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Rev. 11.11.

18
Steve Bresnen

Preliminary Report:
The American Phoenix Foundation, Inc.

To: Interested Parties

An extensive 3-year investigation of The American Phoenix Foundation, Inc. ("APF") raises
serious questions:

• Why did a donor whose true identity remains unknown pass two contributions totaling
$920,000 through the National Christian Foundation to APF, instead of directly to APF?
• After APF accepted that $920,000, why were no more federal tax returns filed for APF? Was
it because it would have shown questionable uses of the money?
• Was this purported charity actually used to dupe donors out of that money and more?
• Or, did the donors know what would become of their money and, if so, when did they know
it?
• Why did Ben Wetmore funnel $100,000 to Joe Basel's firm through another entity on the
same day Wetmore gave $250,000 of APF's money to that other entity?
• Why, within a few days, did Wetmore withdraw another $100,000 in cash taken from
APF's accounts?
• Why did Wetmore transfer $670,000 taken from APF to Basel through multiple non-profit
and for-profit entities with no documentation for the reasons?
• What happened to the remainder of the more than $570,000 not yet traced?

This report is "preliminary" because efforts are still under way to determine exactly what
happened to more than $670,000 in tax-deductible donations made to APF and attempt to alert
those who may have been cheated.

When I set out, it was to understand the "who, what, when, why and how" of APF's attempted
disruption of the 2015 Regular Session of the Texas Legislature. The investigation has brought
answers to many of those questions and showed those activities were essentially worthless.
But, the whole story became far more interesting than simply looking into what happened in
Austin in the spring of 2015.

The answers also shed light on a small band of scammers with a long history of bungling and
who appear to have only one talent: Getting a lot of cash from people who are too easily
separated from their money.

Please find below what we know, at this point.

Steve Bresnen

Executive Summary
Austin, Texas
steve@bresnenassociates.com

Steve Bresnen is solely responsible for the contents of this report.
Rev. 11.11.18 Preliminary Report

APF's failed effort to covertly surveil the forwarded that same day to a for-profit entity
Texas Legislature and some lobbyists and owned by Basel, for which Wetmore was
their clients before and during the 2015 Vice-President and General Counsel. Just
legislative session brought APF to public four days later, Wetmore withdrew
attention when that surveillance became $100,000--in cash--from the second entity's
harassment. But, the investigation shows account for purposes for which there has
that the sums of money that flowed through been no accounting. Nine days later,
APF far exceeded the relatively small Wetmore moved $200,000 from the second
amounts spent on its "secret" legislative entity into the account of Joe Basel's company.
filming project, the roots of which extended A few weeks later, on the day the last
back to 2013. installment of APF money was received by
the second entity, Wetmore withdrew all but
Two principal actors controlled APF: Joe $20,000 from its account and paid out
Basel and Ben Wetmore. Basel may have $250,000, again to Joe Basel's company. (See
obtained the contributions, but Wetmore Page 9)
moved the vast majority of the money around
at the times relevant to this report. APF was Wetmore refused to identify who owned
chartered under the Texas Nonprofit Basel's company, even though Wetmore
Corporation Act and granted federal claimed to be its General Counsel, and claims
501(c)(3) status, making contributions to it not to recall any of these major
tax-deductible and its income tax-exempt. On transactions, even while acknowledging
August 31, 2014, tax and banking records his signatures on the documents.
show, APF's sole asset was a bank account
holding just $1744. The second entity was soon out of money and
was subsequently dissolved, as was Basel's
Then, in a two-week period straddling company.
October and November 2014, APF deposited
$920,000 from what appears to have been a Ostensibly, Wetmore and Basel fought
single source, including one contribution of disclosure of their activities to "protect the
$670,000 and another for $250,000 (See Foundation's donors," but their resistance
Pages 9-10). Within weeks, $670,000 was was really about hiding how they
withdrawn from APF by Wetmore in three disposed of a very large sum of the
rapid installments. The money was deposited donors' money after routing it through
into an account created by Wetmore for a multiple entities one or both of them
second entity he controlled (See Page 7), controlled.
which bank records show never had any
money except what was taken from APF by Why they did this is not completely
Wetmore. understood--at this time.
$100,000 of the money Wetmore moved from
APF's account to the second entity was

