President Trump’s 2020 re-election campaign is a political juggernaut that has taken control of much of the Republican Party’s data-collecting and fund-raising infrastructure. And according to one of the nation’s foremost election law watchdogs, it may also be evading the law in unprecedented fashion.
A complaint filed with the Federal Election Commission Tuesday by the nonpartisan Campaign Legal Center asserts that the Trump campaign and its joint fundraising committee with the R.N.C., the Trump Make America Great Again Committee, have violated federal election reporting requirements.
Specifically, the center is alleging that the Trump campaign is out of step with an anti-corruption provision of the Federal Election Campaign Act that states campaigns must disclose the name and address of each person or corporate entity to whom an expenditure in excess of $200 is made, “together with the date, amount, and purpose” of those expenditures.
Senior Trump campaign officials, the complaint alleges, have “disguised over $170 million dollars of campaign spending by laundering the funds through firms headed by Trump’s recent campaign manager, Brad Parscale” and other Trump campaign officials—including Sean Dollman, the Trump campaign’s director of operations, and Alex Cannon, a special counsel to the campaign. (Parscale, who was recently demoted, has a new role as senior campaign adviser for data and digital operations.)
“The Trump campaign is violating the law,” Trevor Potter, a Republican and a former chairman of the FEC, told VICE News. “They are hiding information they are required to provide to the public.”
In the official language of campaign finance, corporations that receive campaign payments are called “vendors.” They are the law firms, ad firms, software and data companies, and the political consultancies that campaigns work with. The FEC generally does not require that a campaign separately report the payments its vendors make to subcontractors, as long as the campaign has what it has called an “arm's-length” relationship with that vendor and the subcontractor is not working under the direction or control of the campaign.
The Campaign Legal Center’s complaint asserts, however, that the Trump-aligned firms merely “serve as conduits that receive millions in payments from the campaign and disburse the funds to the campaign’s ultimate vendors, thereby concealing the campaign’s transactions with those vendors. Available information indicates that the ultimate vendors are effectively working under the direction and control of the campaign, and are providing services to the campaign rather than to Parscale’s conduit firms.”
In a statement provided to VICE News, Tim Murtaugh, the communications director for President Trump's reelection campaign, did not directly address the allegations put forth in the complaint, but said that the campaign “complies with all campaign finance laws and FEC regulations.”
Trevor Potter, the president of the Campaign Legal Center—a Republican and a former chairman of the FEC—told VICE News that by running the majority of their expenditures through two companies that senior campaign officials seem to run themselves, the Trump team’s network is able to hide exactly how they are operating and who they are paying.
“The Trump campaign is violating the law,” Potter, who was appointed to the FEC in 1991 by George H.W. Bush and served as general counsel to John McCain’s 2000 and 2008 presidential campaigns, said in an interview. “They are hiding information they are required to provide to the public.”
It’s unclear how the FEC—which is known for being cautious and currently lacks the “quorum” of four commissioners it needs to fully enforce laws or close loopholes—will handle the complaint. But there are cases in which the agency has taken civil action against campaign committees that used middlemen vendors to intentionally obfuscate payments to what the agency calls “ultimate payees.”
The firm referenced in the complaint, American Made Media Consultants, or A.M.M.C., is by far the largest recipient of Trump campaign spending. A.M.M.C., when paired with Parscale Strategy (Parscale’s flagship political consulting firm), accounts for over 80 percent of the Trump campaign’s spending in June, and anywhere from 40 to 60 percent of the campaign’s entire spending so far in the 2020 election cycle overall, according to the Campaign Legal Center’s analysis.
“AMMC is a campaign vendor responsible for arranging and executing media buys and related services at fair market value,” Murtaugh said. “AMMC does not earn any commissions or fees. It builds efficiencies and saves the campaign money by providing these in-house services that otherwise would be done by outside vendors. The campaign reports all payments to AMMC as required by the FEC.”
Potter, when pressed on how other federal campaigns have pushed the boundaries of election law in the recent past, argued that the Trump campaign’s structure “is not normal” in either scale or brazenness. “I can say I’ve never seen numbers like this,” he said. “This percentage of spending, which is essentially off the books, is unprecedented.”
