Monday, April 2nd, 2018
The email came from Larry Pratt, the longtime CEO of a far-right gun group, to Dick Uihlein, a Wisconsin conservative who, with his wife, is the biggest political donor in the current election cycle.
“Would like to do an independent expenditure for Stockman,” Pratt wrote on Jan. 22, 2014, according to a summary of evidence federal prosecutors collected against indicted former U.S. Rep. Steve Stockman, a Texas Republican who represented a Houston-area district from 2012 to 2014. Federal rules allow outside backers to spend unlimited amounts of money on candidates by making “independent expenditures” as long as they aren’t coordinated with the candidate. Prosecutors say that Stockman broke the law when he “jointly supervised” the mailer with an aide who ran a nonprofit; that’s one of 24 counts he was indicted on in March 2017.
Pratt emailed or texted Uihlein at least three more times in the next few weeks before Uihlein wrote a $450,000 check dated Feb. 18, 2014, evidence shows. Prosecutors collected this evidence for Stockman’s trial, which began March 19 and is expected to wrap up around the end of this week.
Uihlein is the CEO of the billion dollar packing and shipping company ULine, which his family owns. He and his wife gave more than $23 million to federal candidates in the 2016 election; in the 2018 election they've already given nearly $20 million, according to the Center for Responsive Politics. He also supports churches, conservative policy shops and other causes through his family foundation.
That generosity included a 2013 donation from the Ed Uihlein Family Foundation of $350,000 to a Stockman-controlled nonprofit intended to fund what the former congressman and his aides called the “Congressional Freedom Foundation,” according to Stockman’s indictment. An 18-page document they wrote describes “launching a three-pronged strategy to promote the ideas of liberty” by funding “Freedom House,” “The Congressional Freedom Caucus” and the “Congressional Freedom Foundation Field Training Program.” Federal investigators who followed the money allege Stockman “did not use any significant portion of the funds for that purpose.”
The Uihleins are big supporters of President Trump; they gave Trump’s super PACs at least $2 million in 2016, and another $500,000 to his inauguration. They’ve also given incoming National Security Adviser John Bolton’s super PAC nearly a million dollars. Dick Uihlein was one of about a dozen Trump supporters who huddled with the president the day that fired FBI director James Comey testified before the Senate.
Larry Barry, ULine’s director of legal affairs, did not respond to questions about Uihlein or his relationships with Pratt or Stockman.
Stockman is on trial in Houston for what prosecutors say is a massive fraud. He’s accused of ripping off two donors, one of them Uihlein, by selling them on grandiose schemes that supported a conservative agenda that never panned out.
Instead, prosecutors allege, Stockman laundered the money through nonprofits controlled by his associates to cover personal expenses and his own cash-strapped political campaigns, breaking campaign finance laws in the process.
Stockman says he’s not guilty.
Uihlein testified at the start of Stockman’s trial that he did not know the funding would be used for Stockman's personal or campaign costs and that he would not have given the money for that purpose, according to the Houston Chronicle.
Stockman was elected to to his second term in the House in 2012 (he also served a single term from 1994 to 1996). But in December 2013, with congressional investigators probing his office, Stockman set his eyes on the Senate. His bid was a long shot against Texas GOP Sen. John Cornyn, then the second ranking Republican. Though the National Rifle Association endorsed Cornyn and gave him an A+ rating, Stockman challenged the incumbent on gun issues, declaring in a Jan. 15, 2014, Washington Times report that the race was “all about gun rights.”
Stockman once raised money by selling bumper stickers that said: “If babies had guns they wouldn’t be aborted.” He took extreme positions consistent with Pratt’s group, the Gun Owners of America. He threatened to impeach then-President Barack Obama for issuing a series of executive orders to federal agencies to better implement background checks after the massacre at Sandy Hook Elementary School in December 2012. He later introduced a bill to allow guns on school property.
In December 2013, Pratt called Stockman a “hard-charger” on guns, and explained the decision to back Stockman to the Dallas Morning News by saying: “Cornyn is generally there, but we find sometimes we have to push him. Our feeling is, in Texas, we shouldn’t have to push anyone.”