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Rev. 11.11.18 Preliminary Report

The Investigation

The information reported here resulted from In addition, APF's website solicited funds for
the activities of five lawyers and their programs to train "citizen journalists." But,
support staffs with long experience regarding no such activities had occurred recently
the governance and operation of non-profit according to the site; so-called student
charities, research using public records and testimonials were outdated; and, no one
basic discovery techniques, and civil and associated with APF appeared to have
criminal litigation. This Preliminary Report credentials that would justify holding
was compiled by me and I am solely themselves out as qualified to train
responsible for its contents. journalists. This would be especially true if
APF charged for taking the extensive list of
Information was gathered from: courses they were advertising, assuming APF
did not hold a license to sell such courses. It
• Texas Secretary of State records is unknown whether APF ever charged for its
• Records gathered from other states classes or if any classes were actually
• Internal Revenue Service materials conducted.
• State and federal court documents from
multiple jurisdictions During the 2015 legislative session, Amy
• County assumed name and property Bresnen and I briefly ran afoul of and
records identified some of the individuals associated
• Basic legal research sources with APF's activities. These out-of-towners'
• Common web-based sources presence in Austin raised further disparities
• Mainstream and non-mainstream media between APF's website solicitations and its
actual activities.
• Depositions
• Subpoenas
On May 26, 2015, I hand-delivered a request
• Banking records
to Basel and Wetmore--as they sat in the
• Social media
House Gallery--to review the financial
• Informants records that APF is required to maintain and
make public under the Texas Business
How did the investigation start and Organizations Code. This longstanding law
proceed? During the spring of 2015, then- protects members of the public who are
Houston Chronicle reporters Lauren solicited for money by such entities, which
McGaughy and David Saleh Rauf, produced are intended to serve public purposes. It
several articles about APF, including an applies only to non-profits that have no
interview with Basel and his wife, Hannah members. That is because a non-profit that
Giles. McGaughy and Rauf reported about does have members is required to disclose its
several individuals who had either finances to its members and the law gives
contributed to APF or arranged for others to those members the right to police the
do so. On the record, those named organization's practices. Failure to
individuals stated that they were unhappy maintain proper financial records and
about APF's use of donated money, had cut make the records public is a Class B
off further contributions and, in at least one misdemeanor.
case, asked for money to be returned.

