POLITICO Playbook: George Santos has $199 problems

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With help from Eli Okun and Garrett Ross

DRIVING THE DAY

On Tuesday, KEVIN McCARTHY officially booted Reps. ADAM SCHIFF and ERIC SWALWELL from the House Intelligence Committee. In a letter that was short on details about the two California Democrats’ sins, the new House speaker referred to “integrity,” “honesty” and “credibility” as driving his decision.

In a joint statement, Schiff, Swalwell and Rep. ILHAN OMAR (D-Minn.) — whom McCarthy is threatening to remove from the House Foreign Affairs Committee — said McCarthy “struck a corrupt bargain in his desperate, and nearly failed, attempt to win the Speakership, a bargain that required political vengeance against the three of us.”

It is no surprise that reporters immediately asked McCarthy how his expulsion of the two Democrats for alleged dishonesty squares with his hands-off approach to another well-known congressman: Rep. GEORGE SANTOS (R-N.Y.), who has lied about … well, pretty much everything … and was recently given assignments on two House committees.

McCarthy for the first time laid down some specific criteria for what it would take to move against the Long Island fabulist, telling reporters that if the Ethics Committee found that Santos broke the law, “then we will remove him.” C-SPAN video

Given the latest Santos news, it looks like the committee could be busy with referrals …

CENTS AND SENSIBILITY — Our colleague Jessica Piper reports this morning on some rather unusual disbursements included in Santos’ campaign finance reports:

“Santos’ congressional campaign reported dozens of transactions just cents below the threshold that would have triggered a requirement to preserve spending records — an unusual spending pattern that is now part of broader complaints about alleged financial improprieties.

“Santos, who admitted in December that he faked parts of his biography, already faces a complaint filed with the Federal Election Commission alleging his campaign repeatedly reported suspicious expenses. Those included eight charges of exactly $199.99 at an Italian restaurant in Queens and another $199.99 charge at a Miami-area hotel where rooms do not usually go for less than $600 per night. The specific amount matters because campaigns are required by law to keep receipts or invoices for expenses greater than $200.

“Campaigns rack up millions of dollars in expenses and thousands of line items per campaign, but it is rare for them to notch even one $199 expense, according to a POLITICO review of campaign finance records. FEC data shows more than 90 percent of House and Senate campaign committees around the country did not report a single transaction valued between $199 and $199.99 during the 2022 election cycle.

“Santos reported 40 of them. In fact, his campaign accounted for roughly half of all expenses by all campaigns that cost exactly $199.99 — a statistical improbability.

“The rarity of campaign expenses falling so close to the legal limit for retaining receipts has raised concerns that the Santos campaign’s disbursements were ‘deliberately falsified,’ a complaint from the Campaign Legal Center alleges. Major questions about Santos’ campaign financing remain unanswered, including the source of $700,000 that the New York congressman ostensibly loaned to his campaign despite questions about his personal finances.”

Which brings us to …

SAY IT TO ME SANTOS — So what about that $700,000? Yesterday, Santos’ campaign made some unusual amendments to its FEC filings, first reported by The Daily Beast.

In 2021, Santos reported that he loaned his campaign $80,000. Last year, he reported two more loans, one for $500,000, and one for $125,000. In all three cases he said the money came from his own personal funds. Needless to say, the provenance of that money has been a source of intrigue.

Santos, who is also under scrutiny for his sworn personal financial disclosures, has claimed he legitimately earned his fortune through his work connecting wealthy clients with various financial opportunities. But he’s dodged on the details: “I’ll tell you where it didn’t come from,” he said on the War Room podcast this month. “It didn’t come from China, Ukraine, or Burisma.”

Yesterday, Santos clouded the issue further. The changes to the FEC filings recharacterize the $500,000 and $125,000 loans to indicate that the money did not come from personal funds. The change has baffled campaign finance experts.

From the NYT: “BRETT G. KAPPEL, a leading elections lawyer who advises both Democrats and Republicans on campaign finance issues, said that it would be a ‘very big deal’ if Mr. Santos was admitting he did not personally finance the campaign loan.

“‘If the candidate’s personal wealth wasn’t the source of the loan, then what was?’ he asked. ‘The only other permissible source would be a bank, and they would require collateral for a loan of this size. If a bank wasn’t the source of the funds, then the only alternatives are illegal sources.’”

Good Wednesday morning. Thanks for reading Playbook. Drop us a line with your theories about Santos’ finances: Rachael Bade, Eugene Daniels, Ryan Lizza.

