Sunday, December 10, 2017
Politics

Long before Trump hired him, Steve Bannon was making deals and kindling political fires in Florida

SARASOTA — Steady weekend visits to the "Winter White House" in Palm Beach have solidified President Donald Trump's status as a Floridian. But it's not just Trump who is adding a new dimension to the state's storied political history.

Chief adviser Steve Bannon — the rumpled former executive of Breitbart News, revered as a brilliant strategist and reviled as a xenophobic champion of the extreme right — was shopping for a home in Sarasota last year before Trump enlisted him to fix the campaign.

Bannon, 63, surfaced in Sarasota more than a decade earlier for the most unlikeliest of reasons: nasal spray.

He was part of a team formed to guide a startup named SinoFresh. But the deal got bogged down in lawsuits, the inventor ejecting Bannon from the board. Years later, Bannon formed a film company in Sarasota that made an effusive documentary about Sarah Palin. He set up a research outfit in Tallahassee that churned out investigations on Hillary Clinton and, along with Breitbart News, went after two of Florida's top Republicans, former Gov. Jeb Bush and Sen. Marco Rubio.

Bannon also rented a home in Miami and registered to vote there in 2014 before switching his registration to Sarasota last August. A former wife has lived in Florida, and Bannon lent his support as she dealt with drug and alcohol issues.

Still, the Florida footprint of one of the most powerful men in the country is sprinkled with mystery. When Bannon's voter registration was discovered last year, the collective reaction was: Really?

Bannon has no visibility in Florida political circles, with many of the GOP regulars having little use for the Breitbart wing. The handful of people who could fill in key details refused to talk — underscoring how polarizing a figure he has become.

"You are certainly aware of the well-publicized demonstrations and threats that are being made now daily by individuals and groups against Steve Bannon," wrote a lawyer for one of Bannon's business associates, Andy Badolato, a venture capitalist in Sarasota County. "Unlike Mr. Bannon, my client does not have access to Secret Service or other police protection should your article inevitably turn those protesters on him and his family."

• • •

Around 2002, Badolato showed up at the Venice office of SinoFresh to pitch chemist Charles Fust, whose nasal spray was garnering reviews as an effective over-the-counter treatment for chronic sinusitis.

"He caught us at an ideal time," Fust said in an interview, explaining that the company, which had successfully test-marketed in Eckerd drugstores in Pinellas County, planned to go national and needed financing for a branding campaign that was to enlist radio personalities such as Rush Limbaugh.

To Fust, Badolato seemed the image of success, with a big boat and nice home on Casey Key. Badolato brought on board his friend Bannon — it's unclear when they met — and Seattle lawyer David Otto, who had experience with taking small companies public. Bannon and Otto were installed on the SinoFresh board and prepared the public offering.

At the time, the Harvard Business School-educated Bannon was known in Hollywood circles, not political, having parlayed a stint at Goldman Sachs into a boutique investment bank focused on media and entertainment. One of his first deals was a 1991 Sean Penn film, The Indian Runner, which flopped. Two years later, Bannon struck it big by acquiring a cut of Seinfeld royalties in a deal to sell show producer Castle Rock Entertainment.

"I was impressed," Fust said. "He was a very smart guy, very quick. He's a good strategist."

He said Bannon had a temper, once unloading on a partner during a conference call. "He tore into him something merciless. I felt sorry for the guy. Steve was a little bit out of control."

Overall, Fust respected Bannon, who would often fly from California to New York for meetings. One time Fust met Bannon for breakfast at a Manhattan hotel and found him chatting warmly with Al Sharpton. "Until the lawsuit was filed," Fust said, "I had a great relationship with him."

Fust had grown suspicious of Badolato after finding red flags in court records and hearing about unauthorized sales of SinoFresh stock — concerns he took to Bannon and Otto. "Initially, they expressed surprise and alarm, but then within probably 36 hours I had a lawsuit against me," Fust said.