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Basel and Wetmore declined to provide the the information needed to satisfy APF's
documents, and may not have even obligations to disclose its finances, file tax
maintained them, as required by law. In June returns, determine whether it had potential
of 2015, Austin attorney Anatole Barnstone claims against any third parties and wind it
filed suit on my behalf in Travis County up.
District Court seeking a Writ of Mandamus
directing APF and Basel, its Custodian of The Court authorized Austin attorney
Records, to provide access to APF's financial Stephen Fenoglio to represent Mr. Shelley.
records. Wetmore initially acted as APF's Mr. Fenoglio has vast experience with non-
attorney in the suit and instituted a series of profit organization law. He had briefly served
dilatory tactics in an attempt to avoid as co-counsel to Mr. Barnstone. Mr. Fenoglio
compliance. The process injected delay but promptly initiated basic techniques used for
the courts overruled every such tactic and I discovery in civil litigation.
was awarded a final judgment. Post-
judgment discovery under the Texas Rules of Since his appointment, Mr. Shelley has filed
Civil Procedure ensued. periodic updates with the Court, which are
public records. (Parts of this Preliminary
Before the judgment, in a deposition under Report draw on Mr. Shelley's official updates
oath, more than 80 times Basel refused to filed with the Court.) In each, he has
answer, citing his 5th Amendment documented efforts to obtain information
constitutional right not to incriminate about specific transactions from Basel and
himself. He claimed not to understand Wetmore, particularly those that are
fundamental questions about APF's money, necessary to complete tax returns for 2014,
despite having a degree in finance, and 2015 and 2016. For example, he documented
denied having basic knowledge of the Basel's and Wetmore's repeated refusal to
organization, including claiming that he could provide that information or document more
not identify the APF president, officers or than $100,000 in expenses for which they
bookkeeper. He told multiple judges he did claimed "reimbursement" from APF. Mr.
not know where the records were, after Shelley also agreed to comply with the final
"searching" in two storage rooms from which judgment awarded to me--and has to the
he had been locked out because he had not extent possible at this time.
paid the rent. In addition, the evidence
showed that federal tax returns had not been Subpoenaed bank records have provided
filed in recent years. much information about deposits and
withdrawals, as have payroll records.
Receiver appointed: Against this backdrop
of APF in chaos and run by apparent However, the purposes for key major
scofflaws, the Court appointed a receiver to withdrawals remain unknown. I.R.S.
take control of APF. The Court appointed regulations require a non-profit's tax return
Dan Shelley of Austin, an attorney with (known as a "Form 990") to show
substantial experience with non-profits. Mr. expenditures in categories and disclose
Shelley is a former State Senator and State payments to individuals related to the entity.
Representative from Harris County and To comply with federal law, the Receiver
served as a high-ranking aide to two former must know the reasons for an expenditure
Governors. Mr. Shelley was directed to gather or withdrawal. In addition, APF is obligated
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by Court order to provide me with the were then recent transactions. That is, if he
financial records required by the Business or Basel had complied. However, Wetmore
Organizations Code. Those records must be "remembered" in some detail smaller
in a form that complies with Generally expenditures in the same time frame.
Accepted Accounting Principles or GAAP,
which also requires knowledge of the Wetmore also declined to answer deposition
purposes of the expenditures. These are the questions based on his assertion of the
records that have not been provided. attorney/client privilege, despite that
privilege having been waived on behalf of
Also unknown is whether these major APF by Mr. Shelley. (APF had been Wetmore's
withdrawals were legitimate in light of the client. Under the law, a receiver acts for the
authorized purposes of the tax-exempt entity when it is ordered into receivership
entity and the expectations of the donors and can waive the attorney-client privilege.)
based on solicitations made to them, as well
as whether prosecution of criminal and/or Wetmore stated that he has "multiple
civil causes of action on behalf of APF would competing" attorney-client considerations
be justified. meaning that, as an attorney, he claims duties
of confidentiality to other entities he created
Taking the 5th, failure of recall and the or controlled and/or in which he had a
privilege: The first deposition of Basel, material interest. Even though he
described above, basically yielded personally funneled APF's money to those
obstruction and stated fears of criminal entities, he claimed he could not tell APF
liability, whether real, imagined or fabricated. anything about where its own money
Wetmore was deposed for 9 hours on April 3, went. In addition, he has failed to provide
2018. Rather than take the 5th, he claimed copies of the files he once maintained as
dozens of times not to remember key aspects APF's lawyer, a lawyer's fundamental duty.
of the events described above. He did not He says he gave them to Basel.
remember being a signer on the APF
accounts or why bank records designate him A court may evaluate Wetmore's assertions
as "CEO," even though he admitted it was his of privilege and memory loss. The State Bar
signature on the document next to that of Texas may be asked to review his potential
designation and on numerous large conflicts as a lawyer representing APF, at
withdrawals from the account. least two for-profit entities, himself, and
others, perhaps including Basel individually,
He did not remember withdrawing from all of whom shared in APF's money in one
APF's accounts two installments of $250,000 way or another. Potential inconsistencies
each within days of each other and one for between his pleadings and statements in
$170,000 a few weeks later--all over his open court could be subject to review by law
signature. Each time, the funds were enforcement, the courts and the Bar.
simultaneously transferred to a second entity
he controlled and for which he had "Dancing with the donors": The
established the bank account. He claimed not investigation also obtained information
to recall even though the events happened relevant to APF through Wetmore's
just prior to my request for APF's financial testimony in the 24-count federal criminal
records, which would have disclosed what trial of former U.S. Representative Steve
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Stockman, which showed that the ideas for In reality, his testimony hardly "assisted"
APF's attempted covert surveillance of the Stockman. Wetmore was a key (and hostile)
2015 Legislature actually grew out of a witness subpoenaed by the prosecution to
similar effort funded by Stockman in document his role in Stockman's illegal use of
2013. Wetmore testified that he had a fake funds by defrauding contributors to non-
intern inserted into State Representative profit charities controlled by Stockman and
James White's Capitol office. The using the money for Stockman's personal and
prosecutors showed that the motive was to political purposes. Wetmore's ugly demeanor
catch Rep. White doing something that would and unresponsiveness in court surely helped
help Stockman in the event Rep. White prosecutors convict his friend Stockman.
should run against him. Another person hired
by Wetmore followed Rep. White around Wetmore's Stockman testimony
Austin, producing a riveting report of Rep. foreshadowed his efforts to avoid
White patronizing a TCBY frozen yogurt providing evidence by repeatedly asserting
store, and yet a third person spied on him in the attorney-client privilege. When asked
his home district. Wetmore admitted that the during his federal grand jury testimony about
effort was a failure but testified at a check Stockman used to pay him, Wetmore
Stockman's trial that it "provided proof of asserted the privilege. After taking a break to
