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Trump’s inaugural team scrambled to defend staff and record haul |
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Trump’s inaugural team scrambled to defend staff and record haul

President Trump delivers his inaugural address after being sworn in as the 45th president of the United States during the 58th Presidential Inauguration at the U.S. Capitol in Washington. State authorities in New Jersey have subpoenaed a host of financial records from the committee that organized Trump’s inauguration, Friday, Feb. 15, 2019.

NEW YORK — The leaders of President Trump’s inaugural committee saw trouble coming and tried to get ahead of it.

It was January 2018, a year after the black-tie balls and candlelight dinners in Washington. Journalists were asking questions about how the Presidential Inaugural Committee had raised — and spent — a record amount of money. The committee, known as PIC, was set to release additional details about its finances in public tax filings. Complicating matters, a key committee staffer, Rick Gates, had months earlier been indicted for lobbying work he’d done with Paul Manafort in Ukraine.

To get everyone on the same page, a team reporting to inaugural chairman Thomas Barrack came up with more than 60 questions and answers to circulate among themselves. One question was particularly tricky.

“What did Rick Gates have to do with PIC?” staffers wrote in a late January draft. “(Need answer.)”

The draft document, which was reviewed by Bloomberg News, shows how the group prepared to defend its work as questions intensified about its reported $107 million haul. According to nine inaugural staffers and others familiar with the committee’s efforts, the process of planning for Trump’s big week was chaotic and opaque, dominated by staff culled from Colony Capital, the real estate firm founded by Barrack, and by ex-Trump campaign chairman Manafort’s circle of associates.

Many financial decisions were centralized in Barrack’s office, and Gates, dubbed “deputy to the chairman,” was Barrack’s right-hand man, with responsibilities spanning everything from finances to entertainment, according to several people with knowledge of his involvement.

Now, federal prosecutors in New York are asking their own questions about the inaugural committee, looking for potential money laundering, false statements, mail and wire fraud, according to a subpoena sent earlier this month, according to news reports. The New Jersey attorney general sent a separate civil subpoena to the committee, ABC News reported.

In response to questions from Bloomberg News, Kristin Celauro, a spokeswoman for the inaugural committee, said in an email, “The PIC cannot address specific media reports due to the ongoing inquiry. However the PIC remains confident it has fully complied with all applicable legal requirements.”

Celauro said the committee received the subpoena from New Jersey and that “the PIC is in contact with staff regarding the inquiry.”

Tom Green, an attorney for Gates, didn’t respond to requests for comment. Gates is assisting prosecutors after pleading guilty to committing crimes with Manafort related to their work in Ukraine.

The White House didn’t respond to a request for comment.

The inaugural inquiries are likely an uncomfortable turn of events for Barrack, an investing legend who has long been impervious to the various scandals and crises surrounding Trump, his decadeslong friend. Some employees of Barrack’s firm have already been questioned by federal agents about Manafort as part of special counsel Robert Mueller’s inquiry into Russia election meddling, according to three people familiar with the inquiry.

Questions persist about whether foreign money improperly flowed into the inaugural fund. In August, Sam Patten, a Manafort associate, pleaded guilty to laundering a $50,000 contribution from a Ukrainian oligarch into the committee in exchange for tickets, saying he did so through an unnamed “straw donor.” At the time, representatives for the committee said they had limited tools to vet donors.

Inaugural committees are non-profit organizations that are subject to little oversight. All of the them tend to be chaotic as they raise and deploy huge sums in a short period of time. Trump’s inaugural effort was particularly tumultuous, where a formal organizational chart was frequently ignored and where tensions with the Republican Party’s old-guard festered.

Several Republican operatives, who’d tried to broker truces with the candidate’s staff, found themselves pushed to the sidelines or boxed out entirely, according to four people familiar with the staffing plans. Others who got on the inaugural committee found that chains of command were often subverted by staff from Barrack’s office, three of the people said. But one person familiar with the committee defended its hiring practices, saying the lack of traditional fundraising infrastructure around Trump made it necessary for Barrack to rely on close allies.

One staffer described the stressful months as a “purgatory,” before they would be rewarded with jobs in the administration.

Barrack relished the title of inaugural chairman, but he found many of the tasks tedious, likening the position to that of a wedding planner, according to two people who heard the remarks. That left Gates playing a crucial role in almost everything the committee did, according to several people familiar with his involvement.

Gates’s role perturbed many, because he was known to have a rocky relationship with the president-elect, the result of a billing dispute from the campaign. Still, he was deeply trusted by Barrack, according to five people familiar with their relationship.

