Herman Cain's two top campaign aides ran a private Wisconsin-based corporation that helped the GOP presidential candidate get his fledgling campaign off the ground by originally footing the bill for tens of thousands of dollars in expenses for such items as iPads, chartered flights and travel to Iowa and Las Vegas - something that might breach federal tax and campaign law, according to sources and documents.

Internal financial records obtained by No Quarter show that Prosperity USA said it was owed about $40,000 by the Cain campaign for a variety of items in February and March. Cain began taking donations for his presidential bid on Jan. 1.

Prosperity USA was owned and run by Wisconsin political operatives Mark Block and Linda Hansen, Cain's current chief of staff and deputy chief of staff, respectively.

The authenticity of the records was verified by two individuals close to the firm.

It is not known if Cain's election fund eventually paid back Prosperity USA, which now appears defunct. The candidate's federal election filings make no mention of the debt, and the figures in the documents don't match payments made by the candidate's campaign.

In addition to picking up these expenses at least initially, Prosperity USA also paid as much as $100,000 to the Congress of Racial Equality, a conservative black organization, shortly before Cain was a featured speaker at the group's annual Martin Luther King Jr. dinner in mid-January.

Cain, who has surged to a top-tier presidential candidate in the past month, apparently was not paid for the appearance. The personal financial disclosure forms for the former CEO of Godfather's Pizza list no honorariums for speeches.

Election law experts say the transactions raise a host of questions for the private organization, which billed itself as a tax-exempt nonprofit, and the Cain team.

"If the records accurately reflect what occurred, this is way out of bounds," said a Washington, D.C.-based election lawyer who advises many Republican candidates and conservative groups on campaign issues. The lawyer asked not to be identified because of those affiliations.

Michael Maistelman, a Wisconsin campaign attorney, agreed.

"The number of questionable and possibly illegal transactions conducted on behalf of Herman Cain is staggering," said Maistelman, a Democrat who has represented politicians from both parties on campaign issues.

Block and Hansen have not returned numerous calls in recent days.

Late Friday, Block sent an email saying: "Will be able to respond to you, but need to schedule time to review questions. Obviously in the midst of a Presidential campaign I cannot drop everything."

For decades, Block worked behind the scenes for several conservative candidates and causes in Wisconsin. He is best known in the state for his role as campaign manager for former state Supreme Court Justice Jon Wilcox in 1997. Accused of election law violations, Block settled the case by agreeing to pay a $15,000 fine and to stay out of Wisconsin politics for three years.

More recently, Block, 57, ran the state chapter of Americans for Prosperity, a nonprofit cofounded by the conservative Koch brothers that helped organize the tea party movement in Wisconsin and elsewhere.

It was through Americans for Prosperity that Block met Cain and encouraged him to run for national office. Block's role with the Cain campaign became a point of national interest in the past week when a bizarre online campaign ad featuring the chain-smoking Wisconsin operative went viral.

In recent years, Block spun off a handful of organizations from Americans for Prosperity, most of them incorporating "prosperity" in the name. Officials with Americans for Prosperity emphasize that these other groups were legally separate from their organization.

The largest group founded by Block was called Wisconsin Prosperity Network, which was supposed to be an umbrella organization that would spend more than $6 million a year underwriting a dozen or so other conservative groups in the hopes of turning the state red.

In the 2008 incorporation papers, Block is listed as the president of Wisconsin Prosperity Network, which was set up as a tax-exempt nonprofit group. That means the charitable organization cannot have direct political involvement. Hansen was the group's executive director.

Last year, Block started up Prosperity USA, another tax-exempt charitable group for which Block appeared to be the sole board member. Again, Hansen handled the day-to-day operations.

Insiders familiar with the groups say the two groups were closely linked and raised hundreds of thousands of dollars from prominent conservatives around the state. One supporter, who asked that his name not be used because he still supports Cain and other conservatives, said he and many others were deeply upset with the groups - and Hansen, in particular - for failing to use the money for its intended purposes.

