Steve Bannon’s Shadow Press Office May Violate Federal Law

In an arrangement prominent ethics experts say is without precedent and potentially illegal, the White House is referring questions for senior presidential adviser Stephen K. Bannon to an outside public relations agent whose firm says she is working for free.

Alexandra Preate, a 46-year-old New Yorker and veteran Republican media strategist, describes herself as Bannon’s “personal spokesperson.” But she also collaborates with other White House officials on public messaging and responses to press inquiries. It was Preate who responded when the Center for Public Integrity recently asked the White House Press Office questions about Bannon.

Preate, however, is not employed by President Donald Trump’s administration or paid by the federal government.

The unorthodox setup means Bannon, Trump’s chief strategist, is potentially violating the Antideficiency Act, which provides that federal employees “may not accept voluntary services for [the] government or employ personal services exceeding that authorized by law.”

The revelations about Preate’s work are the latest controversy to embroil the White House Communications Office, which is reeling from a series of high-profile resignations, firings and leadership changes in recent days.

To be sure, it’s not uncommon for executive branch employees to hire personal lawyers who aren’t on the government’s payroll, but who nonetheless advise their clients on government work-related matters. The difference is that personal lawyers don’t step in to help the White House perform its official duties.

Preate, however, “appears to be organizing the administration’s response to questions sent to the White House,” said Kathleen Clark, a law professor at Washington University in St. Louis and an expert in government ethics. “And the fact that other officials are responsive to her distinguishes this situation from the kind of activity a private lawyer would do.”

Said Norm Eisen, ethics czar during the Obama administration: “She seems to be privy to government information, and she appears to be acting on behalf of a government entity, either Bannon or the White House Press Office. If she’s doing it for free, then that is a potential violation of the Anti-Deficiency Act.”

To date, no one has ever been convicted or indicted for violating the Anti-Deficiency Act, and most of the dozen or so violations reported each year result in little more than administrative penalties. Still, a “knowing and willful violation” of the Anti-Deficiency Act is a Class E felony, punishable by a “$5,000 fine, confinement for up to two years, or both.”

As a private citizen, Preate is not subject to the restrictions imposed by the Anti-Deficiency Act, nor would she be liable for any potential violations. White House officials, on the other hand, are subject to the act.

Preate, the White House Press Office, Bannon aides, the White House Counsel’s Office and the Department of Justice all refused to answer repeated questions from the Center for Public Integrity about Preate’s arrangement with the White House, whether she is working for free, and whether her role has been approved by government lawyers or ethics officials.

Eighteen phone calls

The Center for Public Integrity first became aware of Preate’s role earlier this month after sending an email to White House Deputy Press Secretary Lindsay Walters with questions about Bannon’s personal financial disclosure.

Minutes later, Walters replied to say the White House Press Office was “working to get you a response.” Walters copied Julia Hahn, a White House deputy policy strategist and former Breitbart reporter who works closely with Bannon.

Instead of receiving a response from Walters or Hahn, the Center for Public Integrity received a phone call from Preate, who said that she was calling “for Steve.” Preate later arranged a call for the Center for Public Integrity with a member of the White House Counsel’s Office, who addressed questions about Bannon’s financial disclosures.

From July 11 through July 13, Preate called the Center for Public Integrity 18 times about the story. During these conversations, Preate would only agree to speak off the record, which is why the Center is not reporting on the content of the calls.

“We would never have tolerated this in the Bush White House,” Tony Fratto, a former principal deputy press secretary for President George W. Bush, said of the Trump White House’s arrangement with Preate.

In addition to the ethics issues, Fratto said in an interview with the Center for Public Integrity, Preate’s role would have caused problems within the White House Press Office itself.

“From an operational perspective, a situation like this would be difficult to manage, because it’s an uncoordinated messaging channel that isn’t being overseen by the White House communications office,” Fratto said.

“If a comms director doesn’t have control over who is doing the messaging, then you get contradictory information and disjointed messaging, and that’s a problem,” he added.

Indeed, the struggles of the Trump White House to coordinate an effective communications strategy have been monumental. In just the past week, the White House Press Office has been upended by the sudden resignation of White House press secretary Sean Spicer, the surprise appointment of New York financier Anthony Scaramucci as White House communications director and the messy dismissal of senior assistant press secretary Michael Short.

In his first briefing as communications director on Friday, Scaramucci promised a new era of discipline in the White House press office. He also pledged to get the entire communications staff “super-coordinated around here with the president” and his message.

If that’s Scaramucci’s plan, then Bannon, who reportedly objected to Scaramucci’s hiring, may be in for a fight.

See Steve Bannon’s Life in Pictures

Who’s paying the bills?

There are good reasons why the government is required to officially hire, and pay, the people who work for it.