The two men centralized decision-making by hosting many meetings at Colony’s New York offices, according to five people with knowledge of the arrangements. As the events drew closer, Barrack would host regular dinners at the Trump International Hotel in Washington. Only favorites got invites, according to two of the people.

Barrack and Gates were thrilled each time they passed another $10 million fundraising threshold. But as the New Year dawned in 2017 and the fundraising haul reached nine figures, they began to worry how to spend it, according to two people with knowledge of the finances. Gates asked vendors on at least two occasions if they’d consider accepting payments directly from donors, the people said. There’s no indication vendors took him up on the offer.

The sheer volume of donations to the inaugural fed the chaos. Rich donors and companies that had assumed Trump had no chance of winning saw the inaugural as a last-chance opportunity to be generous, according to a person familiar with the fundraising effort.

Colony employees and Barrack’s friends were frequent fixtures at the finance meetings. Doug Ammerman, an old friend of Barrack’s served as treasurer, and Ron Sanders, Colony’s general counsel, acted as secretary.

One Colony executive had no formal role at all. Kyle Forsyth, a real estate executive who’d long worked with Barrack and was assigned to solve tough problems: interacting with the U.S. Secret Service, handling the choicest VIPs, and aiding in the preparation of complex outdoor events. He left Colony in February 2018 after more than 15 years with the company.

Barrack paid for the Colony employees’ time working on inaugural events, according to a person familiar with the arrangements. Ammerman and Forsyth didn’t respond to requests for comment. Through a Colony spokeswoman, Sanders declined to comment.

Ticketing procedures for the inaugural were handled by Laurance Gay, who’d previously worked with Manafort and Gates in political consulting. Frank Mermoud, who had Ukrainian business ties and knew Gates, oversaw participation by diplomats.

Gay didn’t have any known experience managing invitations, according to three people familiar with his role, but he’d overseen the Rebuilding America Now super-PAC that Barrack unveiled on CNN during the campaign. After the election, the political action committee continued to pay Gay, who is godfather to one of Manafort’s daughters, $35,000 a month even though the organization was inactive, Bloomberg reported last year.

Mermoud was charged with overseeing the event’s diplomatic corps. It was a reprise of a role he played at the Republican convention, which Manafort led for Trump. Overseeing diplomats was an especially important service at the inauguration, where they were guests of honor at a dinner hosted by Barrack, who’d built business relationships with sovereign wealth funds and others across the globe.

Days after the inauguration, Mermoud asked Barrack to help him obtain a leadership role in the State Department, according to a people familiar with the matter. He’d hoped his experience, plus his attainment of the Eagle rank in the Boy Scouts, might be a plus with then-Secretary of State Rex Tillerson, who’d helped lead the Scouts. Mermoud didn’t get a job.

Gay and Mermoud didn’t respond to requests for comment.

Barrack, a calm, TV-ready presence, served as an unofficial spokesman for Trump during the campaign, making the case for his outsider candidacy to reticent members of the financial and entertainment communities.

As the inauguration neared, he saw reason for celebration. But the vibes in New York and Hollywood, where he has many friends, were decidedly more grim. Barrack told inaugural staffers he would head up an effort to make a sea change of the negative coverage of Trump — personally overseeing interview requests and doling out surrogates to fill them. They’d be selling Trump, he said, and recommended focusing on the possibility of a more friendly business climate and lower taxes, according to people who described the pitch.

Shortly after the inauguration, Colony weighed a plan — that was never executed — to open a Washington office to parlay its White House and international ties into infrastructure contracts, according to a document obtained by Bloomberg News and ProPublica.

A year later, as Barrack’s team prepared to publish the committee’s tax documents, that optimism was gone. It was time for damage control.

Barrack and his team provided advance notice of the tax filing to reporters who were described among staff as “allied,” according to people with knowledge of the exchanges, and the first stories about the document made scarce mention of the legally imperiled Gates. Instead, they focused on Stephanie Winston-Wolkoff, a New York event planner and friend of Melania Trump, who was let go as a volunteer staffer to the first lady after those stories were published, according to a report earlier this month in Vanity Fair.

Unpleasant inquiries from reporters were to be dealt with in curt fashion, the late January 2018 draft shows. For instance, if a reporter were to ask, “Who selected the staff?” The proposed answer was, “All staff were hired and vetted appropriately.”

When the inevitable questions came about why the Trump inaugural cost so much more than previous ones, the committee had a ready answer for that too: “We will not make comparisons to prior inaugurations.”

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