow and limited work prompted complaints to authorities. One blogger noted a picture of a boat purchased by Kolfage on his Instagram page, which ultimately led to a criminal investigation by a unit of the Florida attorney general's office.


The good-government group Common Cause filed a complaint with federal election officials over the apparent use of We Build the Wall to solicit donations for the U.S. Senate campaign of Kris Kobach, general counsel to the group and former Kansas secretary of state. Kobach wasn't charged and the status of the Common Cause complaint couldn't be determined.


We Build's leaders learned in October that they were under federal criminal investigation. They stopped making the claim that they drew no income from the donations and added a statement on We Build's website that Kolfage would begin drawing a salary in January 2020.


But in much of 2019, Kolfage had been paid secretly, which he said in a text message to Badolato "will never be disclosed," according to the indictment.


In another text exchange cited in the indictment, Kolfage told Badolato that We Build the Wall would have to disclose on its tax forms substantial payments made to Bannon's nonprofit. "Better than you or me lol," Badolato replied, the court filing showed.