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
Texas Legislature and some lobbyists and
their clients before and during the 2015
legislative session brought APF to public
attention when that surveillance became
harassment. But, the investigation shows
that the sums of money that flowed through
APF far exceeded the relatively small
amounts spent on its "secret" legislative
filming project, the roots of which extended
back to 2013.
Two principal actors controlled APF: Joe
Basel and Ben Wetmore. Basel may have
obtained the contributions, but Wetmore
moved the vast majority of the money around
at the times relevant to this report. APF was
chartered under the Texas Nonprofit
Corporation Act and granted federal
501(c)(3) status, making contributions to it
tax-deductible and its income tax-exempt. On
August 31, 2014, tax and banking records
show, APF's sole asset was a bank account
holding just $1744.
Then, in a two-week period straddling
October and November 2014, APF deposited
$920,000 from what appears to have been a
single source, including one contribution of
$670,000 and another for $250,000 (See
Pages 9-10). Within weeks, $670,000 was
withdrawn from APF by Wetmore in three
rapid installments. The money was deposited
into an account created by Wetmore for a
second entity he controlled (See Page 7),
which bank records show never had any
money except what was taken from APF by
Wetmore.
$100,000 of the money Wetmore moved from
APF's account to the second entity was
Steve Bresnen is solely responsible for the contents of this report.
forwarded that same day to a for-profit entity
owned by Basel, for which Wetmore was
Vice-President and General Counsel. Just
four days later, Wetmore withdrew
$100,000--in cash--from the second entity's
account for purposes for which there has
been no accounting. Nine days later,
Wetmore moved $200,000 from the second
entity into the account of Joe Basel's company.
A few weeks later, on the day the last
installment of APF money was received by
the second entity, Wetmore withdrew all but
$20,000 from its account and paid out
$250,000, again to Joe Basel's company. (See
Page 9)
Wetmore refused to identify who owned
Basel's company, even though Wetmore
claimed to be its General Counsel, and claims
not to recall any of these major
transactions, even while acknowledging
his signatures on the documents.
The second entity was soon out of money and
was subsequently dissolved, as was Basel's
company.
Ostensibly, Wetmore and Basel fought
disclosure of their activities to "protect the
Foundation's donors," but their resistance
was really about hiding how they
disposed of a very large sum of the
donors' money after routing it through
multiple entities one or both of them
controlled.
Why they did this is not completely
understood--at this time.
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Rev. 11.11.18 Preliminary Report
The Investigation
The information reported here resulted from
the activities of five lawyers and their
support staffs with long experience regarding
the governance and operation of non-profit
charities, research using public records and
basic discovery techniques, and civil and
criminal litigation. This Preliminary Report
was compiled by me and I am solely
responsible for its contents.
Information was gathered from:
• Texas Secretary of State records
• Records gathered from other states
• Internal Revenue Service materials
• State and federal court documents from
multiple jurisdictions
• County assumed name and property
records
• Basic legal research sources
• Common web-based sources
• Mainstream and non-mainstream media
• Depositions
• Subpoenas
• Banking records
• Social media
• Informants
How did the investigation start and
proceed? During the spring of 2015, then-
Houston Chronicle reporters Lauren
McGaughy and David Saleh Rauf, produced
several articles about APF, including an
interview with Basel and his wife, Hannah
Giles. McGaughy and Rauf reported about
several individuals who had either
contributed to APF or arranged for others to
do so. On the record, those named
individuals stated that they were unhappy
about APF's use of donated money, had cut
off further contributions and, in at least one
case, asked for money to be returned.
Steve Bresnen is solely responsible for the contents of this report.
In addition, APF's website solicited funds for
programs to train "citizen journalists." But,
no such activities had occurred recently
according to the site; so-called student
testimonials were outdated; and, no one
associated with APF appeared to have
credentials that would justify holding
themselves out as qualified to train
journalists. This would be especially true if
APF charged for taking the extensive list of
courses they were advertising, assuming APF
did not hold a license to sell such courses. It
is unknown whether APF ever charged for its
classes or if any classes were actually
conducted.
