On Wednesday evening we all learned that the DOJ (EDNY) and the Long Island District Attorney have each opened criminal investigations into Republican Congressman-elect George Santos. The timing was interesting to say the least. Plenty of politicians lie – some of them lie constantly – and it’s not a crime in the eyes of the law. Yet here we suddenly have prosecutors, on a federal and local level, launching criminal probes into this guy.
You wouldn’t expect prosecutors on any level to go after a member of Congress unless they think they’re going to find an actual crime, right? Otherwise it would be embarrassing for them if, after a lengthy investigation into Santos, they end up announcing that he’s just a liar and not a criminal.
So why did the Santos scandal suddenly rise to the level of a criminal investigation now? Why not last week? Why not next week? What’s changed in the past twenty-four hours? We’ll have to wait to find out; even if prosecutors have hit on something, they may not tip their hand right away, until they’ve worked through witnesses and such.
But here’s the thing: it’s always about the money. Yesterday, political startup Semafor published a lengthy expose about how Santos went to work for a Florida company, which the SEC busted in early 2021 for being an alleged multimillion dollar Ponzi scheme. Interestingly, Santos quit that company just before it got busted, and then he quickly founded his own highly questionable Florida company. His own company then went on to loan $700,000 to his 2022 campaign for Congress.
None of this is necessarily new. In fact the Daily Beast connected some of these dots all the way back in April of 2022. But what’s jumping off the page over the past twenty-four hours is that Santos funded his campaign with income that may have been fraudulently obtained – and that’s a good way to get yourself in legal trouble.
Simply put, the rules are tighter when it comes to campaign money than with any other kind of money. A lot of observers suspect that one of the reasons Donald Trump waited so long to finally announce his 2024 campaign was that as long as he didn’t actually announce anything, the quasi-campaign donations he was taking in were subject to less regulatory scrutiny.
Now it turns out George Santos has a money trail that starts with his involvement in a Ponzi scheme company, shifts to the startup company he founded just as the Ponzi scheme company was getting busted, and ends with him steering money from his startup company into his campaign.
That’s enough of a money trail for local and federal prosecutors to follow. We’ll see whether or not they find any criminality along the path of that money trail. Not all shady financial moves are illegal. But prosecutors just presumably think they’ve hit on something or are going to hit on something, or else they surely wouldn’t be announcing that they’re launching criminal investigations into an incoming member of Congress.
Bill Palmer is the publisher of the political news outlet Palmer Report