How a New Tax Filing Reveals An Expanding Existential Crisis at CPAC

With Roger Sollenberger, Political Reporter

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This week’s Big Dig . . . How a New Tax Filing Reveals An Expanding Existential Crisis at CPAC.

As American Conservative Union chairman Matt Schlapp took the stage last year at his group’s annual Conservative Political Action Conference, he was facing lots of empty seats—and multiple existential threats.

For starters, The Daily Beast had just revealed that a GOP campaign staffer had accused Schlapp of sexual assault. But Schlapp was also having trouble balancing another problem: the CPAC checkbook.

The Daily Beast obtained the latest long-form tax return for ACU, CPAC’s parent organization, filed last month to cover April 1, 2022, through March 31, 2023. (ACU files on a federal schedule that bleeds across the calendar year.)

The document, which was first obtained by watchdog group Citizens for Responsibility and Ethics in Washington and shared exclusively with The Daily Beast, shows negative revenue on the year, and despite some newly adopted changes to the group’s accounting methods, reflects a notable drop in CPAC returns and steep losses across the board.

Social conservatives

Well before CPAC 2023 opened, it was clear from media coverage that attendance and sponsorships both suffered after the assault allegation and lawsuit. Less than two months before the event—billed as “the most influential gathering of conservatives in the world”—former Herschel Walker campaign staffer Carlton Huffman went public with his story, telling The Daily Beast in early January that Schlapp had “pummeled” his crotch against his will while Huffman chauffeured the conservative icon back to his hotel in October, following a late night of drinking in Atlanta. Ten days after The Daily Beast broke the story, Huffman followed through with his threat to sue Schlapp, and added defamation claims against his wife.

ACU did not reply to The Daily Beast’s detailed comment request. The Schlapps, through attorneys, court filings, and surrogates, have denied any wrongdoing, characterizing the allegation as a political smear designed to harm the organization.

The vacuum of attendees and sponsors at CPAC 2023 was so abrupt and large that it dominated news coverage and commentary of the once storied conference. The new tax return now puts a price on that exodus, in bright red ink.

Fiscal conservatives

According to the filing, ACU’s program revenue dropped by more than half over the prior year, from $11.7 million to $5.4 million. That marked the nonprofit’s lowest program income since the anomalous 2018 event, when backlash to Trump and right-wing affiliations cratered attendance. (This year’s event featured Nazis openly hobnobbing among attendees.)

CPAC itself—like the previous year, there were not just one but two U.S. gatherings—brought in less than $2.5 million, the document states, or about half the conference income ACU reported on its previous filing. The $1.6 million loss from those program services drove ACU into the red—a rare money-losing year for the organization, which depends on CPAC as a key engine of public support.

Five-hour energy

Meanwhile, ACU’s salaries went up.

In 2023, the group reported paying its employees nearly $600,000 more than it had the year before. The revenue earned from CPAC barely covered the nearly $2.2 million that the organization doled out to its 13 highest earning employees.

Schlapp’s personal income also increased. In fact, for the first time in his eight-year chairmanship, Schlapp took home a salary, with the document claiming he received $350,000. (This aligns with reporting that Schlapp commanded a $600,000 annual salary, starting midway through this reporting period.) His wife, conservative commentator and activist Mercedes Schlapp, brought home around $180,000 for strategic communications work.

The filing states that Schlapp earns his $350,000 keep with a solid five hours of work each week and does not have a written contract.

FARA faucet

While it’s unclear how Schlapp spends the majority of his work weeks, a separate business proposal from his private public affairs firm, obtained independently by The Daily Beast, shows that the nonprofit leader was simultaneously seeking $40,000 a month from a Japanese corporate client involved in real estate and cryptocurrency.

The proposal, dated April 21, 2022, detailed an arrangement explicitly designed to skirt laws that would require Schlapp to file lobbying disclosures or register as a foreign agent.

Those financial trajectories—ACU’s revenue dropping and Schlapp’s private take rising—collided with Huffman’s allegations and the ensuing lawsuit, sparking several high-level departures and testing Schlapp’s scaffolding of loyalists. Upon leaving, two longtime ACU board members penned scathing resignation letters that assailed Schlapp for withholding critical information from his own organization despite numerous entreaties for transparency.

Creative accounting

Both officials also contended that Schlapp’s alleged mismanagement violated his own group’s bylaws and would present a ripe target for law enforcement, citing systemic financial murkiness, Huffman’s allegations, and the nonprofit’s role in funding the high-powered attorneys Schlapp and his wife retained to fight the lawsuit.

The names of both those former officials—longtime ACU treasurer Bob Beauprez, and vice chair Charlie Gerow—are missing from the latest return, even though their resignations came after March 31, 2023, and they were officials throughout the reporting year. In fact, twenty names vanished from the prior year’s list of officers and key employees, leaving just five holdovers on the roster. They include more than a dozen officers and board members who served throughout the covered reporting period. Some but not all of them left the organization later, many in protest of Schlapp.

In a resignation letter submitted last May, obtained by New York Magazine, Beauprez expressed skepticism that CPAC had made money.

Beauprez also raised internal concerns about inconsistencies in the work of a Republican operative that Schlapp brought on to handle ACU’s books following the resignation of former finance chief, Ryan McGowan. The filing, which was signed by secretary Matt Smith and prepared by a Virginia-based CPA named Robert Ben-Kori, features various new changes in the group’s accounting methods—changes which make it specifically difficult to gauge the true depth of the damage to the organization’s crown jewel.