During the 2015 legislative session, Amy
Bresnen and I briefly ran afoul of and
identified some of the individuals associated
with APF's activities. These out-of-towners'
presence in Austin raised further disparities
between APF's website solicitations and its
actual activities.
On May 26, 2015, I hand-delivered a request
to Basel and Wetmore--as they sat in the
House Gallery--to review the financial
records that APF is required to maintain and
make public under the Texas Business
Organizations Code. This longstanding law
protects members of the public who are
solicited for money by such entities, which
are intended to serve public purposes. It
applies only to non-profits that have no
members. That is because a non-profit that
does have members is required to disclose its
finances to its members and the law gives
those members the right to police the
organization's practices. Failure to
maintain proper financial records and
make the records public is a Class B
misdemeanor.
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Rev. 11.11.18 Preliminary Report
Basel and Wetmore declined to provide the
documents, and may not have even
maintained them, as required by law. In June
of 2015, Austin attorney Anatole Barnstone
filed suit on my behalf in Travis County
District Court seeking a Writ of Mandamus
directing APF and Basel, its Custodian of
Records, to provide access to APF's financial
records. Wetmore initially acted as APF's
attorney in the suit and instituted a series of
dilatory tactics in an attempt to avoid
compliance. The process injected delay but
the courts overruled every such tactic and I
was awarded a final judgment. Post-
judgment discovery under the Texas Rules of
Civil Procedure ensued.
Before the judgment, in a deposition under
oath, more than 80 times Basel refused to
answer, citing his 5th Amendment
constitutional right not to incriminate
himself. He claimed not to understand
fundamental questions about APF's money,
despite having a degree in finance, and
denied having basic knowledge of the
organization, including claiming that he could
not identify the APF president, officers or
bookkeeper. He told multiple judges he did
not know where the records were, after
"searching" in two storage rooms from which
he had been locked out because he had not
paid the rent. In addition, the evidence
showed that federal tax returns had not been
filed in recent years.
Receiver appointed: Against this backdrop
of APF in chaos and run by apparent
scofflaws, the Court appointed a receiver to
take control of APF. The Court appointed
Dan Shelley of Austin, an attorney with
substantial experience with non-profits. Mr.
Shelley is a former State Senator and State
Representative from Harris County and
served as a high-ranking aide to two former
Governors. Mr. Shelley was directed to gather
Steve Bresnen is solely responsible for the contents of this report.
the information needed to satisfy APF's
obligations to disclose its finances, file tax
returns, determine whether it had potential
claims against any third parties and wind it
up.
The Court authorized Austin attorney
Stephen Fenoglio to represent Mr. Shelley.
Mr. Fenoglio has vast experience with non-
profit organization law. He had briefly served
as co-counsel to Mr. Barnstone. Mr. Fenoglio
promptly initiated basic techniques used for
discovery in civil litigation.
Since his appointment, Mr. Shelley has filed
periodic updates with the Court, which are
public records. (Parts of this Preliminary
Report draw on Mr. Shelley's official updates
filed with the Court.) In each, he has
documented efforts to obtain information
about specific transactions from Basel and
Wetmore, particularly those that are
necessary to complete tax returns for 2014,
2015 and 2016. For example, he documented
Basel's and Wetmore's repeated refusal to
provide that information or document more
than $100,000 in expenses for which they
claimed "reimbursement" from APF. Mr.
Shelley also agreed to comply with the final
judgment awarded to me--and has to the
extent possible at this time.
Subpoenaed bank records have provided
much information about deposits and
withdrawals, as have payroll records.
However, the purposes for key major
withdrawals remain unknown. I.R.S.
regulations require a non-profit's tax return
(known as a "Form 990") to show
expenditures in categories and disclose
payments to individuals related to the entity.