Bannon “took an oath to support and defend the Constitution,” Clark said.

But Preate has not taken such an oath. This means “the public has no idea who, if anyone, is paying this piper,” she added.

Preate is the founder and CEO of a New York-based public relations firm, Capital HQ, whose marquee client is the conservative news and opinion website Breitbart News.

Bannon ran the conservative news site until he joined Trump’s campaign last year. He states on his government financial disclosures that he officially resigned from Breitbart in August, but Breitbart CEO Larry Solov said Bannon didn’t resign until after Trump won the election in November.

“If Preate’s firm works for Breitbart, then is this arrangement part of a continuing relationship of some kind between Breitbart and Bannon?” Eisen said. “Is Breitbart paying for this?”

In addition to Breitbart, Preate has reportedly represented prominent Republican political donor Rebekah Mercer, whose billionaire family is a part-owner of Breitbart. She has also been quoted in news stories as “a friend” of Mercer.

Bannon has a longstanding personal and professional relationship with the Mercer family, who reportedly convinced Trump to put Bannon in charge of his campaign last summer.

As of March 31, Bannon had not yet sold his stakes in at least two companies he co-owns with members of the Mercer family: The movie production company Glittering Steel LLC, and the influential GOP big data firm, Cambridge Analytica.

Neither the White House nor Preate would confirm whether Bannon has sold his stakes in the two Mercer-linked companies since March.

The Mercers were also among Trump’s most influential bankrollers. During the 2016 election cycle, the Mercers spent $22 million to support Republican candidates, and they funded a super PAC, Make America Number 1, that backed Trump’s general election bid.

Zero-to-60 on the Trump train

Preate may not be a household name, but she has deep roots in Republican politics.

Her father, Ernie Preate, was twice elected Attorney General of Pennsylvania as a Republican. In 1994 he ran for governor, losing the nomination to then-Rep. Tom Ridge, who would go on to win in the general election.

But Ernie Preate’s promising career in politics ended abruptly the following year, when he pleaded guilty to mail fraud in a federal case involving illegal campaign contributions. He served 11 months in prison, and has since become an advocate for prison reform.

It’s not clear exactly when Bannon and Alexandra Preate’s professional relationship began.

In March of 2016, Breitbart spokesman Kurt Bardella abruptly resigned. Almost immediately, publicists at Preate’s firm, Capital HQ, were quoted as representatives of Bannon and Breitbart.

By July of 2016, then-Capital HQ associate Garrett Marquis was busy promoting Clinton Cash, a movie based on a book by Peter Schweizer, who runs a Mercer-funded group called the Government Accountability Institute. The film version of Schweizer’s book was released on Breitbart.com, and it was co-produced by Bannon and Rebekah Mercer through their joint production company, Glittering Steel LLC.

In August, Preate first appeared in a news story as a spokeswoman for Bannon. This was a few days before Trump officially named Bannon CEO of his presidential campaign. When Politico reported that Bannon had been once been charged in a domestic violence incident, Preate issued a statement in Bannon’s defense.

The following day, Preate again spoke on behalf of Bannon. This time, Preate’s flacking came after The Guardian reported Bannon did not actually live at the address where he was registered to vote.

Later on, if news organizations described Bannon as a Trump campaign staffer, it was Preate — not a Trump campaign representative — who would push back, reminding reporters that Bannon was offering his services to Trump for free. “He is a volunteer — as CEO,” she wrote to a reporter for The Daily Beast in October.

Throughout the final months of the campaign, Preate appeared in media reports identified only as a “Bannon spokeswoman.” But behind the scenes, Preate’s team at Capital HQ worked hard to promote Bannon.

This included offering interviews to reporters with people who would say nice things about Bannon, and touting how well Breitbart had performed under Bannon’s leadership.

Since Bannon joined the Trump administration, at least one news outlet, New York magazine, has reported that Preate joined the White House with him.

But Preate does not work for the White House, said Chad Wilkinson, the current president of Preate-owned Capital HQ who also serves as Breitbart’s spokesman. Nor has Preate filed any of the government-mandated disclosures required for federal employees.

Preate moved to Washington in January “to work for Bannon after Trump took office,” Wilkinson said in an interview with the Center for Public Integrity. Preate’s Twitter page lists her as living “in DC.”

Wilkinson and other Capital HQ associates began speaking on behalf of Breitbart in Preate’s absence.

Preate “has never received a dime” from Bannon in exchange for her work on his behalf, Wilkinson said.

But as Capital HQ’s founder and chief executive officer, Preate continues to profit from the Breitbart representation, Wilkinson said.

