While advising Trump on judges, Conway sold her business to a firm with ties to judicial activist Leonard Leo

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décembre 20, 2022

Longtime judicial activist Leonard Leo appears to have helped facilitate the sale of former White House senior adviser Kellyanne Conway’s polling company in 2017 — as she was playing a key role in advocating for Leo’s handpicked list of Supreme Court candidates, according to previously unreported financial documents reviewed by government ethics and finance experts.

The transaction came at a critical moment for Conway — shortly after her ownership of The Polling Company had come under scrutiny from a congressional oversight committee for potential “conflicts of interest,” likely creating pressure to unload it even though its value was unclear because she was its biggest asset and committed to her White House job.

It appears Leo, via one of his dark money groups, helped finance the transaction between the firm, Creative Response Concepts Inc., and Conway — worth between $1 million and $5 million, according to experts citing the timing of the transactions filed through the same attorney and bank. At the time, CRC was also bringing in millions of dollars from dark money groups to promote Leo’s picks.

It’s the latest example of how Leo has used his network to secure and protect allies at the highest levels of government to successfully advance his decadeslong agenda of shifting the Supreme Court rightward for the next generation. Conway was among a small circle of advisers with outsized influence over a newly elected president whose commitment to overturning major precedents like the right to abortion was in doubt by some social conservatives. While former President Donald Trump — a onetime supporter of abortion rights and former registered Democrat — was considered unpredictable by some social conservatives, Conway proved from the earliest days of Trump’s presidency to be an outspoken advocate for Leo’s list of handpicked candidates.

If Leo helped facilitate the transaction, it could violate ethics laws designed to prevent executive branch employees from obtaining benefits from people with whom they interact in their official capacities, said Bruce Freed, president of the nonpartisan Center for Political Accountability, which tracks corporate spending in politics. Federal ethics laws prohibit executive branch employees from using their positions for private personal gain and from accepting gifts.

“It really shows Kellyanne as a vehicle for Leo, the leading role Leo has played and how Trump became his instrument,” said Freed, after reviewing the documents. 

On the same day of the sale, on Sept. 21, 2017, a lawyer filed liens with Virginia regulators listing collateral for two loans: one for the buyer and the other for a dark money group controlled by Leo, BH Fund. The liens were filed within five minutes of each other.

Government ethics and finance experts say the timing and the similarity of the two transactions suggest that BH Fund, too, may have been involved in the purchase of Conway’s firm.

Leo, through spokesman Adam Kennedy with CRC, declined repeated requests over the span of several weeks beginning in late October to comment on whether Leo played a role in facilitating the purchase. Conway did not respond to repeated emails and text messages requesting comment, although she acknowledged having received an email. CRC Vice President Keith Appell also declined to comment.

“Unfortunately, I don’t think we will be responding to questions around the purchase of the polling company,” Kennedy wrote in an Oct. 31 email.

The Conways and Leo have longstanding ties. At the time of the sale of Conway’s company, Leo was executive vice president of the Federalist Society, the conservative legal group for which many of Trump’s judicial appointees were members. Conway’s husband, George, was a longtime friend of Leo’s and one of the Federalist Society’s earliest members. George Conway also did not respond to a request for comment.

The ties between BH Fund and CRC are substantial. Leo is now a partner and chairman at CRC. The other BH Fund director listed in their corporate filings, Jonathan Bunch, also joined CRC around the same time as president. At the time of the sale in 2017, groups tied to Leo were merely major customers: In total, CRC took in more than $52 million from groups in Leo’s network from 2016 to 2020 — as it was conducting a media campaign to install justices considered reliable votes to overturn precedents including the federal right to abortion, according to a review for POLITICO conducted by nonpartisan organization OpenSecrets.

The financial deal between Conway and CRC adds to an emerging picture of the extent to which groups associated with Leo — who now controls more than $1.6 billion in conservative donor funds — interacted with key players in the conservative movement’s efforts to reshape the judiciary. The New York Times first reported the windfall donation to a Leo-controlled group, among the largest single contributions ever to a political nonprofit.

Leo served on the board of a group led by Virginia Thomas, the wife of Supreme Court justice Clarence Thomas, and he and the Thomases have maintained a longstanding friendship. Leo’s network has been among the most prolific forces behind the new conservative majority, successfully advocating to confirm Chief Justice John Roberts and Justices Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett as well as to block former President Barack Obama’s nominee Merrick Garland.