To comply with federal law, the Receiver
must know the reasons for an expenditure
or withdrawal. In addition, APF is obligated
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Rev. 11.11.18 Preliminary Report
by Court order to provide me with the
financial records required by the Business
Organizations Code. Those records must be
in a form that complies with Generally
Accepted Accounting Principles or GAAP,
which also requires knowledge of the
purposes of the expenditures. These are the
records that have not been provided.
Also unknown is whether these major
withdrawals were legitimate in light of the
authorized purposes of the tax-exempt
entity and the expectations of the donors
based on solicitations made to them, as well
as whether prosecution of criminal and/or
civil causes of action on behalf of APF would
be justified.
Taking the 5th, failure of recall and the
privilege: The first deposition of Basel,
described above, basically yielded
obstruction and stated fears of criminal
liability, whether real, imagined or fabricated.
Wetmore was deposed for 9 hours on April 3,
2018. Rather than take the 5th, he claimed
dozens of times not to remember key aspects
of the events described above. He did not
remember being a signer on the APF
accounts or why bank records designate him
as "CEO," even though he admitted it was his
signature on the document next to that
designation and on numerous large
withdrawals from the account.
He did not remember withdrawing from
APF's accounts two installments of $250,000
each within days of each other and one for
$170,000 a few weeks later--all over his
signature. Each time, the funds were
simultaneously transferred to a second entity
he controlled and for which he had
established the bank account. He claimed not
to recall even though the events happened
just prior to my request for APF's financial
records, which would have disclosed what
Steve Bresnen is solely responsible for the contents of this report.
were then recent transactions. That is, if he
or Basel had complied. However, Wetmore
"remembered" in some detail smaller
expenditures in the same time frame.
Wetmore also declined to answer deposition
questions based on his assertion of the
attorney/client privilege, despite that
privilege having been waived on behalf of
APF by Mr. Shelley. (APF had been Wetmore's
client. Under the law, a receiver acts for the
entity when it is ordered into receivership
and can waive the attorney-client privilege.)
Wetmore stated that he has "multiple
competing" attorney-client considerations
meaning that, as an attorney, he claims duties
of confidentiality to other entities he created
or controlled and/or in which he had a
material interest. Even though he
personally funneled APF's money to those
entities, he claimed he could not tell APF
anything about where its own money
went. In addition, he has failed to provide
copies of the files he once maintained as
APF's lawyer, a lawyer's fundamental duty.
He says he gave them to Basel.
A court may evaluate Wetmore's assertions
of privilege and memory loss. The State Bar
of Texas may be asked to review his potential
conflicts as a lawyer representing APF, at
least two for-profit entities, himself, and
others, perhaps including Basel individually,
all of whom shared in APF's money in one
way or another. Potential inconsistencies
between his pleadings and statements in
open court could be subject to review by law
enforcement, the courts and the Bar.
"Dancing with the donors": The
investigation also obtained information
relevant to APF through Wetmore's
testimony in the 24-count federal criminal
trial of former U.S. Representative Steve
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Rev. 11.11.18 Preliminary Report
Stockman, which showed that the ideas for
APF's attempted covert surveillance of the
2015 Legislature actually grew out of a
similar effort funded by Stockman in
2013. Wetmore testified that he had a fake
intern inserted into State Representative
James White's Capitol office. The
prosecutors showed that the motive was to
catch Rep. White doing something that would
help Stockman in the event Rep. White
should run against him. Another person hired
by Wetmore followed Rep. White around
Austin, producing a riveting report of Rep.
White patronizing a TCBY frozen yogurt
store, and yet a third person spied on him in
his home district. Wetmore admitted that the
effort was a failure but testified at
Stockman's trial that it "provided proof of
concept," foreshadowing the 2015 efforts.
Asked why over several months he kept
sending glowing reports to Stockman
about the failed surveillance of Rep.
White, Wetmore testified: "You do a dance
with the donors to keep the operation
going." In a nutshell, that cynical testimony
and the evidence show that the failed 2015
secret filming project achieved nothing but
keeping the "dance" with the donors going.
Wetmore told the state court that he could
not attend a deposition scheduled for March
19, 2018, because at that time he would be
"assisting the defense" in the Stockman trial.
