Advertisement

CPAC Tax Docs Reveal Big Losses After Matt Schlapp Sex Abuse Allegations

Illustration by Elizabeth Brockway/The Daily Beast
Illustration by Elizabeth Brockway/The Daily Beast

Pay Dirt is a weekly foray into the pigpen of political funding. Subscribe here to get it in your inbox every Thursday.

As American Conservative Union chairman Matt Schlapp took the stage last year at his group’s annual Conservative Political Action Conference, he was facing lots of empty seats and multiple existential threats.

For starters, The Daily Beast had just revealed that a GOP campaign staffer had accused Schlapp of sexual assault.

But it turns out Schlapp was also having trouble balancing another problem: the CPAC checkbook.

Herschel Walker Staffer: Matt Schlapp ‘Groped’ My Crotch

The Daily Beast obtained the latest long-form tax return for ACU, CPAC’s parent organization, filed last month to cover April 1, 2022, through March 31, 2023. (ACU files on a federal schedule that bleeds across the calendar year.) The document, which was first obtained by watchdog group Citizens for Responsibility and Ethics in Washington and shared exclusively with The Daily Beast, shows negative revenue on the year, and despite some newly adopted changes to the group’s accounting methods, reflects a notable drop in CPAC returns and steep losses across the board.

In fact, the ACU board itself took a massive hit.

Twenty names vanished from the prior year’s list of officers and key employees, leaving just five holdovers on the roster. The form also omitted the names of more than a dozen officers and board members who served throughout the covered reporting period. Some but not all of them left the organization later, many in protest of Schlapp.

Well before CPAC 2023 opened, it was clear from media coverage that attendance and sponsorships both suffered after the assault allegation and lawsuit. Less than two months before the event—billed as “the most influential gathering of conservatives in the world”—former Herschel Walker campaign staffer Carlton Huffman went public with his story, telling The Daily Beast in early January that Schlapp had “pummeled” his crotch against his will while Huffman chauffeured the conservative icon back to his hotel in October, following a late night of drinking in Atlanta.

Huffman told campaign officials the next morning, and he provided communications and other evidence to support his account. Ten days after The Daily Beast broke the story, Huffman followed through with his threat to sue Schlapp, and added defamation claims against his wife.

ACU did not reply to The Daily Beast’s detailed comment request. The Schlapps, through attorneys, court filings, and surrogates, have denied any wrongdoing, characterizing the allegation as a political smear designed to harm the organization.

While the Herschel Walker staffer’s claims certainly don’t seem like a politically influenced smear, it’s clear from the tax filing that the organization did suffer from the allegations. Instead of its planned triumphant return to the D.C. area, CPAC 2023 saw a major dropoff in ticket sales, A-list speakers, and sponsors, including major benefactors like Fox Nation. The vacuum was so abrupt and large that it dominated news coverage and commentary, which not long ago was still a storied annual tradition—glitzy, influential, lucrative, and widely lionized in conservative lore.

The 2023 situation was so dire that the hotel convention center’s emptiness became a tacit theme of the entire gala, a physical embodiment of Schlapp and his organization’s conspicuous refusal to publicly address the assault accusation. The new tax return now puts a price on that exodus, in bright red ink.

According to the filing, ACU’s program revenue dropped by more than half over the prior year, from $11.7 million to $5.4 million. That marked the nonprofit’s lowest program income since the anomalous 2018 event, when backlash to Trump and right-wing affiliations cratered attendance. (This year’s event featured Nazis openly hobnobbing among attendees.)

CPAC itself—like the previous year, there were not just one but two U.S. gatherings—brought in less than $2.5 million, the document states, or about half the conference income ACU reported on its previous filing. The $1.6 million loss from those program services drove ACU into the red—a rare money-losing year for the organization, which depends on CPAC as a key engine of public support.

Meanwhile, ACU’s salaries went up.

In 2023, the group reported paying its employees nearly $600,000 more than it had the year before. The revenue earned from CPAC barely covered the nearly $2.2 million that the organization doled out to its 13 highest earning employees.

New Matt Schlapp Subpoenas Target Document-Shredding at CPAC

Schlapp’s personal income also increased. In fact, for the first time in his eight-year chairmanship, Schlapp took home a salary, with the document claiming he received $350,000. (This aligns with reporting that Schlapp commanded a $600,000 annual salary, starting midway through this reporting period.) His wife, conservative commentator and activist Mercedes Schlapp, brought home around $180,000 for strategic communications work.

The filing states that Schlapp earns his $350,000 keep with a solid five hours of work each week and does not have a written contract.

While it’s unclear how Schlapp spends the majority of his work weeks, a separate business proposal from his private public affairs firm, obtained independently by The Daily Beast, shows that the nonprofit leader was simultaneously seeking $40,000 a month from a Japanese corporate client involved in real estate and cryptocurrency.

The proposal, dated April 21, 2022, detailed an arrangement explicitly designed to skirt laws that would require Schlapp to file lobbying disclosures or register as a foreign agent.

Those financial trajectories—ACU’s revenue dropping and Schlapp’s private take rising—collided with Huffman’s allegations and the ensuing lawsuit, sparking several high-level departures and testing Schlapp’s scaffolding of loyalists. Upon leaving, two longtime ACU board members penned scathing resignation letters that assailed Schlapp for withholding critical information from his own organization despite numerous entreaties for transparency.

Both officials also contended that Schlapp’s alleged mismanagement violated his own group’s bylaws and would present a ripe target for law enforcement, citing systemic financial murkiness, Huffman’s allegations, and the nonprofit’s role in funding the high-powered attorneys Schlapp and his wife retained to fight the lawsuit.