concept," foreshadowing the 2015 efforts. consult his lawyer, it's reported that he
returned to the grand jury and answered
Asked why over several months he kept questions about the check. It seemed as
sending glowing reports to Stockman though he had been advised that the privilege
about the failed surveillance of Rep. was not applicable. At trial, he again asserted
White, Wetmore testified: "You do a dance the privilege, so the prosecutor impeached
with the donors to keep the operation Wetmore's testimony by reading back his
going." In a nutshell, that cynical testimony grand jury testimony. This issue may also be
and the evidence show that the failed 2015 presented for resolution by a state court.
secret filming project achieved nothing but
keeping the "dance" with the donors going. Where are we now? Nearly three years
later, Basel and Wetmore have exhausted
Wetmore told the state court that he could almost every dilatory tactic to avoid
not attend a deposition scheduled for March disclosing what happened to hundreds of
19, 2018, because at that time he would be thousands of dollars of other peoples' money
"assisting the defense" in the Stockman trial. on which they got their hands. (See Page
But, Wetmore was questioned under oath by 12)
Stockman's attorneys and said he had not
met Stockman's lawyers and gave the Two federal courts ordered Basel to pay me
impression he had never communicated with $6700 and Wetmore was ordered by a state
them. This potential conflict between court to pay me $1288. Using a bizarre series
Wetmore's federal testimony and his of pleadings, Basel made two failed attempts
statements on the record in state court may to remove the case to federal court to avoid
also be evaluated, when the federal being jailed for contempt by the state court.
transcripts are available, to determine Basel accused two federal judges and the
whether any laws were broken. state court system of criminally conspiring
with me against him. Inexplicably, Basel's
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pleadings also claimed that the state's achieved anything. Examples of projects
child support system is unconstitutional, Wetmore claims APF worked on:
even though the case has nothing to do • A failed attempt to uncover voter fraud in
with child support and he's never been Colorado.
ordered to pay it. To make his case, he had • A trip to Arizona for a guy named Joe,
copied--verbatim--pleadings from some whose last name he could not recall.
"men's rights activists" who have tried to use • Something called the "Vorbeck" project,
the federal courts to avoid paying child which sought unsuccessfully to document
support. Two federal courts found his efforts "overcharging" by prosecutors in
frivolous and ordered Basel to pay the domestic violence cases involving the
attorneys fees I spent on chasing him out of victim being choked.
his hiding place. I placed a lien on his • An amicus brief about government abuse
property, which later was seized by a of open records laws, which was never
Williamson County constable as a result of a completed.
judgment against him in tangentially-related
litigation (See Page 8). During nine hours of testimony under oath,
Wetmore never cited specific examples of
For Wetmore's part, and to the benefit of anything he and Basel worked on that
this investigation, he failed on more than produced anything with any journalistic or
one occasion to do a workman like job as other value. All they did was "dance with
APF's lawyer and even today has refused to the donors to keep the operation going."
provide APF information that a lawyer owes
a duty to provide every former client. He The "second entity": Wetmore controlled
"fired" APF as a client because he said Basel the Texas Demography Project (the
was uncooperative, even though it turned out "Project"), the second entity discussed above,
Wetmore was a CEO of APF at the time, and established and controlled its bank
controlled its bank account and had access to account. The Project was chartered under
all its records. He's been sanctioned more the Texas Nonprofit Corporation Act but we
than $1200 for failing to show up at a have found no evidence that an
deposition he was ordered to attend by a application for tax-exempt status was ever
state district judge. And, he's claimed that he filed, much less any tax-exempt status
owes duties to other "clients" that "compete" being granted. Nor does it appear tax
with his duty to APF, which are conflicts of returns were filed by or for the Project. If
interest he created for himself and is now correct, these facts effectively make the
trying to use to avoid accounting for the Project a for-profit entity for tax purposes,
money he personally removed from APF's although its authorized functions under state
account and that of others. law--including its authority to make
payments to its officers, directors and others-
Failure, a consistent theme: Just as -may be limited by Subchapter B, Chapter 22,
Wetmore's testimony in the Stockman case Business Organizations Code ("Subchapter
showed the failure of his efforts in 2013 vis- B"), which places restrictions on non-profits
a-vis Rep. White, his deposition in the APF and their personnel.
case demonstrates that none of the efforts in
2014 through 2016 by Wetmore or Basel The Project did not live long by any measure;
for most of its life it existed only on paper.
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The Project was created June 26, 2014, and work for what Basel referred to as the Texas
ceased to exist November 10, 2015. It had no Demography Project.
money until January 9, 2015, and Wetmore C3 Strategies no longer exists, but at that
and Basel drained all its money by the end of time both Shafer and Basel did door-to-door
the spring of that same year. A Public work on behalf of political campaigns and
Information Report filed with the Texas causes. Although it was political campaign
Comptroller of Public Accounts showed season in August through early November
Wetmore as its only Director and its General of 2014, it is unknown whether the work
Counsel. Shafer was to perform involved campaign-
related activities, which would be
Little is known about the purpose(s) that improper to pay from a 501(c)(3)'s
were supposed to be served by the Project. money. Because it appears the Project had
What is known raises questions regarding no account of its own during this time, it is
whether the Project's activities squared with unknown by whom Shafer was being paid
APF's stated purposes and the intent of the and from what source of funds.
APF donors whose funds were rapidly
transferred into and then out of the Project, On January 20, 2015--11 days after Wetmore
on its way to Basel's company. No deposited $250,000 into the newly created
justification for transferring $670,000 Project account and two days before a second
from APF to the Project has been offered installment of $250,000 was deposited to the
by Basel or Wetmore despite multiple Project account--Wetmore suggested and
depositions, requests for information by Mr. obtained a written contract between Shafer
Shelley and court orders to disclose the and Basel to continue Shafer's work on the
information. Texas Demography Project. But, on February
27, 2015, Wetmore told Shafer that the Texas
Apparently, the major purpose of the Project Demography Project was ending; that Shafer
was to serve as a conduit for APF's money to should cease all work; and, that Shafer should
be sent to Wetmore and Basel because APF's submit bills to C3 for work previously
money is virtually all the money the performed.
Project ever had and that money remained
in its account only briefly. Basel/C3 stiffed Shafer for almost $70,000
owed under the contract, claiming as early
The tangential case: A Hays County lawsuit- as March 25, 2015, a lack of sufficient funds,
-Shafer v. Basel, 16-2113, 207th Judicial even though C3 was paid $100,000 in early
District-- sheds a little light on what the January from the Project's account and
Project started to do, but, combined with Wetmore had deposited a total of $670,000
banking records, the lawsuit shows that into the account of the Texas Demography
Wetmore and Basel ultimately undercut the Project by March 16. That money was
initial rationale for the Project, which ultimately paid to C3, Basel's for-profit
apparently was acted upon only briefly. company.