But, Wetmore was questioned under oath by
Stockman's attorneys and said he had not
met Stockman's lawyers and gave the
impression he had never communicated with
them. This potential conflict between
Wetmore's federal testimony and his
statements on the record in state court may
also be evaluated, when the federal
transcripts are available, to determine
whether any laws were broken.
Steve Bresnen is solely responsible for the contents of this report.
In reality, his testimony hardly "assisted"
Stockman. Wetmore was a key (and hostile)
witness subpoenaed by the prosecution to
document his role in Stockman's illegal use of
funds by defrauding contributors to non-
profit charities controlled by Stockman and
using the money for Stockman's personal and
political purposes. Wetmore's ugly demeanor
and unresponsiveness in court surely helped
prosecutors convict his friend Stockman.
Wetmore's Stockman testimony
foreshadowed his efforts to avoid
providing evidence by repeatedly asserting
the attorney-client privilege. When asked
during his federal grand jury testimony about
a check Stockman used to pay him, Wetmore
asserted the privilege. After taking a break to
consult his lawyer, it's reported that he
returned to the grand jury and answered
questions about the check. It seemed as
though he had been advised that the privilege
was not applicable. At trial, he again asserted
the privilege, so the prosecutor impeached
Wetmore's testimony by reading back his
grand jury testimony. This issue may also be
presented for resolution by a state court.
Where are we now? Nearly three years
later, Basel and Wetmore have exhausted
almost every dilatory tactic to avoid
disclosing what happened to hundreds of
thousands of dollars of other peoples' money
on which they got their hands. (See Page
12)
Two federal courts ordered Basel to pay me
$6700 and Wetmore was ordered by a state
court to pay me $1288. Using a bizarre series
of pleadings, Basel made two failed attempts
to remove the case to federal court to avoid
being jailed for contempt by the state court.
Basel accused two federal judges and the
state court system of criminally conspiring
with me against him. Inexplicably, Basel's
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Rev. 11.11.18 Preliminary Report
pleadings also claimed that the state's
child support system is unconstitutional,
even though the case has nothing to do
with child support and he's never been
ordered to pay it. To make his case, he had
copied--verbatim--pleadings from some
"men's rights activists" who have tried to use
the federal courts to avoid paying child
support. Two federal courts found his efforts
frivolous and ordered Basel to pay the
attorneys fees I spent on chasing him out of
his hiding place. I placed a lien on his
property, which later was seized by a
Williamson County constable as a result of a
judgment against him in tangentially-related
litigation (See Page 8).
For Wetmore's part, and to the benefit of
this investigation, he failed on more than
one occasion to do a workman like job as
APF's lawyer and even today has refused to
provide APF information that a lawyer owes
a duty to provide every former client. He
"fired" APF as a client because he said Basel
was uncooperative, even though it turned out
Wetmore was a CEO of APF at the time,
controlled its bank account and had access to
all its records. He's been sanctioned more
than $1200 for failing to show up at a
deposition he was ordered to attend by a
state district judge. And, he's claimed that he
owes duties to other "clients" that "compete"
with his duty to APF, which are conflicts of
interest he created for himself and is now
trying to use to avoid accounting for the
money he personally removed from APF's
account and that of others.
Failure, a consistent theme: Just as
Wetmore's testimony in the Stockman case
showed the failure of his efforts in 2013 vis-
a-vis Rep. White, his deposition in the APF
case demonstrates that none of the efforts in
2014 through 2016 by Wetmore or Basel
Steve Bresnen is solely responsible for the contents of this report.
achieved anything. Examples of projects
Wetmore claims APF worked on:
• A failed attempt to uncover voter fraud in
Colorado.
• A trip to Arizona for a guy named Joe,
whose last name he could not recall.
• Something called the "Vorbeck" project,
which sought unsuccessfully to document
"overcharging" by prosecutors in
domestic violence cases involving the
victim being choked.
• An amicus brief about government abuse
of open records laws, which was never
completed.
