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After losing his primary in May, Rep. Madison Cawthorn (R-NC) now officially identifies himself as a self-employed investor. But if his political investments are any measure, he might consider a new line of work—he’s now down more than half a million dollars.
A pair of unusual campaign finance reports this week reveal that since 2019, Cawthorn has personally invested a total of $817,000 into his campaign, while recovering only $261,000 of that amount.
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That leaves him personally in the hole $556,000, more than three times the annual congressional salary of $174,000.
The new campaign reports also punctuate a remarkable financial collapse that had been playing out in parallel to Cawthorn’s not-so-slow motion political implosion over the first half of the year.
In all, the Cawthorn campaign raised almost $4.5 million for his failed 2022 re-election bid. It blew through more than $4.9 million along the way. The grand 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 bank.
The spending spree caught up to the campaign at the worst possible time: right when the primary election hit. Campaign finance law experts told The Daily Beast that the Cawthorn operation appears to have overdrawn more than $200,000 in the weeks after the primary, which Cawthorn backfilled at the end of June with a single personal contribution.
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While the campaign was scrambling to make its primary election obligations, it had also tapped donor money for the general election, which it wasn’t legally allowed to touch, as The Daily Beast previously reported.
Saurav Ghosh, director of federal reform at watchdog group Campaign Legal Center, said the situation “could accurately be described as a ‘Dumpster fire.’”
“Madison Cawthorn put himself in campaign finance hot water when he dipped into the general election funds, and it looks like what he did at the end of the reporting period is use his own funds to bail out his campaign,” Ghosh told The Daily Beast.
Jordan Libowitz, communications director for government watchdog Citizens for Responsibility and Ethics in Washington, shared the analysis, saying Cawthorn was in “uncharted territory.”
“I can’t think of anyone else who illegally spent campaign funds and then paid out of his pocket to cover it,” Libowitz said.
“You’ll sometimes see wealthy candidates spending a ton of their own money trying to buy a seat, and it fails,” he said. “What you don’t often see is an incumbent sitting member of Congress spending hundreds and hundreds of thousands of dollars, and doing it at the end of a losing campaign to repay debts.”
In this case, Libowitz pointed out, it’s not just repaying debts.
“It appears that Madison was covering for spending donor funds reserved for the general election, which he wasn’t allowed to spend and was forced to refund. He’s in uncharted territory on that one,” Libowitz said.
The revelations came in two reports—the original, and then one with corrections.
The original report showed Cawthorn contributed about $208,000 in a lump contribution on June 30, backfilling the overdrafted payments—and the associated fees—and bringing the cash on hand into the positive range.
But he still carried more than $300,000 in campaign debt to two companies. The bulk of it—$184,000—was owed to EMP Strategies, owned by Cawthorn’s chief of staff Blake Harp. That financial arrangement has raised ethics questions, Pay Dirt previously reported.
But when Cawthorn filed his amended report, the debt vanished. Instead of showing a single $208,000 donation on June 30, this report said that Cawthorn had actually given his campaign about $443,000 that day, which was used to pay the companies.
The amended version also shows that Cawthorn repaid himself $10,000 for previous campaign loans. He still owes himself $69,000, however—a nice chunk of debt—but he can forgive that at will.
What’s more, the quarterly report was filed 30 days late—the latest possible date it would be accepted—and will likely draw an automatic administrative fine. In Cawthorn’s case, that could run as high as about $18,000, according to FEC guidelines.
But if the campaign does get penalized, it reported only about $1,504 cash in the bank, meaning Cawthorn might have to dip into his own pockets again. And as his campaign’s treasurer, Cawthorn himself could also be on the hook for reporting violations.
Cawthorn wasn’t always the treasurer, only taking over in July after the departure of his contracted 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 chock full of curiosities common to Cawthorn’s expenses, including several hundred dollars at Chick-Fil-A and a place called Papas & Beer, $320 to Hendersonville Portable Toilets a week after the primary, and nearly $2,000 to a cigar shop Cawthorn favors, called Casablanca Tobacconist—$584.68 of it the night he lost.
“Looking briefly at his personal financial disclosures, it looks like he has some money,” Ghosh remarked. “But it’s a bit of a problem that this is all so opaque—when someone like me who knows campaign finance law is still left with a big question about where this money is coming from and how this campaign used its money. There’s a transparency problem here when a campaign does something like this and overdraws. It’s not an ideal situation, and needs to be addressed more openly.”
Cawthorn would appear to have ready access to cash. He won a $3 million insurance settlement for damages he sustained in the 2014 car wreck that left his legs paralyzed, and secured additional payouts for the accident as well. But his financial disclosures have also raised legal questions of their own, including about 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 moved between $100,000 and $250,000 of his personal wealth into an S&P fund—a safe, conservative investment. His campaign account would bottom out soon afterwards.
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