In August of 2014, under the name C3 Shafer prevailed in his suit against Basel and
Strategies ("C3"), Basel began doing placed a lien for more than $70,000 on
business with a man named Raz Shafer, who Basel's 83+ acres of Williamson County
was to perform "door-to-door" canvassing property. The judgment agreed with Shafer's
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contention that the property had been • Potential consequences facing Wetmore
acquired in mid-2016 by improperly and Basel for authorizing and carrying
transferring money in an attempt to hinder, out these transactions if they violated the
delay or defraud Shafer's collection of the tax laws and Subchapter B.
debt. Whether the APF money routed
through the Project to Basel was used to More information is needed to address each
acquire the Williamson County property of these questions. Can there be reasonable
has not been determined. explanations for all of these transactions?
Maybe, but to date neither Basel nor
$700,000 worth of questions: On January 9, Wetmore have provided those answers.
2015, Wetmore completed the papers to
establish the Project's bank account, What about the contributors? The critical
simultaneously transferred $250,000 of APF time period for purposes of the investigation
funds into the new account and immediately was late 2014 into the fall of 2015. Recall that
sent $100,000 of that money to Basel's C3 APF was essentially broke on August 31,
Strategies. 2014.

More deposits of APF;s money into Project In his first deposition, Wetmore testified that
accounts followed. some donors contributed to APF in return for
APF performing specified "projects," usually
On January 13, 2015, Wetmore withdrew involving one or more people conducting
$100,000 in cash from the Project account. surveillance in an attempt to capture
No receipts for the expenditure of this money embarrassing or even criminal conduct for
were provided. use against their "targets" and, he says, in
response to "tips."
On January 22, 2015, Wetmore transferred
$200,000 to C3 Strategies, Basel's firm, There is no evidence at this time that any
again without any documentation for how it of the donors knew of the sleazy tactics
was spent. Wetmore and Basel would employ or that
the donors intended to have the 2015
On March 16, 2015, Wetmore again legislative session disrupted.
transferred $250,000 to C3 Strategies
without any documentation. A variety of donors filled APF's coffers with
donations ranging from $670,000 down to
The events described in this report raise $25. The proportion of donations that came
serious questions about: from Texas depends on the actual identity of
the single largest contributor.
• Potential liability for federal taxes on
behalf of the Project, APF and others. • The single largest contributor was the
• Intentionally skirting the tax laws by National Christian Foundation South
routing money through an entity for Florida ("NCF"), which made two
which tax deductions are allowed to an contributions totaling $920,000, one for
entity for which deductions are not $670,000 on October 31, 2014, and the
allowed, if that is what happened. other for $250,000 on November 13,
2014. NCF is a long-established and
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reputable 501(c)(3) tax-exempt The identity of the actual donor(s) of
foundation. It is a "donor-advised fund," the $670,000 and $250,000
of which there are many in the U.S. Here contributions that flowed through NCF
is how the I.R.S. describes donor-advised to APF is/are unknown at this time. If
funds: the donor(s) resides in Texas, the vast
majority of APF's money came from in-
"Generally, a donor-advised state sources. If not, a relatively small
fund is a separately identified percentage of the money came from
fund or account that is Texans.
maintained and operated by a
section 501(c)(3) organization, Also unknown are:
which is called a sponsoring
organization. Each account is 1. Whether APF pitched or committed to
composed of contributions the original donor(s) or NCF to
made by individual donors. perform a specific project or projects.
Once the donor makes the 2. Whether specific people/projects
contribution, the organization were targeted at the request of the
has legal control over it. original donor(s) or NCF in return for
However, the donor, or the the contribution(s).
donor's representative, 3. Whether the original donors obtained
retains advisory privileges a tax deduction by contributing to NCF
with respect to the while intending that their money
distribution of funds and the would be passed through APF to an
investment of assets in the entity whose activities would not be
account." [Emphasis added] eligible for the tax deduction.