Ed Whelan, a conservative constitutional law expert and former clerk to the late Justice Antonin Scalia, downplayed the influence Conway may have had over the then-new president at a time when social conservatives were concerned whether Trump — a former supporter of abortion rights whom they considered unpredictable — would keep his promise to appoint Leo’s handpicked candidates.

Trump had already made a “clear and high-profile commitment” to the list months before he assumed office, said Whelan. “It seems bizarre to think that any possible lobbying by Kellyanne Conway would have added to the force of that commitment or to the influence that Mitch McConnell and Don McGahn had already wielded,” he said, referring to the Republican leader in the Senate and Trump’s former White House counsel.

Yet she lobbied inside the White House for the specific conservative justices Leo preferred as part of his decadeslong agenda of shifting the balance of the court sharply rightward, according to news reports, her recent memoir and other public records.

They included Gorsuch and Barrett. Conway joined with legislative director Marc Short and press secretary Sarah Huckabee Sanders in a push for Barrett ahead of Kavanaugh, whom Leo initially had reservations about, according to the book “Supreme Ambition: Brett Kavanaugh and the Conservative Takeover,” by Washington Post columnist Ruth Marcus. Leo was “never a big Brett fan,” Marcus wrote.

During the same time frame Conway was a senior adviser to Trump, she was under pressure to sell The Polling Company. In a May 9 statement, then-House Oversight Committee Chair Elijah Cummings, a Democrat from Maryland, said the White House had not produced evidence of a certificate of divestiture. The sale to CRC a few months later reduced political pressure on her.

Ethics specialists pointed to the possible involvement of BH Fund as a key question looming over the sale.

The financing documents filed by the same lawyer and bank within minutes of each other registered, separately, debts of CRC and BH Fund, including a requirement that BH Fund keep $2.5 million in an account as collateral. BH Fund is a group Leo has used to direct millions of dollars to organizations boosting the nominations of Gorsuch, Kavanaugh and Barrett. As a nonprofit, it is not required by the IRS to disclose its donors but Leo was listed as president in 2017.

Notably, a search of Virginia’s filing system yielded no other BH Fund liens other than the one posted on the date Conway’s company was sold.

After reviewing the 2017 Virginia statements, Timothy Hughes, managing shareholder of Bean, Kinney & Korman, the law firm listed on them, said in an email that he was “not in a position” to comment. He did not respond to subsequent email questions about whether the filings were part of a single transaction.

Brett Kappel, a lobbying and government ethics counsel at the Harmon Curran law firm in Washington who also reviewed the documents at POLITICO’s request, said the transactions appear to be connected.

“Based on the available documentation and the timing of the filings, it certainly appears as though these transactions are related,” said Kappel, who has represented candidates and political committees on both sides of the aisle. Still, Kappel cautioned it may depend on whether Conway was advising the president on court nominations at the same moment she sold to constitute a clear violation of ethics rules.

Kyle Herrig, president of Accountable.US, a non-partisan progressive group that investigates corporate influence in politics and alerted POLITICO to the financial records and timestamps, said it was concerned about whether the Leo-affiliated groups rewarded Conway for her advocacy by purchasing her business at a time when its value was unclear.

It also raises “serious concerns” about how Leo will use his new, “no-strings-attached” $1.6 billion windfall, arranged through a series of transactions that appear to have avoided tax liabilities, to influence the White House, Congress and the Supreme Court, said Herrig.

This would be particularly problematic if the firm wouldn’t have otherwise been purchased or wasn’t purchased at fair market value, said Melanie Sloan, a former House Judiciary Committee counsel for Democrats who is now senior adviser to American Oversight, a government ethics watchdog that filed a series of lawsuits against the former Trump administration.

“We don’t know if she received fair market value for the company, and that’s an important question. It also seems she was having trouble selling it, and that alone is a gift if you’re buying something nobody else wants to buy,” said Sloan, after having reviewed the documents. “If you’re just absorbing the employees, you could just hire them. So, what were they buying?” she said.

Conway was largely its name brand. The Polling Company’s then-chief executive, Brett Loyd, continued to consult for the Trump administration but was let go in 2019 and now runs The Bullfinch Group. Contacted by POLITICO, he declined to comment in accordance with a non-disclosure agreement he signed.