During nine hours of testimony under oath,
Wetmore never cited specific examples of
anything he and Basel worked on that
produced anything with any journalistic or
other value. All they did was "dance with
the donors to keep the operation going."
The "second entity": Wetmore controlled
the Texas Demography Project (the
"Project"), the second entity discussed above,
and established and controlled its bank
account. The Project was chartered under
the Texas Nonprofit Corporation Act but we
have found no evidence that an
application for tax-exempt status was ever
filed, much less any tax-exempt status
being granted. Nor does it appear tax
returns were filed by or for the Project. If
correct, these facts effectively make the
Project a for-profit entity for tax purposes,
although its authorized functions under state
law--including its authority to make
payments to its officers, directors and others-
-may be limited by Subchapter B, Chapter 22,
Business Organizations Code ("Subchapter
B"), which places restrictions on non-profits
and their personnel.
The Project did not live long by any measure;
for most of its life it existed only on paper.
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Rev. 11.11.18 Preliminary Report
The Project was created June 26, 2014, and
ceased to exist November 10, 2015. It had no
money until January 9, 2015, and Wetmore
and Basel drained all its money by the end of
the spring of that same year. A Public
Information Report filed with the Texas
Comptroller of Public Accounts showed
Wetmore as its only Director and its General
Counsel.
Little is known about the purpose(s) that
were supposed to be served by the Project.
What is known raises questions regarding
whether the Project's activities squared with
APF's stated purposes and the intent of the
APF donors whose funds were rapidly
transferred into and then out of the Project,
on its way to Basel's company. No
justification for transferring $670,000
from APF to the Project has been offered
by Basel or Wetmore despite multiple
depositions, requests for information by Mr.
Shelley and court orders to disclose the
information.
Apparently, the major purpose of the Project
was to serve as a conduit for APF's money to
be sent to Wetmore and Basel because APF's
money is virtually all the money the
Project ever had and that money remained
in its account only briefly.
The tangential case: A Hays County lawsuit-
-Shafer v. Basel, 16-2113, 207th Judicial
District-- sheds a little light on what the
Project started to do, but, combined with
banking records, the lawsuit shows that
Wetmore and Basel ultimately undercut the
initial rationale for the Project, which
apparently was acted upon only briefly.
In August of 2014, under the name C3
Strategies ("C3"), Basel began doing
business with a man named Raz Shafer, who
was to perform "door-to-door" canvassing
Steve Bresnen is solely responsible for the contents of this report.
work for what Basel referred to as the Texas
Demography Project.
C3 Strategies no longer exists, but at that
time both Shafer and Basel did door-to-door
work on behalf of political campaigns and
causes. Although it was political campaign
season in August through early November
of 2014, it is unknown whether the work
Shafer was to perform involved campaign-
related activities, which would be
improper to pay from a 501(c)(3)'s
money. Because it appears the Project had
no account of its own during this time, it is
unknown by whom Shafer was being paid
and from what source of funds.
On January 20, 2015--11 days after Wetmore
deposited $250,000 into the newly created
Project account and two days before a second
installment of $250,000 was deposited to the
Project account--Wetmore suggested and
obtained a written contract between Shafer
and Basel to continue Shafer's work on the
Texas Demography Project. But, on February
27, 2015, Wetmore told Shafer that the Texas
Demography Project was ending; that Shafer
should cease all work; and, that Shafer should
submit bills to C3 for work previously
performed.
Basel/C3 stiffed Shafer for almost $70,000
owed under the contract, claiming as early
as March 25, 2015, a lack of sufficient funds,
even though C3 was paid $100,000 in early
January from the Project's account and
Wetmore had deposited a total of $670,000
into the account of the Texas Demography
Project by March 16. That money was
ultimately paid to C3, Basel's for-profit
company.