So, as a donor-advised fund, NCF An informant who claims to know
effectively acts a pass-through vehicle: stated that some wealthy Texas
Donor A contributes to NCF and receives conservative political activists make
a tax deduction. NCF then passes on contributions through NCF. Whether
contributions to one or more other that is true and whether one or more of
organizations that are eligible for tax- those persons made the contributions
deductible contributions based on Donor above are unknown.
A's exercise of "advisory privileges."
Wetmore was also deposed about
The original donors are not publicly contracts he prepared for APF and never
disclosed, which is one reason donors use mentioned any contracts that would have
these pass-through vehicles. However, the involved these funds, such as having APF
recipients of the money passed through or the Project perform specific activities,
NCF are disclosed in NCF's publicly- as Wetmore testified sometimes was the
available Form 990s. NCF's Form 990s case with other donors.
have run as many as 17,000 pages (NCF's
payments to APF were disclosed there) and The timing of the $670,000 contribution
at one time NCF had $1.6 billion in assets. and the rapid withdrawals by Wetmore
led to the conclusion that the money
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Wetmore passed on to the Texas any connection to the payments above are
Demography Project essentially came unknown at this time.
from that money. It is probable that the
Project could not have accepted the NCF 6. AgendaWise of Austin, Texas, paid
contributions directly without $13,936 on June 4, 2015. This odd
threatening the tax-deductibility of the amount is likely a payment or
original contributions to NCF because the reimbursement of an expenditure
Project was not a 501(c)(3). Resolution incurred by APF. AgendaWise was
of this question may turn on how the started as part of Midland, Texas, oilman
money was actually used. Tim Dunn's coterie of far-right non-
profits working to influence Texas public
We know the Project's money (about policy and campaigns.
$670,000) flowed to Basel's firm, C3
Strategies, which, as a for-profit entity, 7. MAC Research, Inc. of Washington, D.C.,
likely could not have taken a contribution delivered $10,000 dated October 19,
directly from NCF, either. We also know 2015.
that the money was transferred by
Wetmore from the Project's account 8. Wallace, Jordan, Ratliff & Brandt, LLC, a
but we do not know at this time the status Birmingham, Alabama, law firm sent
of any tax liability the transfers may have $10,000 dated January 5, 2015.
entailed.
9. Donald "Brent" Goleman wrote a check
4. Central Transport, LLC, of Warren, to C3 dated January 15, 2015, for $9,999,
Michigan, paid $26,250 on September 19, which was nevertheless deposited to
2014. The company is affiliated with APF's account.
Detroit International Bridge, which had
paid $60,000 earlier in 2014. Both are Wetmore continues to hide what happened
owned by Manuel Moroun, who operates to the money. I have asked the District Court
an international crossing between to force him to answer the questions he has
Michigan and Canada and once sought to refused to answer based on attorney-client
block Michigan Governor Rick Snyder's privilege. In response, Wetmore filed an
efforts to have a new Detroit River bridge "anti-SLAPP" motion under Chapter 27 of the
constructed to Canada. Civil Practices and Remedies Code. His
motion was dismissed. He has appealed to
5. Online for Life, Inc., of Frisco, Texas, the Third Court of Appeals. Next week, I will
made four payments totaling $70,000 in file a reply brief in which it will be shown
2015 (two for $20,000 each on March 6 that Chapter 27 does not apply to post-
and April 28; one for $15,000 on July 10; judgment discovery and cannot apply
and one for $15,000 on August 24). A because the Legislature cannot impede the
second informant identified wealthy courts from enforcing their own judgments.
Texas conservative political activist(s) When Wetmore's appeal is finally disposed
as being a supporter(s) of this of, he'll once again be facing accountability.
organization. Whether that is true and
whether the person(s) influenced or had Conclusion: This report is preliminary. The
facts reported herein are as known as of the
Steve Bresnen is solely responsible for the contents of this report. 11
Rev. 11.11.18 Preliminary Report

