Embattled conservative activist Matt Schlapp made an offer in March to settle the multimillion-dollar sexual battery and defamation lawsuit against him, but the proposal was rejected, according to multiple people with direct knowledge of the matter.
The offer from Schlapp was in the low six figures, according to the sources. But Schlapp’s accuser—Republican strategist Carlton Huffman, who filed the lawsuit against Schlapp and his wife, Mercedes Schlapp, in January—turned it down and countered with a substantially higher sum. Schlapp did not accept the counterproposal, the sources said.
The settlement negotiations were brought to the attention of officials at Schlapp’s organization, the American Conservative Union, which hosts the annual CPAC conferences. But the ACU board was not formally consulted and did not vote on the offer ahead of time, according to multiple people with knowledge of the events. These sources spoke to The Daily Beast on the condition of anonymity, citing fear of retaliation.
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In a statement to The Daily Beast on behalf of the Schlapps, their publicist Mark Corallo denied that a settlement was offered.
“We take seriously our professional conduct and would never discuss the details of confidential conversations between lawyers. But since it appears Mr. Huffman or his attorney have done so, let me set the record straight: There was no settlement offer,” Corallo said. “From the outset Mr. and Mrs. Schlapp have been and remain prepared to go to trial and are confident of prevailing in court.”
Asked about the veracity of the assertion that “there was no settlement offer,” Huffman’s attorney, Tim Hyland, told The Daily Beast that the claim was “categorically false.”
These back-door negotiations are among a number of developments that have raised internal concerns at the ACU in recent months, as Schlapp has persistently kept the board out of the loop in discussions related to Huffman’s allegation, the lawsuit, funding for his legal defense, and the ACU’s own bookkeeping, according to sources with knowledge of the events and previous news reports.
Schlapp—through spokespeople, surrogates, and legal counsel—has denied that he ever inappropriately touched Huffman, who claims that Schlapp “grabbed my junk and pummeled it at length” one night last October, while Huffman, at the time a staffer with Herschel Walker’s senatorial campaign, chauffeured the CPAC chairman to his hotel after a night of drinking in Atlanta. Huffman provided contemporaneous communications to support his account, which was further corroborated by campaign officials. Several national outlets confirmed the existence of the allegation ahead of Huffman’s lawsuit.
But Schlapp’s apparent attempt to settle the lawsuit may cast new doubt on the ACU chairman’s story.
Multiple sources described Schlapp’s behavior in response to the allegations as “bizarre.” He continues to reject calls for an internal investigation, and ACU board meetings have been structured in a way that has precluded any discussion of the allegation. Those moves have only deepened concerns, even among longtime allies who initially defended him, according to the sources.
One such former ally—former ACU vice president Charlie Gerow, who in January put his name on a pugilistic denial to The Daily Beast’s initial report about Huffman’s claims—put these issues front and center in his resignation last Friday.
In his public statement, Gerow called on the organization to conduct an “independent forensic audit of the organization’s finances,” secure “a written opinion of counsel that the organization is in full compliance with its own bylaws and all applicable law,” and “thoroughly review” the exit interviews of “the large number of staff who have recently left.”
In a private letter, Gerow also urged the board to investigate all allegations against Schlapp, including any new accusations that may arise. The Daily Beast has confirmed the existence of two new allegations through multiple people informed of the incidents, as well as one accuser—a former CPAC staffer—who confirmed the existence of these allegations directly, adding for the first time that he had informed CPAC staff about the incident at the time. The Washington Post first reported on those new allegations on Saturday.
Asked for comment, Gerow told The Daily Beast his letter “speaks for itself.”
As the lawsuit against Schlapp proceeds deeper into the discovery phase, these sources with knowledge of the matter said the CPAC leader’s moves appear directly at odds with transparency. And as the months go by, these people said, Schlapp’s stubborn refusal to address questions about Huffman’s allegation appears increasingly reckless, putting his organization on a collision course with financial and legal liabilities.
Asked what could explain a desperation so apparently fervent that it has even begun to repel longtime allies, one person with direct knowledge of the matter replied, “This organization is all he has. There’s nothing to fall back on.”
In recent weeks, the lawsuit’s discovery phase has uncovered new information that has led Huffman to seriously contemplate adding the ACU as a defendant in the lawsuit, according to two people with direct knowledge of the matter. Former ACU officials told The Daily Beast that this move has been anticipated within the organization for some time, and could potentially shackle the board to the largely secretive legal strategy Schlapp has been pursuing—a track which, these people said, appears headed straight for a potentially damaging conclusion.