The names of both those former officials—longtime ACU treasurer Bob Beauprez, and vice chair Charlie Gerow—are missing from the latest return, even though their resignations came after March 31, 2023, and they were officials throughout the reporting year. (A firm tied to Beauprez collected a flat $200,000 for “fandraising” [sic].) The document also elided other board members who left after the tax year was over, including Tim Ryan, Morton Blackwell, and Carolyn Meadows.

But it’s not just dissidents who disappeared. Former acting attorney general under Donald Trump, Matthew Whitaker, is also not listed on the form—though Whitaker, who is said to harbor personal political aspirations, has stood by Schlapp and participated in ACU and CPAC events throughout the year.

Lynne Rasmussen, who was promoted to senior vice president of operations, signed the form as the official keeper of the ACU records. Rasmussen was recently subpoenaed in the Huffman case, The Daily Beast reported, in connection with an alleged document shredding frenzy a week after Huffman first went public and just prior to his lawsuit.

In a resignation letter submitted last May, obtained by New York Magazine, Beauprez expressed skepticism that CPAC had made money.

“Matt always responds in much the same way, ‘It looks like we made about $500,000, maybe more,’” Beauprez wrote. “I hope that’s roughly accurate, but I’d like to also see the financial data upon which Matt has reached this conclusion,” he wrote.

The letter prompted Schlapp to email the ACU board, NY Mag reported, reassuring members that “this organization is being run with integrity.”

“We made money on CPAC in DC and CPAC Hungary and we are cash flowing nicely,” Schlapp reportedly wrote.

NBC News Shows Receipts After CPAC Denies Nazis Mingled at Conference

The tax filing calls Schlapp’s statement to the board members into question. The numbers demonstrate an unmistakable hit to the bottom line last year, and indicate the group actually posted significant losses from its events.

Beauprez also raised internal concerns about inconsistencies in the work of a Republican operative that Schlapp brought on to handle ACU’s books following the resignation of former finance chief, Ryan McGowan. The filing, which was signed by secretary Matt Smith and prepared by a Virginia-based CPA named Robert Ben-Kori, features various new changes in the group’s accounting methods—changes which make it specifically difficult to gauge the true depth of the damage to the organization’s crown jewel.

For instance, the form states that the ACU spent a grand total of $148,542 on “conferences, conventions, and meetings” last year. That number appears impossibly at odds with the simultaneous claim of a $450,000 “conference event” expense to rent out the Hilton Anatole for CPAC’s summer 2022 gathering in Dallas.

Meanwhile, travel expenses mysteriously topped $1.4 million. That’s more than 10 times the previous year’s travel costs, and more than the ACU reported spending on travel in all tax returns from the previous decade, combined—by a full $200,000.

The document is also apparently the first of any recent ACU returns to single out “CPAC” in its program revenue. None of the prior returns isolate CPAC, with all of them listing “conference” income, along with “advocacy” and “charitable support,” going back years. The new filing doesn’t list any of those three categories, replacing them with “CPAC,” “program support,” and a “management fee revenue” category, which racked up $2.2 million.

It’s unclear why the accounting changed, or what those revenue streams signify. While ACU does farm out satellite “CPAC” branded events overseas—including in Hungary, Australia, Brazil, and Japan—that practice predates this filing.

Schlapp, however, appears to have taken up a new personal practice involving overseas clients.

According to the business proposal obtained by The Daily Beast, Schlapp and a partner, lobbyist Stephen Replogle, were at this same time soliciting foreign clientele for their public affairs firm, Capitol Consulting Group.

Matt Schlapp Held an Exorcism at CPAC Offices After Junior Employees Resigned

While lobbying disclosures tie Replogle to CCG, Schlapp has not filed as a CCG lobbyist. However, Schlapp’s own private lobbying firm—Cove Strategies—lost all but one of its clients within a year of the Jan. 6 attack. Schlapp has defended the rioters, going so far as to establish a legal defense fund to support them through the ACU.

That business proposal, dated April 2022, was discovered on ACU office premises, according to a person with direct knowledge of the events. The document pitches a “Mr. Kawajiri”—an official with Forbes Asset Management Japan Co., Ltd—who, according to the document, is involved in real estate and cryptocurrency. The proposal offers to connect Kawajiri to non-government Republican political influencers in the United States—including several members of the Trump family and a number of former and rising elected officials, like Mark Meadows, J.D. Vance, Mike Pompeo, Robert O’Brien, and Nikki Haley.

“This activity alone would not require any registration under the Lobbying Disclosure Act,” the proposal states, explaining that “activity focused on advancing Mr. Kawajiri’s personal business interests in the United States and not promoting any political or public interests allows us to still share Mr. Kawajiri’s story and make the necessary business introductions in the US (listed below) while still qualifying for an exemption to FARA registration (e.g., the ‘trade/commerce exemption’).”

The six-month plan doesn’t appear to offer anything beyond creating a personal profile and making these introductions, described as “targeted meetings and other customized events” in broader social settings, including “conferences, dinners and Washington soirees.”

Schlapp priced these services at $40,000 a month. His sole remaining lobbying client—software giant Oracle—pays him $50,000 every three months, federal disclosures show.

Read more at The Daily Beast.

Get the Daily Beast's biggest scoops and scandals delivered right to your inbox. Sign up now.

Stay informed and gain unlimited access to the Daily Beast's unmatched reporting. Subscribe now.