Leo left his post as Federalist Society executive vice president in 2020 to become chairman of a newly rebranded CRC Advisors, but he remains co-chairman of the Federalist Society board. He has subsequently devoted himself to cultivating his donor network. The New York Times recently reported that since 2016, “grant-making hubs in Leo’s network and the recipients of their money have paid more than $30 million to the firms owned at least partly by Mr. Leo, CRC and BH Group.”

In further evidence suggesting BH Fund was involved in CRC’s purchase of Conway’s business, two days prior to the sale, the Virginia regulating authority issued certificates of good standing for both entities within three minutes of each other.

It’s not the first time Leo’s BH Fund, seeded by an anonymous $24 million donation, has been the focus of attention for helping to further the interests of the conservative legal movement through wealthy donors. It first gained attention for “being responsible for enforcing a donation agreement between a secret $20 million donor and the Antonin Scalia Law School at George Mason University, whose president came under scrutiny for allegedly allowing donors to dictate academic and hiring conditions in return for financial gifts,” the nonprofit Center for Responsible Politics and MapLight reported.

Leo’s outsized role in promoting conservative candidates for judgeships has come under scrutiny as polls show public confidence in the integrity of the court plummeting. The new conservative majority upended 50 years of precedent on abortion rights and is slated to hear similarly consequential decisions on voting rights, guns and the environment in the coming months.

During the 2016 presidential campaign, Leo crafted a list of potential Supreme Court nominees for Trump to help quell concerns among social conservatives about the candidate, who had repeatedly changed party affiliation and, as recently as 2004, said “in many cases, I probably identify more as Democrat.” Indeed, in the book “The Hill to Die On,” by former POLITICO reporters Jake Sherman and Anna Palmer, it was reported that Trump even privately raised the prospect at several points of appointing Garland, Obama’s ill-fated Supreme Court nominee, to the seat now held by Gorsuch.

In her own memoir, Conway recounts being in a small Oval Office meeting with Senate leadership just two days into the new administration to discuss the seat Republicans had kept open by blocking Garland.

In the meeting, Sen. Chuck Schumer, the Senate Democratic leader, suggested that Trump renominate Garland to “heal the nation.” Trump “skeptically” asked Conway what she thought.

“I don’t think much of it, sir,” she recalled saying.

Days after Trump was elected, Leo was among the first people given a personal meeting with the new president-elect. Conway welcomed Leo to Trump Tower in Manhattan with a kiss on the cheek and then escorted him to lobby media cameras after what she described as a “fabulous” meeting, according to a POLITICO review of C-SPAN footage.

She introduced Leo to the media after the Nov. 16 meeting by putting to rest speculation Trump might select a candidate to fill a Supreme Court vacancy other than one from Leo’s handpicked list of 21 names.

To be sure, Conway was a frequent presence at Trump Tower in the days after the election and appeared in the lobby to escort other important guests such as Rep. Raúl Labrador, who was being considered for a post within the Justice Department, according to a review of C-SPAN livestream footage.

Yet filling the Supreme Court vacancy Republicans had held open by blocking Obama’s nomination of Garland was one of the most consequential decisions facing the newly elected president.

Private payouts to top White House officials have drawn ethical reprimands in the past. In 2016, ProPublica reported that Obama’s chief economic adviser Gene Sperling had borrowed hundreds of thousands of dollars from a top Washington lawyer at below-market rates. It appeared to violate federal rules meant to prevent conflicts of interest, ethics experts said.

Among the questions CRC did not address from POLITICO about The Polling Company is whether it continues to serve major clients. CRC does not list “polling” among its services on its homepage. According to a review of Federal Elections Commission filings by OpenSecrets, no federal political committee has paid CRC for polling services since Conway sold the company, with the exception of a $27,000 disbursement on Feb. 4 of this year. It also found at least $60,000 in 2020 in payments from the Republican Attorneys General Association.

A statement at the time of the purchase from CRC president Greg Mueller regarding the sale said The Polling Company would maintain a D.C. hub. Its current website now lists the same address as CRC in Alexandria, Va.

The main number on The Polling Company’s web page goes to voicemail. A message left there was not returned. Its page also lists 2017 on the footer of its main page. There is no indication Conway returned to her company after leaving the White House in August of 2020.

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