For instance, the form states that the ACU spent a grand total of $148,542 on “conferences, conventions, and meetings” last year. That number appears impossibly at odds with the simultaneous claim of a $450,000 “conference event” expense to rent out the Hilton Anatole for CPAC’s summer 2022 gathering in Dallas. Meanwhile, travel expenses mysteriously topped $1.4 million. That’s more than 10 times the previous year’s travel costs, and more than the ACU reported spending on travel in all tax returns from the previous decade, combined—by a full $200,000.

This is an excerpt. Plenty of other details can be found in the full version, here.

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From Roger’s Notebook...

What’s in a name? This week, the Federal Election Commission notified a new leadership PAC attached to Rep. Marjorie Taylor Greene (R-GA) that its name may be in violation of federal rules.

According to the letter, the new PAC’s handle—“MTG for Georgia Leadership Committee”—is not permissible, because it “includes the name of a Federal candidate,” which is not allowed for unauthorized committees like leadership PACs.

However, The Daily Beast has learned that Greene’s team plans to file a reply arguing that the name should be allowed to stand. For one, the PAC uses her initials, but also, it turns out that a surprising number of leadership PACs use the sponsoring candidate’s name.

Leadership PACs often get around this by devising names that work as acronyms for the candidate, sometimes really forcing it. For instance, Roll Call reported that each party has its own “GREG PAC”—“Getting Republicans Elected for Generations,” belonging to Rep. Greg Steube (R-FL), and “Getting Results by Engaging the Grassroots,” for Rep. Greg Stanton (D-AZ).

But other LPACs use the candidate’s name outright. The LPAC for Rep. Jerry Nadler (D-NY) is called “Jerry’s PAC,” and it has not received a similar notice from the FEC. There’s also Rep. Brett Guthrie’s (R-KY) “BRETTPAC,” Rep. Carolyn Maloney’s (D-NY) “Carolyn PAC,” former Rep. Mary Bono Mack’s (R-CA) “Mary PAC,” former Rep. Vicky Hartzler’s (R-MO) “VICKY PAC,” and former House candidate Guy Ciarrocchi’ “Coach Guy’s Leadership PAC.”

MTG, of course, already has a leadership PAC, and it’s unclear what her plans are for it. That committee is called “Save America Stop Socialism PAC”—or, “SASS.”

Emily’s Lost. This week, primary voters in California’s 47th district handed a loss to dual efforts from two deep-pocketed outside groups—the pro-Israel American Israel Public Affairs Committee (AIPAC), and EMILY’s List. Both groups threw big bucks behind Democratic contender Joanna Weiss, in her effort to topple Democratic opponent David Min and advance to the general election and claim the seat vacated by outgoing Rep. Katie Porter (D-CA).

In all, AIPAC’s super PAC threw a stunning $4.6 million into attack ads against Min. The EMILY’s List super PAC also poured cash into attacks on Min, a move which, considering Min’s record, raised eyebrows.

But FEC filings show that AIPAC has funded EMILY’s List directly. This August, an AIPAC super PAC transferred $200,000 to an EMILY’s List super PAC—the first-ever financial transaction between those groups. One week later, the EMILY’s List group, called “Women Vote,” put nearly $250,000 into a TV ad buy targeting Rhode Island’s Democratic Lt. Gov. Sabina Matos, who was running in a crowded field for Rhode Island’s special congressional election, with the Democratic frontrunner boasting close ties to AIPAC.

Both candidates ultimately lost. However, that AIPAC-connected Dem, Aaron Regunberg, had reportedly “worked hard to keep AIPAC funding out of the race.” It may have found its way in, anyway.

Back into your shell. This week, a federal judge in the U.S. District Court for the Northern District of Alabama scrapped an anti-money laundering statute as unconstitutional.

The law, a bipartisan effort called the “Corporate Transparency Act,” was passed in 2021 and took effect at the start of this year. The bill was designed to curtail money laundering by requiring limited liability companies (LLCs) to disclose their true beneficiary owners to the Treasury Department.

The CTA did this by creating a repository of those beneficial owners—most specifically targeting private and small-scale entities—and implemented new reporting policies already in place in European governments. It affected more than 32 million small businesses in the United States, the Wall Street Journal reported, and was considered an important new tool for financial law enforcement—particularly when it came to putting a cork in Russian laundering efforts after the invasion of Ukraine.

But this week, Judge Liles C. Burke sided with the National Small Business Association, which had sued the Treasury Department over enforcing the Act. The NSBA had argued that law encroached on privacy and due process rights enshrined in the constitution. Judge Burke—a Trump appointee—agreed, putting the CTA’s future in doubt.

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Trump’s political and personal worlds are so closely intertwined that distinctions between the two are almost meaningless. But the man behind a new upstart super PAC supporting Trump’s candidacy, Sergio Gor, has somehow managed to find a way to cross even those tightly knit wires, sowing confusion—at a critical time—among Trump megadonors, strategists, and the Mar-a-Lago patio set. In doing so, sources told me and Reese Gorman, he’s gone from being known as the “Mayor of Mar-a-Lago” to “the Patio Panhandler.” Check out all the blessed infighting here.

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