Government & Politics

Supporters of indicted Gov. Greitens create legal defense fund

Five things to know about the Greitens scandal

A St. Louis grand jury on Feb. 22 indicted Missouri Gov. Eric Greitens on a felony charge of invasion of privacy.
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A St. Louis grand jury on Feb. 22 indicted Missouri Gov. Eric Greitens on a felony charge of invasion of privacy.

Supporters of Gov. Eric Greitens have filed paperwork with the Internal Revenue Service to establish a nonprofit to raise and spend money to cover legal expenses.

ERG Defense Fund was created on Friday, a little more than a week after the Republican governor was indicted on a felony charge of invasion of privacy stemming from a 2015 extramarital affair.

The governor's full name is Eric Robert Greitens.

The nonprofit’s president is listed as Sean Droke, who previously served on Greitens’ campaign leadership team and the executive committee for Greitens’ inauguration.

Asked by The Star if ERG Defense Fund was set up for the governor, Droke said, “I believe so.” When pressed he said he could not say for certain “at this time.”

He then told a reporter that he was not in his office and hung up.

It’s unclear whether the fund would cover legal expenses for Greitens’ staff. The Star reported last week that members of the governor’s office have been subpoenaed and are being represented by the law firm of Missouri GOP Chairman Todd Graves.

Neither Greitens’ legal defense team nor Graves responded to a request for comment.

ERG Defense Fund appears to have been created as a “527” organization.

According to the Center for Responsive Politics, the term "527" applies to political organizations as identified in their tax filings with the Internal Revenue Service. The number refers to the section of the tax code that governs such entities. These groups are typically parties, candidates, committees or associations organized for the purpose of influencing an issue, policy, appointment or election.

Such organizations can raise unlimited funds from individuals, corporations or labor unions, but they must register with the IRS and disclose their contributions and expenditures.

"This legal defense fund will allow the governor to raise unlimited funds from his wealthy supporters to cover his legal fees," said Brendan Fischer from the Campaign Legal Center. "As a 527, this entity will have to disclose its donors to the IRS. The most obvious and recent example of a politician setting up a legal defense fund is President Trump's Patriot Legal Defense Fund LLC, which was also set up as a 527."

This isn’t the first nonprofit created to benefit the governor. But previous entities were created at the state level and are not required to disclose their donors.

A Committee for a New Missouri Inc. was created in late 2016 to raise money for Greitens’ inauguration. Hiding how much individuals and corporations donated to bankroll inaugural festivities was a break from tradition in Missouri.

A New Missouri Inc. was founded in early 2017 by the governor’s political team. Its mission is to advocate for the governor’s agenda. But its activities have set off a firestorm of controversy, with even some of Greitens’ fellow Republicans publicly condemning his reliance on so-called dark money.

Three men, including Droke, are listed as directors of ERG Defense Fund.

The first is Ron Weiser, chairman of the Michigan GOP and former finance chairman for the Republican National Committee. He donated $50,000 to Greitens' 2016 campaign, and his company chipped in $348,000.

The second is Shane Mayes, CEO of Onshore Outsourcing. Mayes allowed Greitens to use a private jet last month to travel the state when the governor was hopscotching Missouri to tout his tax cut proposal.

The new fund's treasurer is Tom Reedy, a Webster Grove businessman who appears to have been appointed by Greitens to serve as a member on the 21st circuit judicial commission.

The governor was indicted last month by a St. Louis grand jury on felony charges stemming from a 2015 affair and allegations that Greitens took a partially nude photograph of the woman and threatened to release it if she ever spoke about the affair in public.

Greitens has admitted the affair but denied he blackmailed the woman.

The grand jury investigation is ongoing, and appears to have broadened to include activities by Greitens' campaign.

St. Louis Circuit Attorney Kim Gardner's office announced Monday that it hired a former FBI agent, Anthony Box, to serve as its new chief investigator.

Gardner began searching for a chief investigator prior to her decision to investigate Greitens, but she confirmed in a phone call that Box would work on the Greitens case among other duties.

Box, who served with the FBI from 1996 to 2005, has background in investigating white collar crime and cyber crime.

Greitens is also fighting a lawsuit brought by two St. Louis attorneys arguing that the governor’s office has conspired to violate the state’s open records law by using an app that deletes text messages after they’ve been read.

The same law firm defending the governor in the criminal investigation is representing the governor’s office in the open records lawsuit.

And the Missouri House will formally begin its investigation of the governor Tuesday night. A bipartisan committee will hold a public hearing, the first step towards possible impeachment.

Lawmakers have stressed that the committee's work will be to investigate the underlying facts of the indictment and the circumstances surrounding it.

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