Internal financial records show both organizations were operating in the black during the first half of 2010.

But by early this year, expenses were far outpacing income at the two entities. Balance sheets showed Wisconsin Prosperity Network was more than $62,000 in the hole by early February; Prosperity USA was in even worse shape, with its liabilities exceeding its assets by $110,000.

In fact, the records indicate Prosperity USA's biggest asset was nearly $40,000 that it was owed by "FOH," a reference to Friends of Herman Cain, the name of Cain's presidential operation.

A more detailed checking account says the Cain campaign owed nearly $15,000 for an "Atlanta invoice," about $17,000 for chartered flight service and $5,000 for travel and meetings in Iowa, Las Vegas, Houston, Dallas and Louisiana. The document says the Cain campaign had been billed $3,700 for iPads purchased on Jan. 4.

A series of small-ticket items for travel and expenses by Block are listed as "not billed to FOH but due from them."

The national election expert who works with GOP candidates said it would be a violation of the tax code for Prosperity USA to advance money to the Cain campaign for these items. She said there also are strict federal election regulations on reporting debts and incurring travel obligations.

"I just don't see how they can justify this," she said. "It's a total mess."

The records suggest that Prosperity USA had been underwriting travel for Cain even before he announced his plans to run for president.

For instance, one document says the group was to be paid $5,000 for the costs associated with Cain's speech in September 2010 to the conservative Right Nation rally in Chicago, an event that the records say Cain attended at the request of Americans for Prosperity. The Cain campaign later used a segment from that speech in a campaign ad.

Along with these expenses, the internal records note Prosperity USA paid for such items as Block's trip to Washington, D.C., to meet with billionaire philanthropist David Koch. Singer Krista Branch, who recorded "I Am America," the unofficial anthem of the tea party movement, was supposed to be paid $3,000 by the Wisconsin group.

Cain has adopted the tune as his campaign song. Branch's husband, Michael, who wrote the song, has been paid $11,250 in his role as the Cain campaign's Tennessee director and $7,360 as a fundraising consultant.

More intriguing, the records show Prosperity USA received $150,000 in loans from individuals who could not be identified.

Sources familiar with the group say Hansen paid much of the loan money earlier this year to the Congress of Racial Equality, a former civil rights organization that now promotes conservative causes. In mid-January, Cain was a featured speaker at the group's annual awards dinner, which was hosted by controversial conservative blogger Andrew Breitbart.

The Congress of Racial Equality is headed by Niger Innis, who did not return calls last week. He and his father, Roy Innis, made several appearances at Wisconsin tea party events in the past.

Several board members for Prosperity USA and Wisconsin Prosperity Network resigned from the organization when they learned after the fact that Hansen had borrowed this money and donated much of it to the conservative group, according to insiders.

In the summer, the attorney for the two groups, Michael Dean, resigned as the registered agent for Wisconsin Prosperity Network in a letter filed with the state Department of Financial Institutions. Sources say he also contacted the Internal Revenue Service regarding the group's application for tax-exempt status.

Reached at home last week, Dean declined to comment.

Even though there is little or no evidence that the Wisconsin Prosperity Network is still functioning, the group is one of the listed litigants in a case currently before the state Supreme Court.

The trail of red ink left by Block and Hansen, however, extends beyond the private entities they founded.

Several conservatives say the state chapter of Americans for Prosperity was left with a stack of unpaid invoices totaling tens of thousands of dollars when Block officially left the organization at the start of the year.

Matt Seaholm, who replaced Block as the director of the state chapter, declined to discuss the group's finances.

"I'll leave that to the national office," Seaholm said.

A spokesman for Americans for Prosperity in Virginia did not return calls Friday.

Contact Daniel Bice at (414) 224-2135 or dbice@journalsentinel.com. Follow him on Twitter @NoQuarterr.