(Daily Beast) – This week, the campaign committee for Rep. Jim Jordan (R-Ohio), received ten notices from the Federal Election Commission flagging discrepancies on its books totaling nearly $3 million and dating back over two years. The campaign claims that the errors slipped through the cracks amid a record fundraising surge and that it actually has more money on the books now, but experts say that the dollar amount—errors totaling some $2.87 million—may trigger an FEC investigation.
The errors also appear connected to newly developed, largely hidden payment systems in the murky world of Republican digital advertising, where vendors not only receive direct spending but take cuts from fundraising as well.
The notices, sent in batches between Feb. 28 and March 2, come in reply to more than a dozen amended reports correcting errors that the campaign caught in a sweeping review of filings, going as far back as 2018. One of the filings discloses errors in spending and fundraising totaling $1,470,286.48.
The commission gave the campaign until early April to reply, and the letters say that a failure to “adequately respond” could draw an audit or enforcement action.
Campaign spokesperson Kevin Eichinger provided The Daily Beast with a statement spinning the corrections as a positive sign and laying the blame on the campaign’s longtime treasurer, Ohio-based tax and business law specialist James Kordik, who was replaced when Jordan hired Republican operative Thomas Datwyler as campaign treasurer last July.
“The campaign has filed an amendment with the FEC to correct its campaign finance reports going back to 2018. There was never any money missing from the account,” Eichinger said. “In fact, the campaign’s cash balance is actually higher than previously listed on the campaign finance reports. The error occurred when the former campaign treasurer inadvertently double-reported certain fundraising expenses. When the error was discovered, the campaign hired an outside expert to conduct a comprehensive audit and file the appropriate amendments.”
Kordik did not immediately respond to a request for comment.
The campaign did indeed ramp up its fundraising in 2020. In the 2016 cycle, before Donald Trump was elected, the Jordan campaign received a little over $733,000 and spent about $423,000, according to FEC records. Jordan’s congressional district has long been considered solidly Republican, a seat he has won by at least 60 percent for several cycles. But his profile rose in the Trump years as Jordan regularly appeared in conservative media to burnish his brand as a fierce critic of the Democratic agenda, a strategy that opened the fundraising floodgates.
His numbers increased for the 2018 cycle, pulling in $1.24 million and paying out about $1.8 million. But in 2020, they soared: he raked in $18.6 million and spent $13.2 million, and now sits on a $6 million stash. Jordan shelled out more than$12.4 million to finance his own operation, transferring only $180,000 to other committees, mostly to the Ohio GOP.
Campaign finance experts say that the errors are significant enough that, if the rising conservative star can’t offer a sound explanation, the FEC will likely refer the matter to its enforcement arm. Such a move would not be publicly disclosed.
“Jordan’s campaign appears to have had systemic reporting problems over multiple years, and these amendments represent substantial shifts in the campaign’s disclosed fundraising and spending,” Brendan Fischer, director of reform at the Campaign Legal Center, told the Daily Beast. “I suspect that the FEC will closely review discrepancies of such a significant amount.”
Brett Kappel, campaign finance attorney at Harmon Curran, said that the reports appear “so substantially incorrect” that the FEC may order an audit.
“The legal standard to trigger an FEC audit is high: whether filings meet the threshold for ‘substantial compliance’ with the law,” Kappel explained. “Jordan’s FEC reports were so substantially incorrect over such a long period of time that they may meet the standard.”
Jenna Grande, press secretary for Citizens for Responsibility and Ethics in Washington, a D.C.-based nonprofit watchdog, said, “This is a very large amount of money in discrepancies. While there is still much to learn about this situation, Rep. Jordan’s campaign needs to provide a full accounting of what happened and why.”
The campaign’s current explanation is incomplete and somewhat contradictory. For instance, it mentions spending errors but doesn’t explain significant errors in the campaign’s fundraising, which the FEC says was off by a total of $1,280,852.36—nearly half of it in the campaign’s July 2020 quarterly report, Kordik’s final filing. Some amendments show increases in receipts, and some show decreases.