Shafer prevailed in his suit against Basel and
placed a lien for more than $70,000 on
Basel's 83+ acres of Williamson County
property. The judgment agreed with Shafer's
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Rev. 11.11.18 Preliminary Report
contention that the property had been
acquired in mid-2016 by improperly
transferring money in an attempt to hinder,
delay or defraud Shafer's collection of the
debt. Whether the APF money routed
through the Project to Basel was used to
acquire the Williamson County property
has not been determined.
$700,000 worth of questions: On January 9,
2015, Wetmore completed the papers to
establish the Project's bank account,
simultaneously transferred $250,000 of APF
funds into the new account and immediately
sent $100,000 of that money to Basel's C3
Strategies.
More deposits of APF;s money into Project
accounts followed.
On January 13, 2015, Wetmore withdrew
$100,000 in cash from the Project account.
No receipts for the expenditure of this money
were provided.
On January 22, 2015, Wetmore transferred
$200,000 to C3 Strategies, Basel's firm,
again without any documentation for how it
was spent.
On March 16, 2015, Wetmore again
transferred $250,000 to C3 Strategies
without any documentation.
The events described in this report raise
serious questions about:
• Potential liability for federal taxes on
behalf of the Project, APF and others.
• Intentionally skirting the tax laws by
routing money through an entity for
which tax deductions are allowed to an
entity for which deductions are not
allowed, if that is what happened.
Steve Bresnen is solely responsible for the contents of this report.
• Potential consequences facing Wetmore
and Basel for authorizing and carrying
out these transactions if they violated the
tax laws and Subchapter B.
More information is needed to address each
of these questions. Can there be reasonable
explanations for all of these transactions?
Maybe, but to date neither Basel nor
Wetmore have provided those answers.
What about the contributors? The critical
time period for purposes of the investigation
was late 2014 into the fall of 2015. Recall that
APF was essentially broke on August 31,
2014.
In his first deposition, Wetmore testified that
some donors contributed to APF in return for
APF performing specified "projects," usually
involving one or more people conducting
surveillance in an attempt to capture
embarrassing or even criminal conduct for
use against their "targets" and, he says, in
response to "tips."
There is no evidence at this time that any
of the donors knew of the sleazy tactics
Wetmore and Basel would employ or that
the donors intended to have the 2015
legislative session disrupted.
A variety of donors filled APF's coffers with
donations ranging from $670,000 down to
$25. The proportion of donations that came
from Texas depends on the actual identity of
the single largest contributor.
• The single largest contributor was the
National Christian Foundation South
Florida ("NCF"), which made two
contributions totaling $920,000, one for
$670,000 on October 31, 2014, and the
other for $250,000 on November 13,
2014. NCF is a long-established and
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Rev. 11.11.18 Preliminary Report
reputable 501(c)(3) tax-exempt
foundation. It is a "donor-advised fund,"
of which there are many in the U.S. Here
is how the I.R.S. describes donor-advised
funds:
"Generally, a donor-advised
fund is a separately identified
fund or account that is
maintained and operated by a
section 501(c)(3) organization,
which is called a sponsoring
organization. Each account is
composed of contributions
made by individual donors.
Once the donor makes the
contribution, the organization
has legal control over it.
However, the donor, or the
donor's representative,
retains advisory privileges
with respect to the
distribution of funds and the
investment of assets in the
account." [Emphasis added]
So, as a donor-advised fund, NCF
effectively acts a pass-through vehicle:
Donor A contributes to NCF and receives
a tax deduction. NCF then passes on
contributions to one or more other
organizations that are eligible for tax-
deductible contributions based on Donor
A's exercise of "advisory privileges."
The original donors are not publicly
disclosed, which is one reason donors use
these pass-through vehicles. However, the
recipients of the money passed through
NCF are disclosed in NCF's publicly-
available Form 990s. NCF's Form 990s
have run as many as 17,000 pages (NCF's
payments to APF were disclosed there) and
at one time NCF had $1.6 billion in assets.
Steve Bresnen is solely responsible for the contents of this report.
The identity of the actual donor(s) of
the $670,000 and $250,000
contributions that flowed through NCF
to APF is/are unknown at this time. If
the donor(s) resides in Texas, the vast
majority of APF's money came from in-
state sources. If not, a relatively small
percentage of the money came from
Texans.
