(CNN) A company that President Donald Trump's campaign manager, Brad Parscale, says he owns has received hundreds of thousands of dollars from the President's flagship political action committee, which is barred from coordinating with the campaign.
Federal Election Commission records indicate that Red State Data and Digital has received $910,000 from America First Action, the super PAC formed in 2017 to support the Trump-Pence agenda and fellow Republican candidates.
After CNN initially published a story about Parscale's wife, Candice, being an owner of Red State, her husband contacted CNN and acknowledged he owns the company even though she is listed on legal paperwork. "I am the owner of Red State," Parscale told CNN.
Parscale said he hadn't originally wanted to disclose his ownership publicly because there are no available records connecting him to the company.
Delaware incorporation documents name only Candice Parscale as a "member" of Red State Data and Digital. A "member" of an LLC is usually an owner. The company was founded on March 2, 2018, just days after it was announced that Brad Parscale would become Trump's campaign manager. His name does not appear on the documents.
In a series of texts with CNN, after initial publication, Parscale said that "so, legally we both own it," and "she is on the paperwork yes." He also said that "she is my wife and I allow her to file and be on my companies because I trust her. It depends on how you look at it. But no. It is all my company." Then later he said, "I own the company solely," and that his wife "listed it incorrectly" on the incorporation document, speaking of her being named as a "member." "She just checked the box of what she was. I'm the owner."
He also tweeted around the same time, "I own all my companies. My wife is member on some of them to do filings and bookkeeping. This is a disgusting trick to make a very simple thing look nefarious. Her last name is Parscale, what would that hide?"
Super PACs can raise and spend unlimited amounts of money on behalf of federal candidates, but they are barred from coordinating spending decisions with those campaigns, among other limitations.
Brad Parscale and his wife both insist their arrangement is legitimate and that there is no coordination.
"This is a perfectly legal and appropriate arrangement, which is firewalled, with zero chance for coordination," he said in a statement. "There could not possibly be coordination because the ads placed were for other candidates in the 2018 midterms. Everything is in FEC compliance."
Still, experts in federal election law consulted by CNN said earlier that the appearance of a connection between the President's main super PAC and a firm set up by his campaign manager's spouse that handles political ads walks right up to the line.
"It calls into question the independence of the super PAC," said Larry Noble, the former general counsel to the Federal Election Commission and a CNN contributor. "One would hope a watchdog agency would investigate allegations of coordination."
Noble said the FEC has been "lax" about enforcing coordination rules. The FEC was further weakened by the resignation of one of its commissioners this week, reducing the number of sitting commissioners to three and thereby stripping it of its power to enforce campaign finance laws. Federal law requires four or more commissioners to approve new rules or take actions to punish those who violate election law.
Brad Parscale served as Trump's digital media director during the 2016 campaign. After the election, in January 2017 he co-founded America First Policies, the sister nonprofit closely related to the America First Action super PAC. He also helped raise millions of dollars in support of Trump's reelection bid.
In 2017, he founded Parscale Strategy LLC, a marketing company that did work for America First Action, as well as others including the Republican National Committee.
As Trump's campaign manager, Parscale has come under scrutiny over the amount of money he's made off his political companies. According to a source close to the company, Parscale was rattled by recent negative press, particularly criticism among his Republican peers over a $13,500 fee he was paid for a speech to the Republican Party of Seminole County, Florida.
Parscale has returned the money to the campaign, according to a source close to the company. In the wake of the criticism, he has begun downsizing, according to the source, who said he had let three employees go from Parscale Strategy in the past week. A Trump campaign spokesman declined to comment about whether Parscale had returned the money to the campaign.
Since then, the company has received payments totaling approximately $70,000 for fundraising consulting and website design and development, according to FEC filings. The last payment of $10,000 was made in June 2019.
The same source close to the company says it stopped involvement with ads or media spends, typically the biggest expenditures of political groups, after the midterms.
In an interview with CNN this week, Candice Parscale said she is simply the bookkeeper for Red State, which she described as a small web-services company. The super PAC, however, remains Red State's only client, according to FEC filings.
Candice Parscale also denied having any involvement in Red State's strategy or work for campaigns.
"I do payroll and invoicing," she said.
According to its incorporation documents, Red State's listed street address is the same as a UPS Store near Capitol Hill in Washington. It's not uncommon for LLC's to list mailboxes as their addresses.
The company has no website. The Parscales live in Fort Lauderdale, Florida, where Candice Parscale says Red State employs at least a couple of people. They also said the company had one employee in Washington.
Once Brad Parscale moved over to run the Trump campaign last year, according to his wife, the couple took legal advice as to how to retain a few of his employees. The staff, she says, mostly did not want to leave Florida and had no long-term interest in working for a political action committee.
"These are web designers, not policy people," she explained. Hence, according to her, the formation of Red State, which could keep the web designers separate from the super PAC.
According to Candice Parscale, Red State does not have a CEO. Instead a woman whom she declined to name runs the company and reports directly to the president of America First Action, Brian Walsh. Candice Parscale said she does not have work-related discussions herself with Walsh, though she does know him socially.
Walsh did not answer specific questions about how he works with Red State or about his relationship with Candice Parscale when asked by CNN.
An America First spokesperson told CNN, "Red State is a valued vendor that provides us with digital consulting services at a competitive rate," and when asked about the propriety of the campaign manager's wife working for a firm directed by the super PAC, said, "America First strictly complies with FEC rules and regulations and any suggestion otherwise is patently false."
Campaign finance experts say it is difficult to know if the required distance between the entities is being adhered to.
"If Parscale wanted to sever himself completely from the super PAC, then I don't know why he would create a company involving his wife," said Fred Wertheimer, president of Democracy 21, a nonprofit organization committed to reducing the amount of dark money in politics. "It's hard to know if there's a legal issue or not, because of the lack of transparency."
Wertheimer said it would be difficult to determine whether the Parscales were having conversations about work that was being done for the super PAC by Red State. "That's why dark money is so dangerous," he said. "No one knows what's going on."
Noble agreed that the setup is "concerning" because it poses the question of whether Brad and Candice Parscale talked strategy together. "It looks terrible because it's hard to believe they would not share information," Noble said. "Maybe they won't," he added wryly.
This story and the headline have been updated to include additional information given to CNN by Brad Parscale after publication.