The (other) scandal that might sink Cain

His campaign manager\'s dirty dealings could be more damaging than the sexual harassment allegations

Published November 2, 2011 11:00AM (EDT)

Mark Block and Herman Cain     (Chris Usher/AP)
Mark Block and Herman Cain (Chris Usher/AP)

This piece originally appeared on AlterNet.

In a hallway outside the ballroom in the National Press Club, a mustachioed man looked ill at ease as he was mobbed by reporters asking questions about sexual harassment allegations made against his boss, GOP presidential hopeful Herman Cain, on the Politico Web site the night before.


Mark Block, whose face is now familiar to thousands as the Smoking Man in the Cain campaign's latest video, told reporters that Cain was unaware of any settlements paid to the two women who made the accusations while Cain served as president and CEO of the National Restaurant Association, as Politico reported. But the reasons for Block's discomfort likely went beyond Cain's situation to his own. Just hours before Politico burst forth with its explosive accusations, the Milwaukee Journal Sentinel laid out a case that suggests significant illegal campaign activity on Cain's behalf by a nonprofit organization, Prosperity USA (also known as America's Prosperity Network), controlled by Block and linked to David Koch's Americans for Prosperity. As AlterNet has reported, Block, the former director of AFP's Wisconsin chapter, has long been known for playing dirty in politics.

Pay to Play?

Prosperity USA, described as a 501(c)(3) in its incorporation documents (and which now seems to be defunct), appears to have been footing the bill for Cain campaign expenses, including a highly unusual payment of $100,000 to the right-wing Congress of Racial Equality in advance of a major speech by Cain. Daniel Bice, who writes the Journal Sentinel's No Quarter blog, reports that the payment to CRE appears to have been disbursed from $150,000 in loans raised from unnamed donors. While Bice says that Cain was apparently not paid for that appearance, the New Yorker's Jane Mayer this month uncovered information suggesting that Cain's speaking fees are not directly reported as such on his disclosure forms to the Federal Elections Commission, but are shielded from public view as transactions that take place between his private company and the speaker's bureau representing him. Writes Mayer:

Yet, mysteriously, Cain discloses no payments from the Washington Speakers Bureau on his federal forms. Instead, on his 2011 F.E.C. form, he lists unspecified payments of between $50,000-$100,000 to his company, the New Voice, which he describes as a “public speaking” and “publishing” entity.

A Visit With Mr. Koch

Among Bice's revelations is a record showing that Prosperity USA paid for Block's travel to meet with David Koch, the billionaire right-wing funder behind Americans for Prosperity and its foundation, and AFP president Tim Phillips in Washington, D.C., in January -- after Block was named "chief of staff" of the Cain campaign. Although the records Bice combed through do not specify a date for that trip, we know that both Phillips and Koch were in the nation's capital to celebrate the swearing in of the new Congress on January 6, and to see the speaker's gavel passed from Rep. Nancy Pelosi, D-Calif., to John Boehner, R-Ohio.

Koch and Phillips had much to celebrate that day, not only in the transfer of power from the Democrats to the Republicans in the House of Representatives, but also for the high number of Tea Party-allied freshmen lawmakers in the new class who owed their good political fortunes to Koch and Americans for Prosperity. They were particularly successful in Wisconsin, where they helped to elect two new congressmen, Sean Duffy and Reid Ribble, and managed to unseat longtime U.S. Sen. Russell Feingold with their ally, Ron Johnson.

Until he signed on as Herman Cain's campaign manager in December, Block ran the Wisconsin state chapter of Americans for Prosperity. In addition to helping to send a handful of Koch-backed lawmakers to Washington, Block also helped elect Scott Walker to the governor's mansion along with a cadre of right-wingers to the state Legislature, where they wasted no time in launching an assault against Wisconsin's public employees and their unions. And it was Block who recruited Herman Cain to run for president.

Taxpayer Subsidy for Cain's Private Jet?

Nonprofit organizations classified as 501(c)(3) under the IRS code are forbidden to engage in electioneering. Yet Prosperity USA lists on a rather messy statement of profit and loss, uncovered by Bice, that it is owed more than $40,000 from Friends of Herman Cain (the official name of the fundraising arm of Cain's presidential campaign), including at least $16,000 for Cain's travel on the charter jets of Hill Aircraft to appear at events sponsored by Americans for Prosperity, as well as an event in Chicago called RightNation, which the statement says Cain attended at the "request of AFP." Hill Aircraft, on its Web site, offers this description of its services:

Our world class FBO facilities offer all the amenities for both passengers and pilots, including computer work stations with internet access, plasma TV screens for catching up on national and world events, pilots lounge with theatre seating and security camera monitors and state of the art flight planning facilities. Our line technicians are NATA Safety 1st trained and Hill Aircraft is a State of Georgia recognized drug free workplace. Our concierge services can take care of passenger and crew ground transportation, hotel reservations and catering, we can even arrange for sporting event tickets or a round of golf. Let Hill Aircraft show you why we have been named the #1 FBO in Georgia multiple times.

