Madison Cawthorn personally lost a lot of money with a failed campaign

After losing his elementary school in May, Rep. Madison Cawthorn (R-NC) now officially identifies as a self-employed investor. But if his political investments are any gauge, he might be considering a new direction in his work — he’s now down more than half a million dollars.

Two unusual campaign finance reports this week reveal that Cawthorn has personally invested a total of $817,000 in his campaign since 2019, while reaping only $261,000 of that amount.

That leaves him with $556,000 personally, more than triple the annual congressional salary of $174,000.

The new campaign reports also underscore a notable financial meltdown that had played out in tandem with Cawthorn’s less-slow political implosion in the first half of the year.

Overall, the Cawthorn campaign raised nearly $4.5 million for his failed 2022 reelection bid. More than $4.9 million was squandered along the way. The totals for 2020 and 2022 combined: $9.2 million in, $9.55 million out.

As of June 30, the campaign had $1,504 in the account.

The spending spree caught up with the campaign at the worst possible time: right when the primaries were taking place. Campaign finance legal experts told The Daily Beast that the Cawthorn operation appears to have overrun more than $200,000 in the weeks following the primary, which Cawthorn topped up with a single personal contribution in late June.

As the campaign struggled to meet its primary election obligations, it had also tapped into donor funds for the general election that it was not legally allowed to touch, The Daily Beast previously reported.

Saurav Ghosh, director of federal reform at the monitoring group Campaign Legal Center, said the situation “could be accurately described as a ‘dumpster fire.'”

“Madison Cawthorn threw himself into campaign finance as he dived into general election funds and it appears he used his own funds to salvage his campaign at the end of the reporting period,” Ghosh told The Daily Beast .

Sharing the analysis, Jordan Libowitz, communications director for Washington’s state watchdog Citizens for Responsibility and Ethics, said Cawthorn is in “uncharted territory.”

“I can’t think of anyone who illegally spent campaign funds and then paid out of their pocket to cover it,” Libowitz said.

“You sometimes see wealthy candidates spend a lot of their own money to get a seat and it fails,” he said. “What you don’t often see is an incumbent member of Congress spending hundreds and hundreds of thousands of dollars and doing so at the end of a loss-making campaign to pay down debt.”

In this case, Libowitz stressed, it’s not just about paying off debts.

“It appears that Madison covered expenses from donor funds set aside for the general election, which he was not allowed to spend and was forced to refund. He’s breaking new ground with that,” said Libowitz.

The revelations came in two reports – the original and one with corrections.

The original report showed that Cawthorn made a lump sum contribution of about $208,000 on June 30 to replenish the overpayments — and associated fees — and bring the cash balance into positive territory.

But he still carried more than $300,000 in campaign debt to two companies. The bulk of that — $184,000 — was owed by EMP Strategies, which was owned by Cawthorn’s chief of staff, Blake Harp. That financial arrangement has raised ethical questions, Pay Dirt previously reported.

But when Cawthorn filed his amended report, the guilt disappeared. Rather than showing a single donation of $208,000 on June 30, that report said Cawthorn had actually given his campaign about $443,000 that day, which was used to pay for the companies.

The altered version also reveals that Cawthorn paid himself $10,000 on previous campaign loans. However, he still owes himself $69,000 — a nice chunk of debt — but he can forgive that as he pleases.

In addition, the quarterly report was submitted 30 days late – the latest possible date by which it would be accepted – and will likely automatically result in an administrative penalty. In Cawthorn’s case, that could be up to $18,000, according to FEC guidelines.

But if the campaign is penalized, only about $1,504 in cash will be reported in the bank, meaning Cawthorn may have to dig back into his own pockets. And as his campaign treasurer, Cawthorn himself could also be on the hook for reporting violations.

Cawthorn was not always the treasurer, only taking over in July following the departure of his contract treasurer, Tom Datwyler. But Cawthorn forgot to remove Datwyler’s signature in the first filing this week, which he then fixed.

The report was also full of curiosities common to Cawthorn’s expenses, including several hundred dollars at Chick-Fil-A and a store called Papas & Beer, $320 at Hendersonville Portable Toilets a week after elementary school, and almost $2,000 at a cigar store Cawthorn Favors, dubbed Casablanca Tobacconist – $584.68 of it the night he lost.

“If you take a quick look at his personal finances, it looks like he has some money,” Ghosh noted. “But it’s a small problem that it’s all so opaque – when someone like me who knows campaign finance law still has a big question about where that money came from and how this campaign used their money. There is a transparency problem here when a campaign does something like this and overdoes it. It is not an ideal situation and needs to be addressed more openly.”

Cawthorn appears to have easy access to cash. He won a $3 million insurance settlement for damages he suffered in the 2014 car accident that paralyzed his legs, and also secured additional payouts for the accident. But its financial disclosures have also raised legal questions of their own, including possible insider trading related to an alleged “pump-and-dump” cryptocurrency scheme this winter.

On May 18, the day after he lost the primary, Cawthorn transferred between $100,000 and $250,000 of his personal wealth into an S&P fund — a safe, conservative investment. His campaign tally would hit rock bottom soon after.