Also unknown are:
1. Whether APF pitched or committed to
the original donor(s) or NCF to
perform a specific project or projects.
2. Whether specific people/projects
were targeted at the request of the
original donor(s) or NCF in return for
the contribution(s).
3. Whether the original donors obtained
a tax deduction by contributing to NCF
while intending that their money
would be passed through APF to an
entity whose activities would not be
eligible for the tax deduction.
An informant who claims to know
stated that some wealthy Texas
conservative political activists make
contributions through NCF. Whether
that is true and whether one or more of
those persons made the contributions
above are unknown.
Wetmore was also deposed about
contracts he prepared for APF and never
mentioned any contracts that would have
involved these funds, such as having APF
or the Project perform specific activities,
as Wetmore testified sometimes was the
case with other donors.
The timing of the $670,000 contribution
and the rapid withdrawals by Wetmore
led to the conclusion that the money
10
Rev. 11.11.18 Preliminary Report
Wetmore passed on to the Texas
Demography Project essentially came
from that money. It is probable that the
Project could not have accepted the NCF
contributions directly without
threatening the tax-deductibility of the
original contributions to NCF because the
Project was not a 501(c)(3). Resolution
of this question may turn on how the
money was actually used.
We know the Project's money (about
$670,000) flowed to Basel's firm, C3
Strategies, which, as a for-profit entity,
likely could not have taken a contribution
directly from NCF, either. We also know
that the money was transferred by
Wetmore from the Project's account
but we do not know at this time the status
of any tax liability the transfers may have
entailed.
4. Central Transport, LLC, of Warren,
Michigan, paid $26,250 on September 19,
2014. The company is affiliated with
Detroit International Bridge, which had
paid $60,000 earlier in 2014. Both are
owned by Manuel Moroun, who operates
an international crossing between
Michigan and Canada and once sought to
block Michigan Governor Rick Snyder's
efforts to have a new Detroit River bridge
constructed to Canada.
5. Online for Life, Inc., of Frisco, Texas,
made four payments totaling $70,000 in
2015 (two for $20,000 each on March 6
and April 28; one for $15,000 on July 10;
and one for $15,000 on August 24). A
second informant identified wealthy
Texas conservative political activist(s)
as being a supporter(s) of this
organization. Whether that is true and
whether the person(s) influenced or had
Steve Bresnen is solely responsible for the contents of this report.
any connection to the payments above are
unknown at this time.
6. AgendaWise of Austin, Texas, paid
$13,936 on June 4, 2015. This odd
amount is likely a payment or
reimbursement of an expenditure
incurred by APF. AgendaWise was
started as part of Midland, Texas, oilman
Tim Dunn's coterie of far-right non-
profits working to influence Texas public
policy and campaigns.
7. MAC Research, Inc. of Washington, D.C.,
delivered $10,000 dated October 19,
2015.
8. Wallace, Jordan, Ratliff & Brandt, LLC, a
Birmingham, Alabama, law firm sent
$10,000 dated January 5, 2015.
9. Donald "Brent" Goleman wrote a check
to C3 dated January 15, 2015, for $9,999,
which was nevertheless deposited to
APF's account.
Wetmore continues to hide what happened
to the money. I have asked the District Court
to force him to answer the questions he has
refused to answer based on attorney-client
privilege. In response, Wetmore filed an
"anti-SLAPP" motion under Chapter 27 of the
Civil Practices and Remedies Code. His
motion was dismissed. He has appealed to
the Third Court of Appeals. Next week, I will
file a reply brief in which it will be shown
that Chapter 27 does not apply to post-
judgment discovery and cannot apply
because the Legislature cannot impede the
courts from enforcing their own judgments.
When Wetmore's appeal is finally disposed
of, he'll once again be facing accountability.
Conclusion: This report is preliminary. The
facts reported herein are as known as of the
11
Rev. 11.11.18 Preliminary Report

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

• 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