The February 2004 suit, which named Bannon and Otto as plaintiffs, accused Fust of misusing company funds, including buying his fianceé a wedding ring. Fust moved to remove Bannon and Otto from the board, feeling they were too close to Badolato. He denies any wrongdoing.

On the first day of trading after the lawsuit became public, over-the-counter shares of SinoFresh fell 30 percent. Fust felt vindicated when a court-appointed expert largely sided with him, but the toll was devastating. Investors steered clear. Legal bills soared past $1 million. The national branding push sputtered. Retailers withdrew.

"I watched it go from $13 a share down to pennies," lamented Bill Wilferth, a pharmacist who advised SinoFresh. "It was a miracle drug. I had people call up crying because they were so happy about it. It should have been like Mucinex."

Fust personally held more than 8 million shares and is no longer associated with the product, now found only online. He blames Badolato, who he said recently called to urge him not to talk with the Tampa Bay Times. He questions why Bannon and Otto did not take the Badolato concerns seriously. "It destroyed the company," Fust said.

Numerous attempts to reach Bannon, directly and through associates, were unsuccessful. Otto, in an interview, acknowledged Badolato's mixed history, though he described Fust as suffering from "delusions of early stage business owners. They tend to view that early success as a function of their doing as opposed to a number of factors."

Fust and Otto had similar observations about Bannon: He was not overtly political and exhibited none of the dark, ideological views critics now attribute to him.

"I didn't even know he was involved in politics," Fust said. "He's got a presence about him, so I'm not surprised he's at the level he's at. It's just a side of him I know nothing about."

Otto is surprised Bannon hasn't spoken out more as he's been branded an anti-Semite and white supremacist due to his role at Breitbart News.

"He was a big Reagan fan," Otto said. "He thought he represented politically where this country needed to be." But, he said, "it wasn't anything like this Breitbart stuff."

• • •

At the same time Bannon was involved in SinoFresh, he was making a documentary about the former president, a project that would prove pivotal in Bannon's life. Released in October 2004, In the Face of Evil painted Ronald Reagan as the ultimate warrior against communism. During a screening in Beverly Hills, Calif., Bannon recalled in a 2015 interview with Bloomberg Politics, "out of the crowd comes this, like, bear who's squeezing me like my head's going to blow up and saying how we've gotta take back the culture." It was Andrew Breit­bart.

Breitbart launched his website in 2007, and Bannon took a seat on the board, helping line up financing, including a $10 million investment in 2011 from the Mercer family of New York. Robert Mercer is a hedge fund billionaire who, along with his daughter, Rebekah, has become one of the biggest sponsors of conservative causes and politicians.

Bannon would soon turn his attention back to Florida.

Using Badolato's Sarasota office address, he set up Victory Film Group, which in 2011 produced the documentary about Palin, The Undefeated. Bannon adored her as an outsider who took on the establishment, a Reagan in tea party times.

In March 2012, Breitbart died of a heart attack and Bannon took over the website, giving it a more aggressive tone. A month later, he established the Government Accountability Institute, a nonprofit research group based in Tallahassee whose mission is "to investigate and expose crony capitalism, misuse of taxpayer monies and other governmental corruption or malfeasance."

With millions in funding from the Mercers (Rebekah served on the board at one point) and a group tied to Charles and David Koch, GAI is overseen by a conservative writer named Peter Schweizer, who wrote a book on Reagan that was the basis for Bannon's 2004 film and lives in Tallahassee. Employing a team of researchers, GAI became a factory of material against Bill and Hillary Clinton and other political figures, including Jeb Bush. One report reads, "Follow the Money: How the Department of Justice Funds Progressive Activists."

Research was shopped to news outlets. "We don't look at the mainstream media as enemies because we don't want our work to be trapped in the conservative ecosystem," a GAI official told Bloomberg in 2015. Schweizer turned the Hillary Clinton material into a book, Clinton Cash, that helped perpetuate the perception she is corrupt.

IRS records show GAI bought advertising at Breitbart News, $102,500 alone in 2013, and that Schweizer, Bannon and others were paid for their work at the nonprofit. From 2012-2015, Bannon received a total of $376,000 for what the organization said was 30 hours of work a week. Schweizer got $778,000.