The statement also doesn’t appear to account for the appearance of a $20,000 transfer to the Ohio Republican Party made in October 2018, according to one of the amended reports.
The confusion may be tied to backdoor vendor payments in GOP digital fundraising setups. On Tuesday, the Washington Post reported that shady consulting firms have been taking payments out of fundraising. It amounts to a sort of royalty arrangement: The more money that candidates raise, or the more viral they go, the bigger the cut for the media vendor who made that happen.
Those fees were hidden via payments to WinRed, according to the report, which features consulting firm Olympic Media, a vendor that would get a portion of fundraising proceeds collected via the WinRed platform. Some campaigns only reported the WinRed fees but didn’t separately itemize Olympic’s “royalties” on that fundraising.
The report specifically mentions Jordan, who, according to WinRed, “misreported expenses paid to vendors.” Indeed, one of Jordan’s amended reports details more than $200,000 in payments to Olympic Media that the original report had not itemized. The campaign’s statement to The Daily Beast points out that Kordik had double-counted “certain fundraising expenses.”
According to that statement, Jordan’s massive digital marketing push overwhelmed the 65-year-old Kordik, who appears to have filed a number of erroneous reports in his final two years with Jordan. Those errors appear to overlap directly with the hiring of two firms—WinRed, and Campaign Solutions, a Republican-aligned consulting firm based out of Arlington, Va., also specializing in digital strategy and fundraising. Founded in 2003, the firm pulled in nearly $37 million from Republicans last year, with Jordan accounting for about a third of that amount—that’s about two-thirds of his own fundraising totals.
Campaign Solutions also accounts for a number of spending discrepancies.
For instance, Jordan tapped Campaign Solutions in the 2018 cycle, paying a total of about $279,000 over about six months, according to OpenSecrets. The FEC flagged around $253,000 combined in two of Jordan’s amended reports from that year: one of them, coverings the weeks after the 2018 election, introduces an extra $109,000 in disbursements to the firm; the other, which accounts for the last five weeks of the year, says that the campaign had actually paid Campaign Solutions $130,000 less in that period than originally reported. That amended year-end report also adds the $20,000 transfer to the Ohio Republican Party.
At the time, Datwyler worked at Campaign Solutions as an accountant. He appears to have left sometime in early 2020, before he took up with Jordan, but while he was employed at the fundraising firm he also acted as treasurer for dozens of political committees. His current portfolio comprises 165 committees, nine formed this year, including groups backing high-profile conservatives Sen. Josh Hawley of Missouri and Rep. Mike Lee of Utah. In 2020, Datwyler’s firm, 9Seven Consulting, pulled in more than $1 million for FEC compliance services.
Notably, Datwyler joined the campaign last July and was there to receive an FEC notice flagging a number of inconsistencies in Kordik’s final filing. The letter told the campaign that it risked an audit if the FEC did not get a reply by September 8, but fillings indicate that Datwyler never responded. The amended version of that report ended up being by far the most egregious of the bunch, with raising and spending errors of more than $1.47 million.
It’s possible that the prospect of that review was too much to undertake at the time, but that would not explain why the campaign appears to have failed even to reply. Datwyler was singled out in a report about so-called “pop-up PACs,” fundraising groups created in the weeks before an election, allowing them to avoid disclosing their donors to the public until the election is over.
Caleb Burns, a campaign finance specialist at Wiley Rein, explained that the mistakes can stack up over time. “FEC reports carry-forward financial information to subsequent reports,” he said. “An error detected in an old report can require a fuller accounting and amendments to numerous additional reports.”
The FEC regained its quorum—and its ability to take enforcement action—in December. “The FEC commissioners themselves must, ultimately, approve any enforcement action,” Burns said. “The lack of a quorum of commissioners until the end of last year meant that FEC enforcement had stalled. That is no longer the case, though the commissioners have a significant backlog of enforcement matters to address.”
An FEC spokesperson declined to comment for this article, citing its policy of not publicly addressing specific matters “for the potential that they may come before the agency in an enforcement capacity.”