PHOTO OF THE DAY

PLAYBOOK READS

ALL POLITICS

LET IT GO — “Frozen: Trump’s primary challengers balk at jumping into the unknown,” by David Siders and Zach Montellaro: “Those preparing to challenge Donald Trump in the GOP’s presidential primary are taking their time, privately discussing the prospect of waiting until spring or summer to get in, according to three Republican strategists familiar with different candidates’ deliberations. Part of it is strategic: an effort to make someone else an early Trump foil. Part of it is fear: wariness around their own ability to raise money to sustain a drawn-out campaign.”

— Who we could see soon: “Former Trump UN ambassador Nikki Haley gears up for likely 2024 run for president,” by CNBC’s Brian Schwartz and Kevin Breuninger

THE RNC RACE — “Why the Senate GOP’s McDaniel for RNC caucus is surprisingly small,” by Burgess Everett: “With the GOP facing an identity crisis after Donald Trump left the White House, the RNC chair is poised to play a pivotal role in the party’s navigation of an open presidential primary next year. And senior Senate Republicans aren’t exactly clamoring for two more years of McDaniel.”

— What else to watch in Dana Point: “RNC to consider resolution condemning Kanye West, Fuentes and antisemitism writ large,” by Natalie Allison

DEMS’ TECH TROUBLES — “Inside The Slow Implosion Of The Democratic Party’s Vaunted Campaign Tech Firm,” by The Intercept’s Akela Lacy: Recent layoff announcements at NGP VAN and EveryAction have stoked fears among some Democrats that their private owner “would try to maximize revenue by cutting costs, firing people, and effectively hollowing out the acquired companies with potentially drastic implications for the Democratic Party and liberal organizations.”

ON WISCONSIN — “2023’s Biggest, Most Unusual Race Centers on Abortion and Democracy,” by NYT’s Reid J. Epstein: “The April race, for a seat on the state’s evenly divided Supreme Court, will determine the fate of abortion rights, gerrymandered legislative maps and the governor’s appointment powers — and perhaps even the state’s 2024 presidential election if the outcome is again contested.”

THE WHITE HOUSE

NEC WATCH — Biden is getting closer to naming a replacement for National Economic Council chair BRIAN DEESE, “and Federal Reserve Vice Chair LAEL BRAINARD has emerged as a top contender, according to three people familiar with the deliberations,” WaPo’s Tyler Pager, Jeff Stein and Rachel Siegel report. Also in the mix: WALLY ADEYEMO, GENE SPERLING, SYLVIA MATHEWS BURWELL, BHARAT RAMAMURTI and GINA RAIMONDO.

DOCU-DRAMA — “Biden’s Handling of Secret Documents Complicates the Case Against Trump,” by NYT’s Peter Baker: “The cases are markedly different in their particulars, as has been noted repeatedly. … But they are similar enough that as a practical matter Democrats can no longer use the issue against Mr. Trump politically, and investigators may have a harder time prosecuting him criminally.”

— “Classified records pose conundrum stretching back to Carter,” by AP’s Zeke Miller, Farnoush Amiri, Colleen Long and Jill Colvin: “It turns out former officials from all levels of government discover they are in possession of classified material and turn them over to the authorities at least several times a year, according to a person familiar with the matter who spoke on the condition of anonymity due to the sensitive nature of classified documents.”

VEEP FILES — “Harris to travel to California after 3 mass shootings,” by Kelly Garrity

CONGRESS

THE DEBT CEILING DILEMMA — Biden has said he plans to meet with McCarthy to address the debt ceiling debate, though exactly when that meeting might happen is unclear. But first on the agenda was a display of Democratic unity at the White House on Tuesday, as Biden invited top Dem congressional leaders for a discussion about the party’s priorities ahead of the bruising fight ahead. “Democrats are saying that we can come together in a moderate way. [Republicans] are extremists,” Senate Majority Leader CHUCK SCHUMER told reporters after the meeting. “That’s the contrast: Unity versus chaos.” More from Myah Ward

McCARTHY’S VICTORY LAP — McCarthy has invited donors and supporters to a three-day “majority celebration,” our colleague Alex Isenstadt reports. The event kicks off tonight with a dinner at the Conrad Hotel. Thursday and Friday will feature, among other things, a breakfast reception with House GOP freshmen, a “political and policy update luncheon” and a dinner at the Library of Congress.