Little known in the mainstream, Gun Owners of America regularly steers to the right of the NRA. GOA opposed a ban on bump stocks — the modification Las Vegas shooter Stephen Paddock made to make his gun fire more quickly, killing 58 people. The NRA said bump stocks “should be subject to additional regulations.” GOA’s response to the Parkland school shooting included a call for Florida to make guns easier to carry.
GOA refused to answer questions about the case against Stockman.
Pratt’s group reported spending more than $32 million lobbying Congress since 1999, though the reports aren’t audited. It also claims to have 1.5 million “members and activists,” but the vast majority of them aren’t paying the $20 annual membership fee. In 2016, membership dues amounted to just $140,810, less than 7 percent of the group’s total revenue. The rest of its money came mostly from from anonymous contributions.
Pratt was a controversial figure long before helping to found GOA. He resigned his position as co-chair of Pat Buchanan’s presidential campaign in 1996 after he appeared with white supremacists and militia groups at numerous events. In the 1980s, he launched an anti-immigrant group called English First. After the Sandy Hook shootings, he told an interviewer that supporters of gun control measures “have the blood of little children on their hands” because teachers did not have guns.
Stockman’s relationship with GOA went far beyond an endorsement.
When he took office in 2013, Stockman hired GOA lobbyist John Velleco as a top aide. House spending reports list Velleco as an “administrative assistant” in Stockman’s office, but his 2013 salary of $105,541.70 was more than any other Stockman employee that year. A staffer told congressional investigators that Velleco “is responsible for payroll, the budget, and finance issues… [Velleco] does a lot of the duties of the chief of staff.”
Kirk L. Clinkenbeard, Stockman's chief of staff, told the Office of Congressional Ethics that his responsibilities included "managing a portfolio of legislative issues" and that Velleco was responsible for personnel issues such as hiring and firing. He said managing the office was "a team effort."
Velleco is listed as operations manager on GOA’s website, and his bio says he’s worked for the gun group since 1993; it makes no mention of the 16 months he worked for Stockman. Velleco’s last day in Stockman’s office was April 6, 2014, about a month after Stockman lost the primary to Cornyn, and a week before a Stockman lawyer wrote a defense against campaign finance irregularities that compared congressional investigators to the Kremlin.
In 2014, Rolling Stone wrote a lengthy profile of Pratt that quoted a Roll Call reporter as saying that Pratt was "almost a shadow Congressman. … He was always around, essentially running then-Rep. Steve Stockman's office.”
Evidence from Stockman’s trial shows Pratt was nudging Uihlein, the mega-donor, to support Stockman before he took office in 2013. “At the urging of Larry Pratt, … Uihlein had donated $5,000 to help pay for a group of home-schooled children to be in Washington for Stockman’s swearing in ceremony,” according to a March 22, 2018, Houston Chronicle story.
It’s unclear whether Uihlein knew how close Pratt was to Stockman’s office. But if he did, Pratt’s Jan. 31, 2014, email might have given him pause.
“Dodd did something that was very ill considered,” Pratt wrote Uihlein about Stockman staffer Tom Dodd, according to a summary of evidence released by prosecutors. Pratt was in a position to know. Pratt’s longtime lobbyist, Velleco, was Dodd’s direct supervisor. Dodd had known Stockman since at least 2005, when they worked together at the Leadership Institute, a group that trains conservative activists, leaders and students. He’d also traveled to South Sudan with Stockman. Another staffer told congressional investigators that Stockman and Dodd were “almost like father and son.” (Stockman doesn’t have children.)
It’s unclear what Pratt meant by “ill considered,” but Dodd pleaded guilty last March to a campaign finance violation, the discovery of which led to the unmasking of Stockman’s alleged schemes. In October 2013, the Sunlight Foundation, a nonpartisan group that seeks transparency in government, reported that two identical $7,500 campaign contributions had come from the parents of two staffers, Dodd and Jason Posey, although Dodd’s mother said she hadn’t given the money. After a series of amended filings, Stockman’s office came up with a story that involved both Dodd and Posey resigning to donate, then being rehired the following day.
