Watchdog alleges Canadian hedge fund gave illegal contributions to DeSantis campaign

MIAMI — An election watchdog organization has filed a second complaint against Gov. Ron DeSantis' political campaign, alleging a Canadian hedge fund made more than $167,000 in illegal contributions to his operation.

The nonpartisan, Washington, D.C.-based Campaign Legal Center is asking the Federal Election Commission to investigate Toronto-based ECN Capital Corporation for violating federal campaign finance laws that prohibit contributions from foreign nationals and foreign corporations.

The Federal Election Campaign Act prohibits the contributions to U.S. elections and also bans foreign nationals from participating in any decision-making process with regard to making a political contribution.

"These broad prohibitions have for decades served to protect our elections from foreign influence, helping ensure that the electoral process and our elected officials serve U.S. interests, not the interests of any foreign entity or government,'' the complaint states.

Campaign reports filed with the Florida Secretary of State's office show that ECN Capital gave more than $53,000 in contributions to DeSantis and his political committee, Friends of Ron Desantis, in 2022, including $28,506 in in-kind donations to DeSantis and his political committee, which was disclosed only as "transportation." The company reports managing a portfolio of rail and aviation assets. And in 2018, the company gave $50,000 to the Florida Democratic Party, listing as its address a P.O. box in Toronto.

The reports also show that between 2018 and 2022, ECN Capital's U.S. subsidiaries gave a total of $112,000 to DeSantis and his political committee, Friends of Ron DeSantis, which reported receiving over $225 million in total between its formation in January 2018 and its termination in May 2023. The subsidiaries also gave $10,600 to the political committee of Republican U.S. Sen. Rick Scott in 2020, disclosure reports show.

The Campaign Legal Center last month filed its first complaint against the DeSantis campaign, asking the FEC to investigate what it alleges was an illegal transfer of $82.5 million in "soft money" — money that isn't subject to federal campaign finance laws — to the federal super PAC supporting his 2024 presidential campaign, Never Back Down.

"The recent, unprecedented rise of 'soft money' in federal elections undermines the crucial campaign finance laws that exist to uphold transparency, combat corruption and safeguard the electoral process," said Saurav Ghosh, director of federal campaign finance reform at Campaign Legal Center. "As this complaint shows, foreign money may already be influencing the 2024 presidential election, which obviously undermines voters' ability to trust that the electoral process and their government are truly serving their interests."

While ECN Capital is based on Toronto, it lists its U.S. office in West Palm Beach. An affiliated company, Triad Financial Services, is headquartered in Jacksonville. ECN Capital specializes in financing for manufactured homes, boats and recreational vehicles. CLC alleges that the subsidiaries "appear to have no public presence or activities" and ECN Capital has represented in a federal court filing that it and one of its subsidiaries, ECN Holdings, "are effectively managed jointly, by some of the same leadership."

According to the South Florida Business Journal, Steven K. Hudson, the CEO of ECN Capital Corp., sold his Palm Beach townhouse for $26.66 million earlier this year.

It is not known whether the company does any business with the state of Florida. Neither ECN Capital Corp., nor the DeSantis campaign responded to requests for comment.

The FEC has been reluctant to enforce many of the campaign law violations CLC has alleged in recent years, but in 2022 it issued a record-breaking fine against against Canadian billionaire Barry Zekelman and his associated steel companies, after concluding that Zekelman illegally funneled $1.75 million to America First Action (AFA), a super PAC aligned with former President Donald Trump.

"As the sole government agency tasked with enforcing federal campaign finance law, enforcing the prohibitions against foreign influence are an important part of the FEC's mission,'' the CLC said in a statement on Tuesday.