The Daily Beast
Kanye’s Campaign Store May Land Him in Deep Trouble With the Feds
REUTERSFormer Birthday Party presidential contender Kanye West has not yet terminated his campaign, but he has disabled donations and removed merch from his website after receiving a notice from the Federal Election Commission and numerous complaints about extended shipping delays from some of his zoomer donors hopeful that their federal contribution would return a black-market payday.The unusual violations in the West campaign’s FEC reports include multiple donations from minors, multiple possible contributions from foreign nationals and several fake names and addresses that trace to drop-shipping warehouses on both coasts. On top of that, experts say, West himself may face an investigation for unlawful fundraising practices that pulled in nearly $100,000 in small donations this year.“In five-plus years of doing this I’ve never come across something like this,” said Jordan Libowitz, communications director for government watchdog Citizens for Responsibility and Ethics in Washington, which has filed 14 federal lawsuits targeting illegal campaign finance activity since 2016.West, of course, never had a chance. He launched his campaign in late July, marking the occasion with a meandering speech in South Carolina in which said that “Harriet Tubman never actually freed the slaves,” cried, and posited that while abortion should be legal, “anyone who gives birth to a child be given $1 million.” The producer-cum-rapper-cum-serial entrepreneur was first hyped by Republicans hoping he would siphon young and minority voters from Democratic tickets, specifically by former President Trump’s top adviser and son-in-law, Jared Kushner, who in February confirmed reports that he had encouraged West to step into the ring during a “great discussion” at the rapper’s Wyoming ranch last summer.In January, West reportedly said that the quixotic effort “cost him his marriage” to reality TV megastar Kim Kardashian.West’s campaign was largely self-funded, through $12.4 million in loans. The self-identifying genius spent more than half of that — north of $7.86 million across 64 separate payments — just getting on the ballot. Half of his small-dollar fundraising, $1.3 million, went to legal fees, and he dropped nearly a million dollars on merch-related services. His campaign also paid $94,677 in August to a company that charters private jets, and currently has $1.1 million in the bank.The campaign has to date collected $2.2 million from small-dollar donors, nearly all of it in exchange for campaign swag, not out of support for a Yeezy administration. Some of it was snapped up by entrepreneurial zoomers intending to flip the limited-edition collectibles in online marketplaces, scoring a few thousand dollars in easy cash. Price points on the site ranged from a $40 hat to a $200 Kanye 2020 Vision hat/hoodie bundle, but they list higher than that today in online marketplaces.But some recent donors aren’t happy.“You know this was a scam, right?” Jennifer Bloom, mother of 16-year-old West donor Ian Bloom, said in a phone call. Her son, nursing strep throat, explained that he still hasn’t received the $3,280 worth of Kanye 2020 gear that he ordered from the campaign store in late January and planned to flip online.“I don’t know what’s happening there,” Ian Bloom said. “I ordered like 20 hoodies off his campaign website, along with a lot of other people that I know. They said it would be three weeks, and after that I emailed the support team, and the email just wasn’t a thing.”He provided a screenshot of an email that had bounced back from the campaign, showing that his address had been blocked. After that, Bloom said, he called his credit card company to dispute and cancel the charge, which he said is still under investigation.Students account for more than 1,200 of the campaign’s 3,161 reported donations, contributing a total $349,160, with $26,540 of that coming in this year. Bloom, who communicates with other resellers on Discord social media boards, said that “I can say with confidence that at least half of us in the group have to be still in high school.”It is illegal to knowingly solicit and accept campaign donations from anyone under the age of 18. The West campaign did not reply to a request for comment for this article.The Daily Beast spoke with two other West donors who said they were in high school. They gave in January, and also complained that they still hadn’t received their items.Fifteen-year-old Andres Zapata donated $1,300 in late January, but said the promised hoodies still haven’t arrived.“Yea I thought everything was going to go smoothly just like any other website I buy merchandise from,” Zapata said in a text exchange while he was in class. Asked how he came up with that kind of money, Zapata, whose parents are both high school teachers, said he’d been reselling apparel for around two years. “I’ve been just growing my business every day and making more money every single day. I’ve just been flipping my money through hype things,” the sophomore said.The contributions are teeming with irregularities. Brandon Schrock of Laredo, Texas, told the federal government that his employer was “poop,” and his occupation was “pooper.” A number of donors appear to have given under assumed names, some of which appear at first glance as incomprehensible, such as the HDB family, first names NXSUS, JHWAT and EBHXE.Kanye West’s Presidential Hopes Turn to Dust on Election NightThose aren’t names, of course. They’re customer IDs kept on rolls by drop-shipping warehouses. Drop-shippers are online resellers who often buy in bulk and have the items delivered to warehouses such as Portland, Oregon-based HDB Network Technology, which store the items and then ship them directly to customers who buy from the reseller. Addresses traced to dropboxes or warehouses in multiple states, including Oregon, California, New Jersey, Delaware, Florida, New Hampshire and Hawaii.A logistics manager at HDB explained the arrangement with NXSUS, JHWAT and EBHXE.