Friends with money

For Virginia Canter, an attorney for Citizens for Responsibility and Ethics in Washington and a former government ethics lawyer, Bannon’s situation raises the question of whether Preate’s clients are effectively supplementing Bannon’s salary.

“The question is whether there is some kind of arrangement among Bannon, Breitbart and Preate that enables Preate to provide public relations services to Bannon and the White House, without compensation from either Bannon or the White House,” she said in an interview with the Center for Public Integrity.

Bannon and Preate refused multiple requests from the Center for Public Integrity to answer this specific question.

Canter served as associate counsel to the president during the Obama administration, associate director of the Office of Foreign Assets Control at the Treasury Department during the George W. Bush administration and associate counsel to the president during Bill Clinton’s administration.

According to Eisen, Clark, Canter and others, Bannon’s acceptance of Preate’s services could also violate 18 U.S. Code section 209, a law commonly known as the salary supplementation ban. This law “prohibits employees from being paid by someone other than the United States for doing their official Government duties,” according to the Office of Government Ethics.

“If this gift of valuable public relations consulting services is being provided to Bannon by Preate or by others, then that is compensation that could be viewed as supplemental compensation on top of his salary as a member of the executive branch,” Eisen said. “And that is not permitted.”

This is not the first time that questions have arisen over whether Bannon is maintaining ties to Breitbart that violate executive branch ethics rules.

Within weeks after Trump took office in January, reports began to emerge that Bannon was contacting Breitbart staffers in an attempt to influence how the site was covering Trump’s administration.

The contact appeared to violate the Ethics Pledge Bannon had signed as a condition of his employment in the Trump White House. The pledge expressly prohibits newly hired officials, like Bannon, from having contact with their previous employers.

In late March, Citizens for Responsibility and Ethics in Washington sent a letter to White House Counsel Don McGahn, requesting an investigation into whether Bannon had violated the Ethics Pledge.

Rather than reprimand Bannon, the White House in May released what it said was a retroactive, blanket ethics waiver. Such a waiver allowed executive branch employees who had previously worked for media organizations — such as Bannon at Breitbart — to ignore longstanding federal rules that prohibit government employees from communicating with their former employers.

Unlike every ethics waiver that had ever been granted before it, however, this one did not have a signature on it. Nor did it have a date to show when it went into effect.

Friends with benefits

Even if Preate’s services were to be viewed as simply a gift, and not salary supplementation, they could still violate executive branch ethics rules that bar government employees from accepting gifts from outside sources, said Brendan Fischer, who leads the federal ethics and election law reform project at the nonprofit Campaign Legal Center.

“There’s a more general executive branch prohibition on accepting gifts that seems to apply here,” Fischer said in an interview.

This prohibition also contains a number of important exceptions, said Tom Fitton, president of Judicial Watch, a conservative nonprofit group that promotes transparency and accountability in government.

“The rules allow for the pro bono provision of services when they’re from friends,” he said in an interview, an exception that he said could prove relevant to Bannon and Preate. It states that a government employee may accept “a gift motivated solely by a family relationship or personal friendship.”

Still, Fitton acknowledged that the unresolved questions of who is paying for Preate’s services, or whether anyone is, muddying issues around personal gifts.

Also complicating matters: Preate’s position as the founder and CEO of Capital HQ, said Walter Shaub, who served as director of the Office of Government Ethics during the first six months of the Trump administration. He now leads the ethics practice at the Campaign Legal Center, a nonpartisan political watchdog organization.

Additionally, Shaub said, “If there’s a history of Bannon having paid for her professional services, this further undermines the argument that this is a gift motivated solely by Preate’s personal friendship with Bannon.”

“At a minimum,” he said, “this blurs the lines between Preate’s firm and her gift of pro bono public relations services.”

Still, the prospect that Preate could be gifting her services to Bannon does little to resolve the question of why she is responding to questions sent by reporters to the White House Press Office.

Under President George W. Bush, the issue of how the White House handled ethics questions from reporters was never in question, said Fratto, the former Bush press official.

Fratto recalled the hiring of Ed Gillespie, a Bush adviser who’s now running for Virginia governor. Gillespie had founded a public relations and lobbying firm, Quinn Gillespie & Associates, before joining the Bush administration.

“He had a whole PR firm behind him, but I was the one who handled questions about his personal finances,” Fratto said. “I don’t think it ever occurred to anyone to have Quinn Gillespie handle it. Those were ethics questions for the White House.”

In the absence of any explanation from the White House about Preate’s role, both Eisen and Clark say they hope other federal agencies and Congress will investigate the situation.

“The Justice Department should look at this,” Eisen said, “and I hope they’ll get some answers to these questions.”

This story is from the Center for Public Integrity, a nonprofit, nonpartisan investigative media organization in Washington, D.C. Follow it on Twitter.