Chris McDaniel Returns $465K in Questionable Donations, Shuts Down Political Action Committee

Jackson, Miss. (WJTV) – Lieutenant governor candidate Chris McDaniel has reported returning legally questionable large donations from a Virginia dark-money nonprofit, and shutting down his PAC through which the donations flowed to his campaign.

McDaniel’s Hold the Line PAC has reported it returned $460,000 to the American Exceptionalism Institute nonprofit corporation and closed out the PAC. This came days after McDaniel’s campaign account returned $465,000 to Hold the Line.

McDaniel’s Hold the Line PAC campaign finance public filings and subsequent explanations and amended reports have been confounding. Hold the Line initially failed to list the source of hundreds of thousands of dollars and its reports have had amounts and dates that don’t add up. For instance, Hold the Line reported having raised hundreds of thousands of dollars the year before McDaniel legally registered it with the secretary of state’s office, and failed to list the source of that money as required by law.

McDaniel’s PAC was the largest contributor to his lieutenant governor campaign, donating $465,000 of the $710,000 his campaign reported raising last year.

Oddly, in some of its latest filings, Hold the Line reported it returned $460,000 to American Exceptionalism Institute on the same day it received the second of two donations of $237,500 from AEI, in February. But McDaniel’s campaign had reported it received a total of $465,000 from Hold the Line in January, before the PAC would have had that much money — primarily coming from AEI — per its own reports.

When questioned about this, McDaniel’s camp declined comment, but filed an amended report changing the date of the second donation to mid-January. Even with multiple amended reports, it appears McDaniel’s PAC received $475,000 from AEI but returned only $460,000 to the nonprofit corporation.

Lt. Gov. Delbert Hosemann’s campaign has a complaint pending with the attorney general’s office that includes claims that McDaniel’s PAC and campaign violated Mississippi law, which prohibits a corporation from donating more than $1,000 in a single year to a candidate or PAC and requires listing of sources of donations.

Hosemann campaign adviser Casey Phillips in a statement said: “Chris McDaniel’s campaign is based on a lie, staffed with Democrat operatives, and funded with illegal money. Election integrity includes campaign finance transparency. McDaniel would know that if he bothered to show up to vote when the Senate passed the election security package. Instead, he is blatantly disregarding Mississippi’s election laws.”

A spokeswoman for Attorney General Lynn Fitch’s office, asked for comment on Hosemann’s campaign finance complaint, said only, “We are reviewing it.”

A Mississippi Today article in February pointed out McDaniel’s financial reports for his campaign and PAC left voters in the dark about the source of hundreds of thousands of dollars and raised questions about whether donations violated state law.

McDaniel, a four-term state senator, has vocally called for stricter campaign finance laws and more transparency in the sources of campaign money. But when questioned about his campaign and PAC finances, he said he knows scant details about them, has deferred questions to staffers and chalked up any discrepancies to “clerical errors.”

McDaniel initially deferred questions to the Rev. Dan Carr, a pastor and political consultant from Gulfport listed as treasurer of the Hold the Line PAC. Carr, mostly by text messages, gave a series of confusing and conflicting statements that never explained what the clerical errors were, or the source of the large amount of unaccounted for donations to Hold the Line.

McDaniel’s campaign last month said that U.S. Supreme Court rulings on federal campaign finance issues nullify Mississippi’s law banning corporate contributions over $1,000. But a spokeswoman said McDaniel’s campaign and PAC would be returning American Exceptionalism Institute donations “to avoid a protracted legal fight with the establishment.”

Hosemann filed his campaign finance complaint against McDaniel last month with the secretary of state’s office. Records show the secretary of state’s office, citing its lack of investigative and prosecutorial authority, forwarded the complaint to the criminal investigations division of the attorney general’s office.

An intentional violation of the campaign finance disclosure law is a misdemeanor with a
maximum penalty of $3,000, six months imprisonment, or both. But in Mississippi, campaign finance laws are seldom enforced, and alleged violations seldom investigated or prosecuted.

Hosemann, former secretary of state, is seeking a second and final term as lieutenant governor overseeing the state Senate. McDaniel is a four-term state senator who has run twice unsuccessfully for U.S. Senate.

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