“We service a lot of people, so we give unique codes. The items ship to our warehouse, and once the product is in our warehouse our customer will know,” the manager said.The manager, a Chinese national, pulled up the profile for donor EBXHE. “That’s my warehouse code for one of my customers,” he said. “This customer purchases multiple items. They have to put this code into the website, so they put this ID on the shipping label.”Customer EBXHE, who donated on the same day as customer JHWAT, was located in Japan.It is illegal for campaigns and political committees to knowingly solicit or accept donations from foreign nationals, which the West campaign appears to have done several times.Facebook user William Heart Fixer Surpris is currently slinging Kanye 2020 merch out of Port-au-Prince, Haiti, and a Reddit thread dedicated to gripes about the delays contains a number of comments speculating about “international buyers.”Red Xue, who contributed $280 to the campaign, listed a Redding, California, address associated with a flight school catering to Chinese nationals. Donors hanjiahao WMFQBZ, Baan Zhangqingjia and Brocket Zhangxin reported addresses at west-coast logistics facilities also apparently used by Chinese nationals. Addresses for Kouno Kai and Tommaso Giraudi are affiliated with parcel forwarding company FishIsFast, which touts international service: “Sign up to get your FREE American locker in tax-free Delaware! Buy from your favorite stores in US and ship to your locker, combine them in one shipment and ship it to your doorstep!” West contributor Teklit Goitom’s Denver address traces to a company called Alameda Discount Liquor and Coin Cloud Bitcoin ATM, and Paulo Morante claims to reside at a nursery school in Jersey City.Recently, the West campaign’s site removed its online store and paused donations, but it had raised money and shipped items for several weeks after the hip-hop mogul made good on the last of the debt he owed himself, on Jan. 7. Libowitz said that dead campaigns with no debt aren’t allowed to raise money.“Campaigns can continue raising as long as they have debt on the books, and they can continue to pay costs while working to pay that off. But if the debts have been paid and the candidate has lost, and hasn’t converted the committee to the next campaign cycle, which Kanye has not done, then they can’t raise money. There’s no election for you to legally contribute to. But West continued to sell merch without raising money for debt,” he said, adding, again, “I’ve literally never seen something like this before.”If and when the campaign shuts down, it has to decide what to do with the million-plus it holds in the bank. The campaign for the late Rep. Elijah Cummings (D-MD), for example, transferred almost all of its remaining funds to charities upon his death. West can do that, too, or pass it on to other PACs.While Libowitz thinks that the donations are “certainly not criminal,” he pointed out that the FEC could take action, shutting down the campaign and slapping it with fines for the unlawful donations and lack of compliance oversight.It’s unclear whether the outsider operation was fully aware of the confounding mesh of rules and regulations that is campaign finance law, which snares even the most seasoned specialists.“It’s on the campaign to make a reasonable effort to make sure the donors can give legally,” Libowitz said. “A normal campaign would have a dedicated compliance officer to ensure everything is kosher before filing reports.”West, who in 2015 launched a non-functioning super PAC called “Ready for Kanye,” has so far expended a total $340,000 on compliance consulting in two payments to Indiana-based firm GSF Inc., in September and December. No other political committee tapped that firm in the 2020 cycle. One of those payments — $225,465.50 on Dec. 1 — was topped only by lump payments from three massive political operations: the Republican National Committee, Trump’s Make America Great Again joint fundraising committee, and the campaign committee belonging to former Sen. David Perdue (R-GA). A small Democratic PAC and a handful of so-called “scam PACs” also appear to have shuffled off similar large payments to shady organizations, but those expenditures cover services beyond compliance.Last month, the FEC sent a letter to West’s campaign treasurer, Philadelphia-based CPA Andre Bodiford, whose LinkedIn page says previously worked for multinational accounting firm Deloitte, notifying him that the campaign had accepted “one or more” contributions that appear to exceed the maximum dollar limit placed on individual donors.The letter only flagged one donor: 20-year-old Chase Wittmann of Appleton, Wisconsin, who gave $3,800 to the campaign in two payments, $1,400 on Oct. 31 and another $2,400 on Nov. 2, the day before the election, putting him $1,000 over the line.Wittmann’s parents declined to allow him to be interviewed for this article, but he and cousin Mason Rankin, who also financially backed West’s candidacy, both appear to deal in the lucrative, tech-heavy, not-quite-underground market of online merch flipping. They discussed the sneaker game on the “Where’s the Point?” podcast last April, and internet searches indicate that Wittmann appears to run bot networks that allow him to scoop up limited-release items in a flash.It’s likely that Wittmann effectively got $1,000 in free merch, Libowitz said.