Payment for this campaign travel by a tax-exempt organization, which Prosperity USA claims to be, would amount to a taxpayer subsidy of plush accommodations for a political candidate. It appears, according to the Journal Sentinel, that Prosperity USA also forked over $3,700 for iPads used by the Cain campaign.

Koch-Linked Nonprofit Pays Singer of Cain Anthem

The records unearthed by the Journal Sentinel also note a payment of $1,500 to Krista Branch, who sings the Cain anthem, "I Am America" in the campaign's videos. Bice also reports that Branch's husband, who composed the song, works for the Cain campaign:

Branch's husband, Michael, who wrote the song, has been paid $11,250 in his role as the Cain campaign's Tennessee director and $7,360 as a fundraising consultant.

Prosperity USA also appears to have provided the funding for Prosperity 101, the Koch-linked workplace indoctrination program on which AlterNet (in partnership with the Investigative Fund at the Nation Institute) published an exposé last June. Our reporting showed Prosperity 101, which was fronted by Cain and Wall Street Journal editorial board member Stephen Moore, to be a for-profit venture, with Linda Hansen, the Cain campaign's current fundraiser, listed as its registered agent. Prosperity USA's profit and loss statement shows $12,000 billed to the nonprofit by Hansen's apparently for-profit workplace program, with a note saying that another $30,000 worth of bills from Prosperity 101 had just been submitted by Hansen for payment.

Over the course of our six-month investigation, AlterNet repeatedly sought comment from Hansen and Block regarding the nature of Prosperity 101, its corporate status and its relationship to Americans for Prosperity, but our calls and emails went unreturned. A spokesperson for Americans for Prosperity told us that Prosperity 101 was not a program of AFP, although an item on its Web site seemed to contradict that. On January 6, I approached Tim Phillips after an event in the Washington, D.C., metro area, and told him that neither Block nor Hansen would return my calls, despite the suggestion of AFP communications staff that I speak with them. "Maybe they just don't want to talk to you," he said.

Apparently, Mark Block doesn't want to talk to the Journal Sentinel, either. He failed to return Bice's calls, eventually sending the reporter an email on Friday night that read, according to Bice: "Will be able to respond to you, but need to schedule time to review questions. Obviously in the midst of a Presidential campaign I cannot drop everything."

Above the Law

As a political operative, Block is known to be both hardworking and ruthless, often ignoring the law. As AlterNet reported, Block's flouting of Wisconsin campaign law got him banned from participating in political campaigns there for three years. He also paid a $15,000 fine for the illegal use of an outside group in the campaign he managed for a judicial candidate. Practically the minute the ban was up, Block signed on to lead Americans for Prosperity's Wisconsin chapter, and to help build the national organization.

In 2010, the liberal advocacy organization, One Wisconsin Now, uncovered Block's role in a vote-caging scheme apparently designed to suppress the votes of college students and African Americans in Milwaukee. Block denied the accusation until the leader of a Tea Party group challenged him.

According to the experts Bice quoted in his investigative report on Prosperity USA, Block once again appears to have played fast and loose with the rules. From Bice's report:

"If the records accurately reflect what occurred, this is way out of bounds," said a Washington, D.C.-based election lawyer who advises many Republican candidates and conservative groups on campaign issues. The lawyer asked not to be identified because of those affiliations.

Can Cain Survive Without Block?

Should Mark Block be forced from Herman Cain's campaign, it's difficult to see how the campaign will carry on: the Herman Cain campaign essentially is Mark Block. There's little in the way of campaign staff, and for ground organizing, the campaign appears to be dependent on the Americans for Prosperity network that Block, with Cain as his main rally-speaker, helped to build.

For months, corporate media ignored Cain's deep connections to David Koch and Americans for Prosperity -- connections that AlterNet has tracked since June. Today, at the National Press Club, Herman Cain appeared to survive the light grilling he received at the hands of NPC  president Mark Hamrick about the sexual harassment allegations. Cain said he had never sexually harassed anybody, that false accusations had been made against him, and that he was personally unaware of any settlement paid by the National Restaurant Association to women who had made complaints against him. "I hope it wasn't for much," he added, "because I didn't do anything."

Yet Hamrick's introduction of Cain may have been more subtly damaging than his questioning of the candidate. In recounting Cain's professional background, Hamrick noted that Cain has "worked at the Koch family-funded Americans for Prosperity," an item not listed on Cain's campaign résumé -- but one now impossible to hide.


H/t Sarah Posner for calling our attention to Bice's report. You can read here Posner's coverage of a Tea Party group's gathering to plan the Milwaukee vote-caging scheme in which Block was later implicated.

By Adele M. Stan

Adele M. Stan is AlterNet's Washington correspondent.

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