date of the report and could change as more Absent a reasonable explanation by Basel
information is gathered, including and/or Wetmore, the tools available to
explanations and evidence of the major law enforcement may be needed to get to
transactions documented in court, banking the whole truth.
and other records.
And, that is what we know--at this time.
Continued investigation may be needed to
determine whether one or more persons:

• Committed civil or criminal fraud or,
stated simply, stole donor(s) money;
• Breached their legal duties to one or more
entities; and/or
• Violated federal tax laws.

At the investigation's outset, Basel and
Wetmore stated that their motivation was to
protect APF's donors. As it turns out, their
efforts have served only to cloak what they
did with more than $670,000 of those
donors' money. And, the donors they sought
to "protect" may have been duped about the
purposes for which their money would
ultimately be used.

No criticism of any donor is contained in
this report, other than that it seems clear
that some of them were too easily
separated from their money.

The investigation has yet to come up with
any reasonable explanation for why Basel
and Wetmore went to such lengths to
transfer APF's money through multiple
entities, perhaps in an attempt to get it to one
or more persons, some of whom may remain
unknown and some of whom appear to have
been Basel and Wetmore themselves. The
similarities between the evidence developed
in the investigation and that introduced by
federal prosecutors to obtain nearly two-
dozen convictions in the Stockman case is
striking. Whether that comparison holds true
remains to be seen.

Steve Bresnen is solely responsible for the contents of this report. 12