Campaign Legal Center filed a complaint with the Federal Election Commission (FEC) yesterday alleging the Trump campaign and its joint fundraising committee have violated the law by secretly laundering nearly $170 million in spending, through firms headed by senior Trump campaign official Brad Parscale and other firms created by Trump campaign lawyers.
Here's how the scheme appears to work: The Trump campaign reported millions in payments to Brad Parscale's firms—American Made and Parscale Strategy. Those firms then apparently disbursed the cash to campaign vendors—who were the entities actually doing the work and receiving payment for it.
To help explain the arrangement, here’s a visualization by CLC’s Multimedia Strategist, Casey Atkins:
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In other words, the campaign isn't disclosing, on the public record, required information about $170 million in payments to a number of companies and individuals that are engaged in significant work for it, as well as payments to Trump family members or associates like Lara Trump and Kimberly Guilfoyle. This is the vast majority of the money being spent by the campaign.
This scheme flagrantly violates the transparency requirements mandated by federal law, and it leaves the public in the dark about where the campaign funds are actually going, and for what services. It deprives President Trump’s donors of their ability to monitor the campaign’s stewardship of funds (for example, whether senior campaign staff are being paid exorbitant salaries).
And this secrecy could potentially disguise other campaign finance violations, but we don’t know, because the campaign isn’t disclosing these routed payments. We only know the general framework of this laundering operation because the campaign publicly refers to polls taken, research conducted, and social media campaigns—although details of the payment for these activities cannot be found anywhere on the campaign's FEC reports.
We’ve asked the FEC—the only federal agency dedicated to enforcing our laws governing presidential campaigns—to take action and require the Trump campaign to follow the law. This is something the FEC should be expected to do: there are several examples of the FEC penalizing campaigns for using conduit schemes like this, most recently with Michelle Bachmann’s presidential campaign.
But, there's a problem: right now, the FEC can’t do anything about this. It can’t enforce our election laws unless a legally-mandated quorum of 4 commissioners (out of 6 seats) is restored.
The FEC’s quorum was very briefly restored in May with the confirmation of new Commissioner Trey Trainor, but within days, the other Republican Commissioner, Caroline Hunter, resigned.
President Trump's nomination of Trainor had been rushed through the Senate by Mitch McConnell in violation of the usual Senate norms for such appointments, with the claim that the Senate could not wait for a Democratic appointee because having an FEC quorum in an election year was such a high priority. This turned out to be only a ruse, as Hunter's subsequent resignation—again denying the FEC a quorum—occurred within days of Trainor’s arrival at the FEC.
That same day, the White House had an official statement ready to put out about a possible replacement—so Hunter's resignation clearly was not a surprise to Republican leaders. In effect, the Trump campaign has clearly decided that it will not be held to account for violating the law—at least until after the November election.
The Trump campaign’s scheme to deny the public transparency of its spending, as required by law, is the latest iteration of an ongoing problem: the crumbling of election transparency. What can be done?
First, we need a strong, functioning FEC that can enforce our laws and hold presidential campaigns accountable. A reformed FEC could reasonably be expected to do the right thing and protect the integrity of our elections. There are several bills in Congress that would accomplish this, and they should be a priority for the new Congress next year.
More broadly, we need to address the larger culture of corruption and secrecy in our campaign finance system. This is a top concern for Campaign Legal Center, and we’ve made it a priority in 2020. We launched a new resource this month called StopSecretSpending.org, where we list solutions that can help restore real transparency to our political system. I encourage you to check it out.
In the race for the presidency, voters have a right to know how campaign money is being spent. As Supreme Court Justice Louis Brandeis once famously said, “sunlight is said to be the best of disinfectants.” This couldn’t be more true today—or more lacking.
Sincerely,
Trevor Potter
President, Campaign Legal Center
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