Scrutiny turns to George Santos’s campaign funding

As new revelations about the falsehoods Rep.-elect George Santos (R-N.Y.) has told about his background continue to emerge, several peculiarities in the incoming congressman’s finances are facing heavy scrutiny — and could prove to be his greatest liability.

Santos’s finances and financial disclosures are the subject of a federal investigation, reports revealed this week.

“Given that much of Santos’s biography has apparently been fabricated, it’s possible the most troubling components of that fabrication — from a campaign finance perspective, anyway — have not yet been fully revealed,” said Saurav Ghosh, the director of federal campaign finance reform for the Campaign Legal Center.

Santos admitted on Monday to making several false claims about his educational and professional background in his campaign for Congress, after a New York Times report called into question the veracity of much of his résumé.

Despite previous claims that he graduated from Baruch College and worked for both Goldman Sachs and Citigroup, Santos told the New York Post that he “didn’t graduate from any institution of higher learning” and “never worked directly” with either firm.

“A lot of people overstate in their résumés, or twist a little bit,” Santos said in an interview with local radio station WABC-AM. “I’m not saying I’m not guilty of that, I’m just saying, I’ve done so much good work in my career. I’m not a criminal who defrauded the entire country.”

However, the discrepancies in what Santos has said about his background go beyond his résumé, according to recent reports.

After previously claiming to be a “proud American Jew” whose maternal grandparents fled anti-Jewish persecution in Europe during World War II, for instance, Santos told the New York Post on Monday that he identifies religiously as Catholic and that he “never claimed to be Jewish.”

The Nassau County, N.Y., district attorney on Wednesday announced an investigation into Santos over the false claims.

And as questions continue to emerge about all aspects of Santos’s background, his finances and financial disclosure filings are also reportedly being investigated by the U.S. attorney’s office in the Eastern District of New York.

One of most noticeable peculiarities in Santos’s finances is his rapid accumulation of wealth before his run for Congress in 2022, said Jordan Libowitz, the communications director for Citizens for Responsibility and Ethics in Washington.

Santos provided his own campaign with a loan of $700,000, apparently from the $750,000 salary that he reported earning from his company, the Devolder Organization, in his most recent financial disclosure. Santos also reported more than $1 million in dividends from Devolder.

However, during his unsuccessful campaign for Congress just two years earlier, Santos reported having no assets and a salary of $55,000.

“He went from essentially no money in 2020 to millions in 2022,” Libowitz noted.

Santos’s financial situation becomes murkier upon closer examination of his company. The incoming congressman created the Devolder Organization in May 2021, just weeks after his prior employer, Harbor City Capitol, was accused of running a Ponzi scheme by the Securities and Exchange Commission. Santos was not implicated in and has denied any knowledge of the scheme.

It remains unclear what exactly Devolder is, as little information exists online about the company and Santos has given several different explanations as to its function. On his campaign website in 2021, Santos described the company as his “family’s firm” and claimed to oversee assets worth $80 million there.

However, in an April interview with the Daily Beast, Santos suggested that he created the Devolder Organization to help former Harbor City employees “who were left adrift.”

On his 2022 financial disclosure form and in a recent interview with Semafor, Santos described Devolder as a capital introduction business that included “deal building” and “specialty consulting” for “high net worth individuals.”

Santos also suggested to Semafor that the Devolder Organization explained his rapid accumulation of wealth, saying he “landed a couple of million-dollar contracts” within the company’s first six months.

The Devolder Organization was dissolved in September of this year for failing to file an annual report. However, after the Times’s Dec. 19 report about Santos, the company was reinstated on Dec. 20, according to the Florida Department of State.

“We don’t know very much about this business that he said he created, made millions off of, then folded,” Libowitz noted. “It doesn’t seem to have had any footprints anywhere.”

Libowitz and Ghosh both suggested there is a possibility the company was not legitimate and was used to get around campaign finance limits.

While corporations and individual donors face strict limitations on how much they can contribute to campaigns, candidates can give an unlimited amount to themselves.

“If that income wasn’t bona fide and was actually part of a scheme to funnel money into and bankroll his campaign (which is possible though we do not know for certain just yet), that would constitute a brazen violation of federal campaign finance laws,” Ghosh said.

Despite the backlash over the false claims about his background, several calls for his resignation and the multiple investigations he’s facing, Santos appears unlikely to step aside before he joins the ranks of Congress next week.

“It was an honor to tour the United States Merchant Marine Academy in Kings Point today,” Santos said in a tweet on Wednesday. “In Congress, I look forward to working alongside them to fully utilize this amazing resource we have in our own backyard in #NY03.”