DEMS ON DEFENSE — “Dems mobilize to defend Omar in face of GOP defections,” by Nicholas Wu and Sarah Ferris: “Democratic leaders are working to have no defections on the vote to remove Omar from the Foreign Affairs Committee when it comes up for a full House vote as soon as next week. And even Democrats who have vocally taken issue with her stance on Israel are now urging colleagues on both sides of the aisle to allow her to remain on the panel.”

MORE COMMITTEE DECISIONS — “McCarthy names GOP members to run sweeping investigative panel,” by Jordain Carney: “Speaker Kevin McCarthy has named a mixed bag of members to Republicans’ sprawling investigative panel, including conservative hardliners, leadership allies and Rep. JIM JORDAN — who represents a combination of both — to lead it.”

— “McCarthy taps GOP members to investigate Covid policies,” by Jordain Carney: “House Republicans have tapped the members who will lead an investigation into how the government handled the coronavirus pandemic, including conservative firebrand Rep. MARJORIE TAYLOR GREENE.” Chairing will be Rep. BRAD WENSTRUP (R-Ohio), a medical doctor.

— Newly elected Sen. ERIC SCHMITT is angling for a highly coveted slot on the Senate Judiciary Committee, Marianne LeVine and Burgess Everett report. But he’d need a waiver since fellow Missouri Republican JOSH HAWLEY is on the panel. And neither Sens. THOM TILLIS (R-N.C.) and MARSHA BLACKBURN (R-Tenn.) are keen on giving up their seats to accommodate him.

JUST POSTED — “Possible retirements before 2024 have Senate Democrats on edge,” by WaPo’s Liz Goodwin

TRUMP CARDS

THE GEORGIA INVESTIGATION — “‘Decisions are imminent’: Georgia prosecutor nears charging decisions in Trump probe,” by Kyle Cheney

TO THE RESCUE — “Trump tries to intervene as Navarro faces trial for defying Jan. 6 committee,” by Kyle Cheney: “A lawyer for Trump issued a letter this week endorsing the decision by former White House adviser PETER NAVARRO to blow off a subpoena from the Jan. 6 select committee by making blanket claims of executive privilege.” Read the letter

WORTH A THOUSAND WORDS — “Joey Merlino: Donald Trump didn’t know who I was when we posed for a photo at his golf club,” by the Philly Inquirer’s Chris Brennan

POLICY CORNER

HEADS UP — “Biden’s human rights pick withdraws,” by Nahal Toosi: “The loss of SARAH MARGON, whose nomination to serve as assistant secretary of State for democracy, human rights and labor was announced in April 2021, could damage an administration push to prioritize human rights in its foreign policy. It also highlights the partisan logjams in the Senate confirmation process, where actions by a single senator have left some foreign policy and national security positions empty for years.”

THE ECONOMY

LANDING LOOKING SOFTER — “Inflation surprise: Wage gains eclipse price spikes,” by Victoria Guida: “Americans’ average income has beaten inflation for the past six months, driven by the plummeting cost of gas, along with drops in furniture, cars and other goods.” The trend is good news for Biden as he gears up for re-election, but the Fed’s vow to continue raising interest rates could reverse worker gains.

BEYOND THE BELTWAY

GUNS IN AMERICA — “Dozens of Major Shootings Sweep the U.S. in January,” by WSJ’s Alyssa Lukpat and Jon Kamp: “The Gun Violence Archive, which has a broader definition of mass shootings that includes any incident in which four or more people, not including the shooter, are wounded or killed, has recorded 39 such incidents this year. That is the highest tally at this point in a year since at least 2014.”

The latest in California: “Newsom renews call for federal action on gun safety after 2 mass shootings in California,” by Lara Korte in Sacramento, Calif. … “Half Moon Bay suspect lived at mushroom farm where shootings occurred,” L.A. Times … “After California massacres, Asian Americans shoulder the grief,” WaPo … “Uvalde families press urgency after California shootings,” by AP’s Acacia Coronado in Austin, Texas

ABORTION FALLOUT — “States look to California’s blueprint for a post-Roe world,” by Alice Miranda Ollstein in Santa Barbara, Calif.

IMMIGRATION FILES — “Florida joins 19 states to challenge Biden’s new immigration program,” by Gary Fineout in Tallahassee, Fla.

