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Nevada congressional candidate is suing consulting firms for campaign assets

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A Republican candidate for Congress accuses a political consultancy firm of withholding assets he paid for despite his contract termination with the company.

Noah Malgeri, who is running for Nevada’s 3rd Congressional District, is suing McShane LLC for regaining access to campaign information such as its budgets, email, campaign plans, survey data, and login information for websites and social media accounts. The company said Malgeri did not pay his bill in full.

The lawsuit, filed in Clark County District Court on December 3, accuses McShane, a well-known political consultancy, of illegally withholding assets and enriching itself by asking more than $ 4,700 for a fundraising plan it doesn’t implemented.

Malgeri said the company is trying to use his active political campaign as leverage to force him to pay for the return of his property.

“That is highly unethical and unprofessional,” said Malgeri.

But Rory McShane, head of the firm, said his company was not retaining Malgeri’s personal property, as the lawsuit alleges.

“I don’t give my intellectual property to a customer who hasn’t performed their contract,” he said.

Brian Hardy, the company’s attorney, said in a statement that McShane LLC plans to file counterclaims in the coming days.

“What is really unfortunate is that this litigation is inevitably going to be the focus of his campaign, rather than the issues facing the voters he is trying to represent,” he said.

Malgeri’s allegations prompted other McShane clients, including gubernatorial candidate Michele Fiore, secretary to secretary of state Jim Marchant, and congressional candidate Sam Peters, to issue statements of support for McShane through his office.

The dispute also resulted in US MP Paul Gosar, R-Ariz., Withdrawing support from Malgeri in a statement released by McShane’s office. Malgeri said he did not consider the withdrawal of consent statement to be true.

“He didn’t tell me that,” said Malgeri. “I didn’t see him until the weekend.”

Gosar’s chief of staff said the revocation statement was legitimate.

Early turmoil, lawsuit claims

Malgeri hired McShane’s company for its congressional campaign in May, pledging to pay $ 6,000 a month for advisory services and an additional $ 15,000 for a website and video. Malgeri was of the opinion relatively early on that the company was not providing services at an acceptable level, the lawsuit says.

“Mr. Malgeri had the impression that Rory McShane and his team had a negative impact on Mr. Malgeri’s chances in the race,” the lawsuit said.

According to the lawsuit, it became clear to Malgeri that the company did not have the capacity or desire to improve its services, but instead “simply committed to maintaining its ability to collect as many fees as possible from Mr. Malgeri”.

However, McShane said Malgeri had a history of praising the company’s work and then grappling with it when the bill came due.

Malgeri once attempted to terminate the contract but reluctantly agreed to pay a reduced price for using McShane’s donor list and a reduced level of other services, according to the lawsuit.

Dispute over fundraising

After Malgeri agreed to work with the company, McShane LLC vice president Woodrow Johnston suggested Malgeri consider a proposal to raise as much money as possible for the fundraising quarter.

The plan called for the company to run a direct mail program, robocalls, and a digital campaign on Malgeri’s social media platforms with the goal of raising $ 40,000 in September.

Malgeri paid more than $ 4,700 for the plan, which the company was unable to implement until at least mid-September, the lawsuit said. The plan did not bring in any money Malgeri could raise on his own, according to the lawsuit.

McShane said the plan is intended to facilitate Malgeri’s fundraising efforts by educating large donors about his campaign and that his company began executing the plan in the first week of September. Malgeri has raised money from the plan but has not paid the company a commission, McShane said.

Termination of contract

On September 27, Malgeri announced to Johnston that he was terminating his contract with the company. Johnston resisted, offering to accept $ 500 a month to be available for campaign-related questions, but no other services, the complaint said.

“(Johnston) warned Mr. Malgeri that McShane would sue Mr. Malgeri for the full fee for the next (following, not elapsed) month if he did not agree to the fee of $ 500 in exchange for no services even though no services were provided for the following month or was requested or requested in any way, ”the lawsuit states.

Malgeri turned down the offer and his applications for access to his campaign assets were unsuccessful, according to the lawsuit.

McShane said Malgeri’s contract required 30 days’ written notice before the cancellation can take effect and that he would be responsible for paying the bill.

The company offered to settle the dispute for about $ 3,200.

Contact Blake Apgar at bapgar@reviewjournal.com or 702-387-5298. Follow @blakeapgar on Twitter.

A-21-844952-C (2) from Las Vegas Review-Journal on Scribd

A-21-844952-C (2) from Las Vegas Review-Journal on Scribd

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