Schlapp has aggressively denied Huffman’s allegation through spokespeople and court statements filed by his legal counsel. His surrogates have also highlighted Huffman’s own flaws—including a restraining order against him for alleged sexual impropriety with two young women in February, as well as his expression of solidarity with white supremacist ideologies more than a decade ago. Huffman has acknowledged and denounced those previous statements as “ugly.”
Schlapp himself has not directly addressed the accusation. His attorney, along with counsel for ACU, did not reply to The Daily Beast’s detailed request for comment.
In a 362-word statement, ACU and CPAC spokesperson Alexandra Preate falsely claimed that The Daily Beast was “on a partisan mission” with Huffman and his lawyer to “destroy ACU/CPAC, one of the most effective and respected conservative organizations in the country, and its leader Matt Schlapp.” (Huffman, for his part, is a lifelong conservative and Republican political operative.)
The statement also took shots at Gerow, “who for some time through his actions has given his colleagues on the board the impression” that he was angling for Schlapp’s chairmanship. Preate also claimed that Gerow was the only person who “repeatedly” urged Schlapp to settle the case, and “lost the confidence and trust of his colleagues on the board and was not renominated.”
“For their part, the Schlapps have been firm in their resolve to be vindicated and are fully prepared to go to trial,” the statement continued, adding that the couple believes that “a jury of good and honest citizens” will discredit Huffman as “a former white supremist” [sic] with his own history of inappropriate sexual conduct.
The statement did not explicitly deny or even address the veracity of Huffman’s allegations.
This month, Huffman also subpoenaed ACU’s one-time chief financial officer, Bob Beauprez, who submitted his resignation letter in May. In that letter, Beauprez also rang the alarm about Schlapp’s handling of the allegation, with the organization’s top fiduciary separately declaring that he no longer had confidence in the accuracy of ACU’s financial statements.
Beauprez’s uncertainty extended to the funding for Schlapp’s legal defense. While the ACU agreed to front Schlapp $50,000 to retain his attorney—Benjamin Chew, who defended Johnny Depp in part of his defamation case—Schlapp also incurred another $270,000, which he claimed to have raised through ACU and donors, according to Beauprez’s resignation letter.
The CFO, however, said he could not independently verify exactly where that money came from—or how it had passed through the organization.
Schlapp has spun up a number of fundraising entities, including the First Amendment Fund, which purports to raise money for Jan. 6 defendants, and the Chestnut Street Council, an opaque donor coalition formed in early 2022 that appears to have dissolved this year, according to Wyoming business records.
Beauprez declined to comment for this story.
These questions also apply to Mercedes Schlapp’s defense, which Chew is also handling. Huffman has accused Schlapp’s wife of defamation, citing private statements she made about him in response to The Daily Beast’s reporting. ACU’s most recent tax filing, from 2022, indicates that Mercedes Schlapp is on the organization’s payroll, receiving $175,500 for “strategic comm.” It isn’t clear from the tax filing whether Mercedes Schlapp was a direct employee or an independent contractor.
That question could carry implications for ACU’s financial obligations, specifically whether it’s proper for the organization to cover legal fees in connection to statements that could fall outside the scope of her employment.
In response to questions about Mercedes Schlapp’s legal fees, Preate replied that she is “represented by counsel retained by her insurer.” She did not immediately reply to a follow-up about whether the insurer is strictly private or part of ACU’s coverage.
In December, shortly after Huffman posted a tweet accusing Schlapp of drunken misconduct, the ACU ordered all employees to sign non-disclosure agreements, The Washington Post previously reported.
But Huffman’s accusation no longer stands alone. The Daily Beast has independently confirmed The Washington Post’s reporting this weekend about two more allegations against Schlapp that have come to the attention of ACU officials.
One of the alleged incidents occurred during a CPAC work trip in Palm Beach, Florida, in early 2022, when Schlapp made an allegedly unwanted and inappropriate advance towards an executive assistant to a wealthy GOP donor, according to multiple people informed of the incident. When The Daily Beast reached out to the alleged victim, he said he had “no comment for now.”
In the second incident, from early 2017, Schlapp allegedly tried to kiss a male staffer while drunk after a CPAC event, the staffer told The Daily Beast. The staffer, who no longer works for the organization, provided documentation from earlier that same evening—also reported by the Post—showing Schlapp made what the staffer described as unwanted and intrusive physical contact. Multiple former officials confirmed knowledge of the allegation. They also corroborated the former staffer’s claim that he informed CPAC staff about the incident at the time.
In a statement to the Post, ACU board member Matt Smith claimed that Gerow had “fabricated” both of these allegations—an accusation that the reporting directly undercuts.
The Daily Beast asked the former staffer if he would like to comment on his 2017 experience, specifically in light of Smith’s implication that it did not happen and he does not exist.
“I learned that even though I held someone in high regard at the time, giving him the benefit of the doubt was naive,” the former staffer said.
