By JEFF HORWITZ
WASHINGTON (AP) — The political strategist and online guru who was named President Donald Trump's 2020 campaign manager Tuesday has a close financial relationship with a penny-stock firm with a questionable history that includes longstanding ties to a convicted fraudster, according to an Associated Press investigation.
Brad Parscale, who played a key role in Trump's 2016 election victory, signed a $10 million deal in August to sell his digital marketing company to CloudCommerce Inc. As part of the deal, Parscale currently serves as a member of California-based company's management team.
The company touts itself as "a global provider of cloud-driven e-commerce and mobile commerce solutions." But records reviewed by the AP raise questions about its current financial picture and its rocky past.
Cloud Commerce's operations have not turned a profit in nearly a decade, the records indicate. The company's most recent quarterly earnings showed it has spent more than $19 million in investor money since its creation nearly two decades ago and has only $107,000 in cash on hand.
And in 2006, a top executive at the company, which was operating under a different name at the time, was caught in an FBI bribery sting and later pleaded guilty to securities fraud. The company said the former executive no longer has any connection to the company, but documents reviewed by the AP indicate he has remained involved in CloudCommerce's major corporate decisions in recent years.
Parscale did not answer written questions from the AP about what he knew regarding CloudCommerce and its history when he sold his firm to the company and joined its board of directors.
A press release announcing Parscale's hiring as Trump's new campaign manager included Eric Trump calling him "an amazing talent" who has the Trump family's "complete trust."
The owner of an obscure web development firm before the 2016 presidential race, Parscale parlayed commercial website work for Trump family businesses into a role as the public face of Trump's highly successful digital campaign. He is considered an ally of Jared Kushner and has taken credit both for selling Trump on digital advertising and for the campaign's vital last-minute pivot to Michigan and Wisconsin.
"Brad was essential in bringing a disciplined technology and data-driven approach to how the 2016 campaign was run," Kushner, Trump's adviser and son-in-law, said in the campaign press release.
As part of the deal with CloudCommerce, the company acquired Parscale's web development company, including roughly 60 employees, many of his past clients and a web-hosting business that services some Trump family business websites.
CloudCommerce did not acquire Parscale's digital advertising business, however. That work has been transferred to another Parscale company based in Florida, which handles as much as $1 million a month in digital advertising for the Trump campaign alone.
Parscale is on the payroll of five campaign and political advocacy organizations tied to Trump, lucrative work that made him central to Trump's campaign even before his appointment as campaign manager.
In addition, Parscale has hired Eric Trump's wife, Lara, a move that reflects his close relationship to the family and shields how much she is being paid from public disclosure because she works for a private company. According to the terms of her hiring last March, she was Giles-Parscale's liaison to the campaign, working out of Trump Tower.
Neither she nor Parscale responded to emailed questions about her current compensation.
When Parscale's CloudCommerce deal was originally announced last August, the price of CloudCommerce's shares surged.