MEDIAWATCH

GOTTA KEEP ’EM SEPARATED — “Rupert Murdoch abandons plan to recombine Fox and News Corp,” by CNN’s Oliver Darcy: “RUPERT MURDOCH has abandoned plans to combine Fox Corporation and News Corporation, a move that would have reunited his broadcasting and print publishing companies under one roof.” Murdoch said in a letter to the companies “that both he, and his son LACHLAN, determined a combination of the two companies was not ‘optimal’ for shareholders at this time.”

VALLEY TALK

GOOGLE IT — “DOJ files second antitrust suit against Google, seeks to break up its ad business,” by CNBC’s Lauren Feiner: “This lawsuit, which is focused on Google’s

online advertising business and seeks to make Google divest parts of the business, is the first against the company filed under the Biden administration. … Google’s advertising business has drawn critics because the platform operates on multiple sides of the market — buying, selling and an ad exchange — giving it unique insight into the process and potential leverage.”

The stepbacks: “DOJ’s Google Case Adds to the Mounting Scrutiny of Big Tech,” by Bloomberg’s Leah Nylen and Brody Ford … “Congress on the Sidelines as U.S. Takes on Google,” by WSJ’s Ryan Tracy

INBOX ZERO — “Google to stop exempting campaign email from automated spam detection,” by WaPo’s Isaac Stanley-Becker: “Google plans to discontinue a pilot program that allows political campaigns to evade its email spam filters, the latest round in the technology giant’s tussle with the GOP over online fundraising.” The company disclosed its plans in a court filing made in a case filed by the RNC, which sued Google over its email filtering practices but did not participate in the pilot program.

MUSK READ — “Elon Musk defiantly defends himself in Tesla tweet trial,” by AP’s Michael Liedtke in San Francisco

PLAYBOOKERS

Taylor Swift lyrics littered the Senate Judiciary Committee’s hearing on Live Nation yesterday.

George Santos got the Robin Givhan treatment.

Ivanka Trump and Jared Kushner’s Miami apartment building is looking for a new landlord.

Josh Kushner is now worth more than Donald Trump

REMEMBERING BLAKE HOUNSHELL — Yesterday, The New York Times and POLITICO, the organizers of a GoFundMe to support the family of Blake Hounshell, announced the details of a memorial service for Blake:

“Friends, family and colleagues of Blake Hounshell will celebrate his life on Thursday, Jan. 26 at 11 a.m. at the 6th & I Synagogue in Washington, D.C. Blake made a tremendous impact on so many people in his personal and professional lives and this ceremony will feature several speakers who will share their experiences with him. We invite you to join us as we commemorate his legacy on Thursday.”

The speakers will include Sen. Ben Ray Luján (D-N.M.); Joseph Kahn, executive editor of The New York Times; Adam Pollock, attorney and Blake’s childhood friend; Susan Glasser, former editor in chief at Foreign Policy and editor at POLITICO; Lina Sergie Attar, CEO of the Karam Foundation and Foreign Policy contributor; John Harris, co-founder of POLITICO; Elizabeth Ralph, editor for POLITICO Magazine; Tim Alberta, staff writer at The Atlantic; and Sandy Choi, Blake’s wife. There will be a livestream of the event here

IN MEMORIAM — “Victor S. Navasky, a Leading Liberal Voice in Journalism, Dies at 90,” by NYT’s Joseph Berger: “Victor S. Navasky, a witty and contrarian journalist who for 27 years as either editor or publisher commanded the long-running left-leaning magazine The Nation, and who also wrote the book ‘Naming Names,’ a breakthrough chronicle of the Hollywood blacklisting era, died on Monday in Manhattan.”

OUT AND ABOUT — Chef Nicholas Stefanelli, Vicki and Michael Herson, Jenny and David Drucker, Erica Striebel, Doug Heye, John Scofield, and Lindsey and Todd Schulte hosted a welcome event for the 118th Congress last night celebrating the opening of Stefanelli’s new restaurant, Le Clou, at the Morrow Hotel in NoMa. Guests previewed the hotel’s penthouse bar and club, and enjoyed signature cocktails, porcini mushroom bites, foie gras cones, charcuterie boards and more. SPOTTED: Reps. Marc Veasey (D-Texas), Claudia Tenney (R-N.Y.), Betty McCollum (D-Minn.), Mark Alford (R-Mo.), Pat Fallon (R-Texas), Nick LaLota (R-N.Y.), Marc Molinaro (R-N.Y.) and Don Norcross (D-N.J.), Kellyanne Conaway, former Reps. Bill Shuster (R-Pa.) and Ileana Ros-Lehtinen (R-Fla.), Christina Sevilla, Steve Rochlin, Luke Dube, Tori Barnes, Tom Williams, Connor O’Brien, Lee Hudson and Armando Avila.