“When investigators began asking questions about the suspicious donations, the false narrative quickly unraveled,” prosecutors wrote. The money hadn’t come from the staffers either, but from one of Stockmans’ nonprofits, prosecutors write in court documents.
The campaign finance issues were just the start of Stockman’s problems.
In late 2013, the Houston Chronicle reported that Stockman and Posey had been involved in questionable nonprofit real estate transactions, and that Stockman’s ethics filings didn’t explain his income, among other revelations.
Stockman’s behavior during the 2014 campaign season seemed even more bizarre. He missed 17 consecutive House votes in January 2014. The Washington Post wrote about it in a January 2014 story headlined, “The strange case of the missing (or not!) congressman.” Stockman’s aides later said that he’d been on an official trip to Israel, Russia and Egypt. Posey would buy a one way ticket to Egypt several months later, prosecutors allege.
Egypt, one of just two countries in the Middle East with an extradition treaty with the U.S., is not an obvious place to flee, but evidence presented at trial shows Stockman had contacts there. Prosecutors say Stockman pitched an Egyptian general, tied closely to the military dictatorship that now runs Egypt, on two $15 million plans related to a plant run by Cemex, a Mexican multinational with offices in Houston. Posey set up a bank account to do business as the “Egyptian American Friendship Society,” according to prosecution documents.
Posey opened a bank account under the society’s name before January 2014, according to prosecutors’ evidence. Even as Posey was working on plans for Egypt, Pratt, the gun lobbyist, was following up with Uihlein about the election mailer.
A week after Pratt told Uihlein about a Stockman aide’s “very ill considered” action, on Feb. 7 he texted to say: “Steve has a couple of heavy hitters ready to go.” Prosecutors have yet to explain what he meant by this, but on Feb. 18, 2014, Uihlein wrote a $450,571.65 check to cover the postage for mailing a fake newspaper attacking Cornyn’s stances on guns, Obamacare and other issues.
Evidence released to date doesn’t explain why Uihlein would give money to Stockman in what appeared to be a hopeless race against the much-better funded Cornyn, then Senate minority whip. Representatives for Pratt and Uihlein refused to answer questions about it.
What was in it for Uihlein? He’s a donor in the Koch mold, taking the long view of conservative politics by funding not just candidates but think tanks and causes such as the XIV Foundation, a now-defunct anti-affirmative action group. A recent Politico profile of Uihlein quotes an unnamed operative as saying: “He’s not measuring himself by wins and losses — he’s measuring himself by moving the debate.”
Uihlein testified this month that he found Stockman trustworthy, and that his father had liked him during his earlier term in Congress.
Last week, Assistant U.S. Attorney Melissa Annis said by email that Pratt was “likely” to testify the same day that GOA board chair Tim Macy testified, and that his emails to Uihlein would be discussed in court later. But he didn’t show that day. The prosecution’s case is expected to end as early as today.
Pratt could speak to the evidence that’s been made public so far. It’s unclear how much interest prosecutors would have in probing Pratt any further in front of a Texas jury whose members’ feelings about guns are unknown.
But the prosecution’s case is that Stockman’s campaign eventually ripped off Uihlein.
The fake newspaper mailing was stopped halfway through, and Stockman and Posey told the direct-mail executive to send the refund of nearly $215,000 back to the nonprofit that was running the purportedly “independent” expenditure
Using some of the $214,718.51 left, longtime aide Posey bought a one-way ticket to Egypt, “narrowly dodging an FBI interview,” according to prosecution documents. As a member of Congress, Stockman wanted to prevent the U.S. from regulating cryptocurrencies. As a member of an alleged conspiracy, prosecutors say he supported Posey by sending bitcoins overseas.
Top: 2014 file photo of Rep. Steve Stockman during a news conference by Tom Williams/CQ Roll Call
Jacob Fenton may be reached at email@example.com.