"It's unclear how Bannon could work three-quarter time at GAI while simultaneously running Breitbart, which was a full-time or full-time-plus position," said Michael Wyland, an expert with The Nonprofit Quarterly. "It raises eyebrows. Not only is someone pulling money from a nonprofit they started but also claiming 30 hours a week while holding down at least one other full-time job."

Schweizer and others connected to the group did not return multiple requests for comment, and a Times reporter who visited the GAI headquarters found a locked door.

Breitbart News flourished under Bannon with incendiary reports on immigration and race that attracted huge readership. It created sites in California and Texas, as well as London.

Brian Burgess, a former spokesman for Florida Gov. Rick Scott, said he contacted Bannon to ask when he was going to launch Breitbart Florida. "Within minutes, he emailed me back and said, 'Hey, let's talk about it,' " Burgess recalled. "He strikes me as incredibly high energy." Burgess interviewed, but the project never materialized.

As the 2016 campaign began, Breitbart News emerged as decidedly pro-Trump. Republicans, including Rubio, were excoriated as the establishment, creatures of the "swamp" Trump vowed to drain.

"We're going to be relentless on Rubio," Bannon promised the Daily Beast in March 2016. "Every time he opens his mouth he virtually has a misrepresentation, and if Fox is not going to hold him accountable, and the rest of the Republican media establishment who depends on Fox, if they're not going to correct him, then we're going to be guardians of truth. … Trust me, brother, we're coming. We're not backing off."

At the time, the Mercers were backing Texas Sen. Ted Cruz in the presidential race, but they came around when Trump secured the nomination. Rebekah Mercer cornered the candidate at a Hamptons fundraiser in August and urged him to right his weakening campaign with Bannon. Trump made Bannon the campaign's chief executive.

"If you were looking for a tone or pivot, Bannon will pivot you in a dark, racist and divisive direction. It'll be a nationalist, hateful campaign," Florida GOP consultant Rick Wilson, who was working with independent presidential candidate Evan McMullin, told the Washington Post at the time. "Republicans should run away."

As Trump headed into the general election, Bannon drew increasing scrutiny that would lead to Florida. In August, it was revealed he had registered to vote in Miami in 2014, though he never did, and when reporters showed up, the home was abandoned. Miami-Dade County prosecutors investigated Bannon's registration in late August, though nothing appeared to come of their review.

So why was he there? Was he even there?

Some reports suggest Bannon's ex-wife, Diane Clohesy, lived at the Coconut Grove home at some point. A Miami New Times article described how she had problems with drug and alcohol abuse and quoted her brother as praising Bannon for his help. At the same time, a conservative activist named A.J. Delgado, who advised the Trump campaign, issued a statement that she had visited with Bannon at the home and insisted he lived there. Delgado did not return phone calls seeking comment.

As the Miami news was breaking, Bannon shifted his voter registration to Sarasota, records show, using Badolato's home as his address. Over the years, Badolato and Bannon maintained business ties and Badolato made small contributions to Breitbart News. Bannon was shopping for a home in the area and had moved belongings to a storage space. The lack of a state income tax could have proven attractive.

Bannon filed his registration papers on Aug. 19 — two days after Trump tapped him as the campaign CEO. But last fall, he voted in New York City, leading to more news reports after Trump complained of mass voter fraud and pointed to people registered in two states. It's only a crime, however, to vote in both places.

Now a national figure, Bannon's Florida roots are coming into view.

"We're hoping to get him here for a dinner," said state Rep. Joe Gruters, R-Sarasota, who worked on the Trump campaign. "He's one of the most powerful men in the country and people would love to see him. The only thing is he's so busy."

Times researcher John Martin, Tallahassee bureau chief Steve Bousquet and Times/Herald staff writer Patricia Mazzei contributed to this report. Contact Alex Leary at [email protected] Follow @learyreports. Contact Adam C. Smith at [email protected] Follow @adamsmithtimes.

     
       
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