Steve Bannon, then White House chief strategist, and Donald Trump, Kenosha, Wisconsin, April 18, 2017 (Saul Loeb/AFP/Getty)

Donald Trump runs for cover after his former campaign manager and chief strategist, Steve Bannon, is indicted on fraud and money laundering charges.

Bannon and three associates were arrested on Thursday over their private fund-raising effort, We Build The Wall, in support of Trump’s dream project of a Wall with Mexico. They were charged with diverting the donations, more than $25 million for their private use.

The other defendants are Brian Kolfage, a wounded Iraq War veteran, the lead name on the GoFundMe effort; Bannon’s close friend, Florida venture capitalist Andrew Badolato; and Timothy Shea, who put the money through a shell company.

Audrey Strauss, the Acting US Attorney for the Southern District of New York, said in a statement:

The defendants defrauded hundreds of thousands of donors, capitalizing on their interest in funding a border wall to raise millions of dollars, under the false pretense that all of that money would be spent on construction.

While repeatedly assuring donors that Brian Kolfage, the founder and public face of We Build the Wall, would not be paid a cent, the defendants secretly schemed to pass hundreds of thousands of dollars to Kolfage, which he used to fund his lavish lifestyle.

Bannon was arrested at 7:15 a.m. on a $35 million, 150-foot yacht belonging to one of his business associates, the fugitive Chinese billionaire Guo Wengui. Special agents and federal postal inspectors boarded the yacht off Westbrook, Connecticut, as Bannon was drinking coffee and reading a book.

Bannon was one of the most powerful men around Trump. He took over as campaign manager in August 2016, after Paul Manafort — now serving 7 1/2 years in prison — left over his financial misconduct.

When Trump entered the White House, Bannon pursued his white nationalist agenda as chief strategist. He was the driving force behind policies such as the Muslim Ban on entry into the US, and on the anti-immigration message that included the proposed 30-foot high Wall along the US-Mexico border.

He left the White House in August 2017, after falling out with other advisors who reportedly included Trump’s daughter Ivanka and son-in-law Jared Kushner. But he continued to work informally with the Trump camp. The cooperation included an effort from summer 2018 to install Boris Johnson — a long-time ally over Britain’s Brexit departure from the European Union — as UK Prime Minister.

See also VideoCast: Donald Trump, Steve Bannon, and the Plan to Break Up Europe — Chapter 2

Bannon is the seventh Trump associate charged with federal crimes, joining Manafort; Michael Flynn, the former National Security Adviser; Michael Cohen, Trump’s long-time lawyer and fixer; and Roger Stone, a key figure in the Trump-Russia scandal whose 4 1/2-year sentence was commuted by Trump last month.

Bannon, who rose to prominence as the chief officer of the hard-right attack site Breitbart, faces up to 20 years each on charges of wire fraud conspiracy and money laundering conspiracy. He pleaded not guilty on Thursday afternoon and was released on a $5 million bond, backed by $1.75 million in cash and/or property.

Trump Disowns His Former Right-Hand Man: Who? What?

Trump immediately disowned Bannon, “I feel very badly. I haven’t been dealing with him for a very long period of time.”

He then tried the falsehood, “I don’t know anything about the project at all. I thought it was being done for showboating reasons.”

White House Press Secretary Kayleigh McEnany gave cover with the assertion that Trump disagreed” with efforts to build the wall privately.

But the Trump camp embraced We Build The Wall soon after it was announced in December 2018. Kris Kobach, a Trump ally who was the chair of the White House’s advisory commission on elections in 2017, was listed as general counsel for the project. He said in January 2019 that the initiative had Trump’s “blessing”.

That month Donald Trump Jr. appeared alongside Brian Kolfage and effusively praised the “pretty amazing” example of “private enterprise at its finest” for an “important grassroots issue”.

And Donald Trump personally and repeatedly urged the Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, which was purportedly helping We Build The Wall build a section of the barrier with Mexico.

White House Press Secretary Sarah Huckabee Sanders said of Trump’s backing of Tommy Fisher, a GOP donor:

The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals. He wants to make sure we get the job done under budget and ahead of schedule.

In June, Trump fired the US Attorney for Southern New York, Geoffrey Berman, raising suspicions that he and Attorney General William Barr are trying to block prosecutions of Trump, his businesses, and his allies.

See also Trying to Block Investigations, Trump Fires US Attorney in New York

$100,000s for Personal Use

Kolfage promised, on the GoFundMe page, that he would “not take a penny in salary or compensation” from donations. Bannon described We Build the Wall as a “volunteer organization”.

But, according to Thursday’s indictment, Kolfage secretly spent more than $350,000 on home renovations, boat payments, a luxury sports utility vehicle, a golf cart, jewelry and cosmetic surgery for his partner.

Bannon, working through an unnamed nonprofit organization, received more than $1 million. He used the money to pay hundreds of thousands of dollars in personal expenses.

Prosecutors cited questions “about Mr. Kolfage’s background” and the viability of promises to build the Wall. GoFundMe warned Kolfage that if he did not find a “legitimate nonprofit organization” to handle the money, it would returned to the donors.

Kolfage subsequently claimed that the group had determined that only $800,000 of the funds needed to be returned.

But on Wednesday, Kolfage suddenly announced he was closing the GoFundMe page. He cited GoFundMe pages supporting Black Lives Matter.

Asked by Bannon, “How do people get access to We Build the Wall?”, Kolfage directed potential donors to his webpage: “Don’t go to GoFundMe anymore,” Mr. Kolfage replied. “Screw them. Go straight to our website.”