In the president’s view, the Russia investigations are a “rigged witch hunt.” But this doesn’t mean that people in Trumpworld can dismiss them. Special counsel Robert Mueller has already secured indictments or guilty pleas from more than a dozen people, and there are two concurrent congressional investigations. It’s a field day for Washington defense lawyers, and the costs of even basic legal representation can get pretty high. What’s a low-level White House staffer to do?
Have no fear: The Patriot Legal Expense Fund Trust is here. Established in February, PLEFT promises in its charter agreement to “serve as a legal expense fund to raise money and pay for or help defray legal expenses, which can include attorneys’ fees, court filing fees, litigation costs, or other related fees and costs incurred by” eligible recipients. Who is eligible? Any person connected with the Trump campaign, transition, or administration—excluding the president himself and his immediate family—who is in any way caught up by the existing investigations into Russian interference in the 2016 election.
On the surface, PLEFT sounds like a traditional legal defense fund, but there are some notable and curious differences. First, PLEFT was organized in Delaware as a limited liability company. Second, it is registered with the IRS as a tax-exempt political action committee under section 527, which usually governs campaign organizations. Being a 527 allows the fund to receive unlimited contributions, but it also requires the group to disclose its donors, contributions, and expenditures. And finally, unlike the usual defense funds, which are set up to benefit a single individual, PLEFT is not a trust dedicated to paying any one person’s legal expenses. Instead, it is designed to have numerous and still unnamed beneficiaries, none of whom has any protected rights to the money (as Paul Manafort and Michael Flynn, for instance, do to the money donated to the funds set up to aid them).
The power to determine which Trump associates get reimbursed for their legal fees belongs entirely to the manager of the fund—Nan Hayworth, a former New York Republican congresswoman. Hayworth, who served one term in the House (2011-13), is the public face of PLEFT and is featured in a YouTube video on the fund’s barebones website urging donations. “Your support of the Patriot fund will keep faith with the people who share President Trump’s commitment to make America great again,” she announces.
A spokesman for the fund, Mark Serrano, declined to comment, and the fund’s legal counsel at the D.C. firm Wiley Rein were also unavailable to respond to questions, all of which boil down to this: Why the atypical setup?
That’s the question Democrats on the House Oversight Committee have asked the White House’s Office of Government Ethics, which in January gave the Patriot fund the stamp of approval. In an April letter to the ethics office’s acting director, the lawmakers raised concerns, including the possibility that White House staff could receive donated funds from outside groups who themselves are not required to disclose their donors—raising the potential for donors to the fund to hide underneath shell organizations.
The Democrats also fear PLEFT’s arrangements do too little to police the donations, which could come from prohibited sources. Under federal regulations, an administration employee cannot accept gifts from donors who have—or even appear to have—interests involving that employee’s official duties. When it comes to West Wing staff, that means nearly every potential donor is a prohibited source. These problems plagued the White House during President Bill Clinton’s legal troubles, and all but killed legal defense funds then as a sensible option.
The Patriot fund’s “solution” is to identify all donations for federal employees and redirect any money from prohibited sources toward non-federal employees under investigation. But as Walter Shaub, a former director of the ethics office, points out, “money is fungible.” “Every dollar the fund accepts from a questionable source and pays to a nongovernmental beneficiary frees up a dollar for those who do work for the government,” he wrote in an op-ed for the Los Angeles Times in February.
Shaub, who was appointed to the top job at the ethics office by Barack Obama in 2013, resigned last year and has since become a sharp critic of the Trump administration. He says the structure of the fund allows the people running it to violate federal ethics rules and to misrepresent the interests of donors.
In November, Ty Cobb, then the president’s lead counsel, said that PLEFT would not pay the expenses of anyone indicted in the investigation, but the fund’s charter leaves the door wide open to do exactly that. “The Manager,” it reads, “shall avoid payments arising from the defense of any charge or indictment for dishonest, fraudulent or criminal activity unless the Manager determines, in the Manager’s sole and absolute discretion, that the acts forming the basis of such charge or indictment were undertaken by the Recipient on behalf of, or directly in support of, the Campaign, the Transition or the Administration in good faith and without knowledge that such acts were prohibited by law.” In other words, if you’re indicted but the fund’s manager believes you didn’t break the law on purpose, the fund can reimburse your legal expenses after all.
There’s also the possibility that the money “could be used to influence witnesses.” While the manager of the fund is prohibited from communicating with potential recipients, the manager can still communicate with the Trump campaign. “This loophole would allow the Campaign to influence which individuals receive disbursements from the fund,” wrote the House Democrats to the ethics office. “It would also allow the Campaign to serve as an intermediary for communications between the Manager of the fund and potential recipients.” Because PLEFT is not a trust with a protected recipient, legal reimbursements could be made contingent on loyalty to the president, his campaign, or, as the Democrats’ letter darkly suggested, how a witness testifies.
There’s no way to know if there’s been even a hint of malfeasance with PLEFT’s donations or expenditures. The IRS has no record of any disclosures in the first quarter of 2018, even though there was more than a month between its registration with the IRS and the March 31 filing deadline. This indicates that the fund had neither accepted donations nor paid out money to recipients as of the deadline. Spokesman Mark Serrano again declined to answer questions about whether there had been any disbursements in the second quarter, referring me to the disclosure form expected in the middle of July. Until then, the Patriot fund will continue to draw scrutiny without giving much in the way of transparency. Says Shaub of the fund’s lengthy limited liability agreement: “It’s an ingenious legal document if you wanted to be a person who got away with breaking the rules.”