“It’s not technically a sale, because you’re donating and not technically buying anything. If you’ve over-donated, you’ll get the difference back but probably wouldn’t be required to return anything you received in exchange for the donation,” he said, adding once more that he had never seen these kinds of exchanges before and so could not say for sure.In this case, the young donors seemed unaware that their contributions were barred by federal law. They just saw a business opportunity. Kanye merch, among the brands items in the world, often sells out almost immediately, but not many eyes were on the Kanye 2020 site. They saw their giving not as a donation, but as a purchase, an investment that would hopefully return thousands of dollars when the shirts become collectible items a few months down the line.Major campaigns frequently woo high rollers with big fundraising dinners and other incentives, but that money often goes to affiliated committees that can accept big checks. Merch, Libowitz said, is typically a way to squeeze donations out of small-dollar supporters.“Do people make contributions to get swag? All the time. Campaigns sell merch not just for visibility but to get low-dollar donors. How do you get that extra 25 bucks? Give them a mug or a hat,” Libowitz said. “People sell things later as collectibles, sure, and people sometimes buy them planning to sell them years down the line, but I’ve never heard of flipping merch during a campaign.”One donor, who asked to remain anonymous to speak freely, said, “I got into flipping stuff on StockX and saw these shirts were selling for $300, so I looked it up [on the campaign website], and they were going for less than that. These things usually sell out, but they were still available for purchase, and I’m still reselling today for way more than I paid.”The donor continued: “The other thing with these hoodies, is Kanye just signed a 10-year deal with GAP. So I’m pretty sure that this hoodie — it’s honestly a badass hoodie, the heaviest hoodie I’ve ever seen in my life, way thick — and GAP makes pretty similar stuff, but it’s also kind of cheap, you know, and being part of the campaign, just the environment he’s created with his merch, I’m very confident this’ll be worth much more in the future.”After emailed complaints about shipping delays went unanswered for several weeks, the donor says that he canceled the charge with his credit card company. Days later, the merch showed up. The donor claims to have already sold a few items online, enough to recoup about half of the upfront cost, with more to go.The Curious Timing of Kim Kardashian’s Divorce From Kanye West“I didn’t realize that was all public information,” said independent entrepreneur Brody Barfuss, when asked about his $2,820 contribution from early January, disclosed in accordance with federal law. Barfuss, who says that in his spare time he flips shoes, hoodies, and even the occasional car, told The Daily Beast that he looked at his donation as an investment.“I already sold five, and I’m just letting the market take care of it. I think they’ll go up in value and continue to go up,” said Barfuss. Right now they’re still selling for $350 in some places, and I have no doubt they’ll continue to go up.”The Kanye 2020 Vision purple hoodie sees wide price swings. EBay asking prices run as high as $330, and this week’s sales on the virtual marketplace StockX have jumped around between $229 and $372 for a size XL.Another West donor who gave more than $1,000, but asked not to be identified, shared a screenshot of the campaign’s response to an emailed inquiry about the long delivery times. The campaign laid the blame on “Covid-19 related delays” as well as a “large data glitch” that shut the operation down for “several weeks.”“Our production is in the works as we experience Covid-19 related delays,” reads the email, which was sent Feb. 17. “Please note that the site also experienced a large data glitch that halted our production for several weeks. We expect a replenishment of product in 10 business days. We understand these delays may not be ideal and we are happy to cancel the existing order if so desired.”The donor declined to cancel, figuring the shipment would arrive eventually, and patience would pay off in the end.While all of the donors that The Daily Beast spoke to for this article looked up to West as an iconoclastic artist and entrepreneur, none of them want him to be president.“I just don’t think he is mentally capable of running a entire country, [sic]” said the 15-year-old Zapata.“No way. I’m a big fan of Ye’s, but he’s just not fit to become president,” Bloom said, when asked if he would have voted for West in November had he been old enough. To sum up his recent experience, he quoted a lyric from “Gotta Have It,” a track from the superstar’s collaborative studio effort with Jay-Z: “Who gon act phonier?’”“I certainly resonate with a lot of different ideas that Kanye projects, and they speak to me,” said Barfuss, but added that he thought West saw other reasons that were “more valuable,” such as media attention and spotlighting his clothing line, “and not so much being president.”“No way I would’ve voted for him,” he said, “but I think that there were a lot of other intentions behind this.”Additional reporting by Will Bredderman Read more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.
