Republican presidential candidate Sen. Ted Cruz (R-Texas) has a strategy to take his campaign all the way to the convention, and it runs straight through the U.S. Virgin Islands. To make it work, though, his campaign will have to navigate a tricky intra-party rivalry on the islands brought to a boil in part by a Cruz operative’s work for a so-called “scam PAC.”

According to a document obtained by OpenSecrets Blog, the operative, Saul Anuzis, contracted to receive a 25 percent commission on funds raised by a “scam PAC” in March 2014. A company managed by Anuzis, who advises the Cruz campaign, entered into the agreement with John Canegata, chairman of the PAC, which is called the U.S. Virgin Island Republican Party (VIGOP).

The name is important, making the group sound very much like an official Republican party committee. But it’s not. The Federal Election Commission hasn’t recognized it as a state committee of the party. Members of the Territorial Committee of the Republican Party of the United States Virgin Islands deny having even known about the PAC for more than a year after it was created, several of the party’s members allege.

Canegata also allegedly kept from other territorial party leaders an outline of the Virgin Islands’ new Republican primary rules submitted to the RNC on Sept. 30. Those rules impose a $3,500 charge for candidates to appear on the ballot, asking that checks be be made payable to “USVIGOP“– a name Canegata admitted was confusing. Those payments, he said Wednesday in an interview with OpenSecrets Blog, will be deposited into the party’s account, not the PAC’s.

Herb Schoenbohm, the current vice chairman of the territorial party, opposes the new fee, which he said might discourage candidates less focused on the islands than Cruz is from competing there. Another new rule instigated by Canegata makes the Virgin Islands’ Republican primary a “winner-take-all” race, crowning the candidate with the most votes — majority or not — with all the territory’s delegates.

Thus, if Cruz were to win only a plurality of votes, he’d win all of the delegates from the Virgin Islands. And that plays perfectly into the candidate’s strategy, first reported by Politico, for complying with an obscure national GOP rule: The Republican nominee for president must win majorities — not pluralities — of convention delegates in at least eight states and territories. Given how large the Republican field is, majorities could be hard to come by. Cruz’ plan, then, is to win majorities of delegates where other candidates might not race hard against him — like the Virgin Islands.

Anuzis, whose company has received $5,982 from VIGOP since February 2014, FEC records show, has been public about the Cruz campaign’s strategy in the outlying U.S. territories. “Whether you’re getting Texas, Michigan and Ohio, or the Virgin Islands, Puerto Rico and American Samoa, each has an equal voice when it comes to nominating candidates to put them on the ballot at the convention,” Anuzis told Politico.

In an email to the Republican National Committee counsel’s office, Schoenbohm said Canegata’s proposed rules are fraudulent. He wrote that VIGOP operated for more than a year without party officials — other than Canegata — knowing, until its activity was exposed by the New York Times last year. That report details just how little VIGOP did to influence the politics of the Virgin Islands, and how it instead opted to pour funds raised into a network of direct mail companies to raise more money. The RNC counsel did not respond to a request for comment.

And Schoenbohm said the rules proposed by Canegata were never approved by the party. Canegata told the RNC that the rules resolution was adopted on Sept. 29, 2015 at a meeting that the chairman had in fact postponed, an email provided by Schoenbohm shows.

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“There was no meeting on Sept. 29 or anywhere before that or after that,” Schoenbohm said. On Wednesday, Canegata did not deny that an “official meeting” did not take place.

“I don’t like it when the fix is in, and the fix is in,” Schoenbohm said of Cruz’ prospecting for a win in the Virgin Islands primary.

VIGOP lists controversial election law operative Scott B. Mackenzie as its treasurer. In 2013, another PAC of which Mackenzie was treasurer allegedly raised money using Virginia gubernatorial candidate Ken Cuccinelli’s name without his permission. The committee settled a lawsuit filed by Cuccinelli, paying him $85,000 and giving him access to its telephone, email and direct mail contact lists.

Mackenzie’s main role as treasurer, he said Wednesday, is filing FEC reports and making sure VIGOP is in compliance with federal regulations.

Schoenbohm and others have questions about Mackenzie’s activity, and asked for documents regarding “payments from [the PAC] to Scott B. Mackenzie or companies controlled by Mr. Mackenzie” and “payments from [the PAC] to Saul Anuzis or companies controlled by Mr. Anuzis,” according to an ad hoc report by several members of the party. They wrote that they did not receive records in response to those requests.

Schoenbohm and Canegata are rivals. Schoenbohm lost his own bid for chairman of the islands’ Republican party to Canegata by 10 votes in 2014, a race in which the most notorious of the PACs under Mackenzie’s compliance guidance, Freedom’s Defense Fund, supported Canegata. He sees similarities between the unauthorized use of Cuccinelli’s name and what VIGOP, which could be mistaken for the territorial party, is doing in the Virgin Islands.

On Wednesday, Canegata defended VIGOP’s tactics, saying it was able to donate to 13 candidates competing on the national level in 2014. Of his support from Freedom’s Defense Fund in the chairman’s race, he said: “Obviously they have an interest in me winning as chairman…if I was to lose tomorrow, and Herb was to be the new chairman, he would probably cut them right off.”

Anuzis could not be reached for comment on Wednesday. A spokesman for Cruz said in response to questions from OpenSecrets Blog that Anuzis is a campaign volunteer and that he did not see a connection between Anuzis “having a contract to help with fundraising and the VIGOP decided to make VI a ‘winner-take-all’ territory.”



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