Steve Bannon, a former White House adviser and one of Washington’s most strident China hawks, pleaded not guilty on Thursday to charges that he and three others defrauded donors to an online fund meant to support the construction of a wall along the US border with Mexico.
Bannon, who has recently issued frequent calls for confrontation with China over the coronavirus pandemic, was arrested earlier in the day, after reportedly being whisked off the yacht of Chinese billionaire fugitive Guo Wengui. He appeared before a federal judge, while his alleged accomplices Brian Kolfage, a US Air Force veteran, and Andrew Badolato were also scheduled to appear before judges in Florida and another alleged associate, Timothy Shea, would be arraigned in Colorado.
President Donald Trump immediately distanced himself from Bannon and the funding drive, called We Build the Wall, by telling White House reporters that he had not “been dealing with him for a very long period of time” and that the project “was being done for showboating reasons”.
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“I think it’s a very sad thing for Mr. Bannon,” he said. “I think it’s surprising.”
The federal indictment accuses Bannon of taking more than US$1 million from We Build the Wall, which was launched by Kolfage as an online crowdfunding campaign in 2018 and later became a non-profit entity, through another non-profit organisation controlled by Bannon and using the funds to “secretly” pay Kolfage and cover his own personal expenses.
“The defendants defrauded hundreds of thousands of donors, capitalising on their interest in funding a border wall to raise millions of dollars, under the false pretence that all of that money would be spent on construction,” the US Justice Department said in an announcement.
“While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle,” it said.
The indictment, which was unsealed by the Justice Department’s Southern District of New York on Thursday, said We Build the Wall ultimately raised US$25 million.
A spokeswoman for Bannon did not immediately respond to a request for comment.
“President Trump has always felt the Wall must be a government project and that it is far too big and complex to be handled privately,” White House press secretary Kayleigh McEnany told White House reporters. “President Trump has not been involved with Steve Bannon since the campaign and the early part of the administration, and he does not know the people involved with this project.”
Yet despite leaving his administration role as White House chief strategist three years ago, Bannon has maintained close ties with members of Trump’s inner circle, including Peter Navarro, a fellow China hawk who serves as a trade advisor to the president.
As recently as late July, Navarro was a guest on Bannon’s War Room podcast, a conservative show in which speakers rail against perceived enemies including the Chinese government, the Democratic Party and the Black Lives Matter movement.
Introduced by Bannon as a “dear friend and close colleague”, Navarro appeared on a July 27 episode – broadcast from the Trump International Hotel in Washington – to accuse, without evidence, that the Chinese Communist Party intentionally “spawned” the coronavirus and “sent it around the world”.
Federal postal inspectors and special agents, working with the US Coast Guard, boarded Guo’s US$35 million vessel, which was in Long Island Sound, off the coast of Connecticut – to apprehend Bannon, The New York Times reported, citing prosecutors.
Within the inner circle of President Donald Trump, Bannon emerged as one of the most strident critics of China, regularly warning that Beijing’s increasing economic and geopolitical influence made confrontation with the US inevitable.
Speaking last year at a Washington event organised by the Committee on the Present Danger: China (CPDC) – which also featured Senator Ted Cruz and former speaker of the House Newt Gingrich – Bannon excoriated groups that have promoted business and cultural ties with China, including McKinsey & Company, Goldman Sachs and the Committee of 100, an advocacy group representing some of the most prominent Chinese Americans.
These ties, the former White House chief strategist said, have assisted efforts by the Communist Party of China to dismantle an international order of the “nation state on the shoulders of a free citizenry” forged centuries ago in the West.
Bannon has been a close associate of Guo – another prominent critic of the Chinese government who regularly levels accusations of corruption against Beijing officials – since his days in the White House. Guo fled to the US in 2014 and has faced numerous lawsuits initiated by creditors and others since then.
Guo and Bannon appeared together at an event in New York City in 2018, in which they suggested that the death a few months earlier of Wang Jian, the former chairman of Chinese conglomerate HNA Group, was not an accident.
Wang died during a trip to the village of Bonnieux in the Provence region of France. Law enforcement officials there concluded that he fell off a wall and have ruled out foul play.
Bannon said at the New York City event that he had joined forces with Guo to draw attention to the disappearance of high-profile investors in China as well as the country’s growing overseas investments. HNA was one of China’s largest global investors.
The Wall Street Journal reported on Wednesday that Bannon and Guo are under investigation by the Federal Bureau of Investigation and the Securities and Exchange Commission over a private offering worth more than US$300 million to fund a media company that both are associated with.
The investigators are looking for evidence that Guo violated securities laws through the private share placement, the Journal said.
Bannon is named as a GTV Media Group director, while Guo served as a public face for the offer, according to the report, which cited a fundraising document.
Additional reporting by Owen Churchill and Jacob Fromer
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