— SPOTTED at a welcome reception for the new Congress hosted by the Georgia State Society at Southern Company yesterday: Reps. Austin Scott (R-Ga.), Lucy McBath (D-Ga.), Barry Loudermilk (R-Ga.), Mike Collins (R-Ga.), Buddy Carter (R-Ga.) and Drew Ferguson (R-Ga.), Bryan Anderson, Wells Ellenberg, Maggie Newton, Joby Young, Josh Delaney, Alice Johnson, Chris Crawford, Lauren Hodge, Heath Wheat, Tyler Stephens, Amanda Maddox, Caren Street, Gina Rigby, Christopher Wenk, Tom Tilton, Ryan Diffley, Randy Nuckolls, Rob Underwood and Mary Dee Beal.

— SPOTTED at the portrait unveiling of former DHS Secretary Jeh Johnson yesterday, which also featured remarks by current DHS Secretary Alejandro Mayorkas: Michael Chertoff, John Kelly, Reps. Steny Hoyer (D-Md.), Henry Cuellar (D-Texas) and John Carter (R-Texas), VA Secretary Denis McDonough, Jane Harman, Chuck Todd, Yamiche Alcindor, Jonathan Capehart, Paul Rosen, Christian Marrone, Jeremy Bash, Susanna Quinn, Josh Rothstein, Marsha Espinosa, Virginia Boney, Erin McPike and Sarah Istel. Pics

FIRST IN PLAYBOOK — National Public Affairs, a Republican political consulting firm founded by a group of Trump campaign veterans, is expanding its operations. The firm has hired Tom Dickens as VP of creative production, Mike Hahn as VP of digital strategy, Tim Murtaugh as VP of comms and is promoting Nick Trainer to VP of political strategy. The firm was founded by former Trump advisers Bill Stepien, Justin Clark and Sean Dollman.

MEDIA MOVE — Saeed Ahmed is now VP of news for digital platforms for the AP. He previously was head of digital journalism for the BBC.

TRANSITIONS — Jason Crawford is returning to Crowell & Moring as a partner. He previously was a trial attorney at DOJ’s Civil Division, Fraud Section. … Amaia Stecker is now senior director of development at Millennial Action Project. She was most recently a senior director of the Walk to End Alzheimer’s campaign at the Alzheimer’s Association National Capital Area Chapter. …

… Sen. Ted Cruz (R- Texas) announced senior Republican Commerce Committee staff changes: Brad Grantz will be staff director, Dan Sullivan will be chief counsel and Melissa Braid will be comms director. Grantz was previously Republican staff director of the Senate Banking Committee, Sullivan was previously Republican chief counsel of the Senate Banking Committee and Braid most recently was the comms director for the House Freedom Caucus.

HAPPY BIRTHDAY: Reps. Bill Pascrell (D-N.J.), Andy Harris (R-Md.), Sheila Cherfilus-McCormick (D-Fla.) and Aaron Bean (R-Fla.) … White House’s Ashley Jones … FDA’s Angela Calman … NYT’s Jeremy Peters … WaPo’s Michael Scherer … Jim Axelrod … POLITICO’s Caroline Amenabar, Alessandro Sclapari, Kelsey Moore and Chris Parisi … Joe Conason of The National Memo … Navy Rear Adm. George Wikoff … Danielle Inman … David Woodruff of CN Railway … RNC’s Will Sexauer … Mallory Hunter … Luke Graeter of Rep. Brad Wenstrup’s (R-Ohio) office … Jason Jay Smart … Erin Heeter of Sen. Joe Manchin’s office (D-W.Va.) … Nancy Gibbs … Evan Lukaske of Sen. Kirsten Gillibrand’s (D-N.Y.) office … Connor Wolf … NAM’s Mark Isaacson ... Meaghan Lynch … Brunswick Group’s Kevin Helliker ... Joelle Terry ... Erika Reynoso of Amazon … Ed Payne … Tina Tchen … Lee Payne … former Iowa Gov. Chet Culver … former FEMA Deputy Administrator Dan Kaniewski … Adam Kovacevich of the Chamber of Progress … Adam Falkoff of CapitalKeys … Eleni Towns … Kate Conway … Zach Pleat … Josh Randle … Aidan McDonald of Sen. Alex Padilla’s (D-Calif.) office (25)

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