To facilitate its abnormal structure, the Trump campaign appears to be aggressively using that FEC loophole in which campaigns often don’t have to report the payments their vendors make to subcontractors. The center, in essence, is accusing the campaign of taking this to a legally questionable extreme by reporting the majority of its spending to the FEC as direct payments to A.M.M.C. (and a smaller share to Parscale Strategy), for services such as “placed media,” “online advertising,” or “strategy consulting,” then having A.M.M.C. make payments to people and companies actually working at the direction of the Trump campaign.
The public, outside of leaks and reporting, is largely left in the dark about the scores of people and entities being subcontracted because so many third-party payments are undisclosed in the campaign’s federal filings. Some run-of-the-mill spending such as salary payments to senior officials—including Parscale, Bill Stepien, the new campaign manager, and Gary Coby, the digital director—do not appear on FEC reports either.
Anna Massoglia, a researcher at the Center for Responsive Politics, said the “lack of transparency around payment streams” raises the question of whether people in the Trump team’s orbit may be paying several top staffers, or their associates, extraordinary amounts of money through its vendor firms.
Earlier reporting has indicated Trump family members and associates like Lara Trump, Kimberly Guilfoyle, the girlfriend of eldest son Donald Trump Jr., and Lara Trump, wife of middle son Eric Trump, are already being paid large sums by the campaign through Parscale Strategy.
Public speculation about the Trump team possibly spending money in ways voters would find unsavory will only grow, she said, if the campaign maintains its current structure. “If their activities are above board,” Massoglia said. “They have nothing to worry about.”
“The first thing that comes to mind is: Why are they not disclosing this?” asked Craig Holman, an expert on campaign finance and governmental ethics at the left-leaning nonprofit Public Citizen. “I would immediately suspect that it’s because this money is being allocated to places it should not be allocated to. At over a 100 million dollars, this isn’t poor record keeping.”
Holman, and other campaign finance experts interviewed, imagined troublesome scenarios of what the Trump campaign’s network could be shielding from public view.
Brendan Fischer, the director of federal reform at the Campaign Legal Center, said it’s possible that the Trump campaign could be filtering even larger sums of money to Trump-related companies than has been previously reported—and that the campaign could be rerouting expenditures to avoid the bad press of having more self-serving spending come into view.
Potter, for his part, expressed worry that the unknown roots of much of the Trump campaign’s spending could be hiding suspicious online activity. The Trump campaign’s relationship with the digital firm Cambridge Analytica in the last presidential cycle sparked scandal once it became clear that Cambridge Analytica had harvested private information from the Facebook profiles of more than 50 million users without permission.
“Who are they using this year?” Potter wondered. “Is it something that looks like that?”
The F.E.C. has punished political campaigns and their staffers in the past for disguising payments. In a recent instance, the F.E.C. fined the 2012 presidential campaign of former Republican Representative Michele Bachmann after it paid an Iowa state senator for an endorsement and routed the payments through a conduit entity.
According to the Campaign Legal Center’s research, led by senior researcher Margaret Christ, neither the Biden campaign nor the campaigns of Trump’s predecessor, Barack Obama, have engaged in similar obfuscation. But there is one somewhat analogous case: Hillary Clinton’s 2016 presidential campaign.
In 2017, the Campaign Legal Center filed a civil complaint against the Clinton campaign for failing to forthrightly disclose the purpose and recipient of payments for the infamous Trump-Russia dossier. The Clinton campaign paid the opposition research firm Fusion GPS for its dossier services, but routed the money through the Washington law firm Perkins Coie, a more banal seeming vendor, listing the payments in FEC filings as “legal services.”
Still, Potter said the Trump re-election campaign’s operational structure that has cloaked much of its spending dwarfs the money spent on Fusion GPS by Hillary for America in 2016.
It’s unclear whether the recently demoted Parscale will still be involved in helping the Trump campaign run A.M.M.C.—a firm that Parscale helped set up. It’s also unclear whether his own firm, Parscale Strategy, also central to the campaign, will continue to play a central role in doling out donor-funded campaign payments to people and vendors.
The ultimate conundrum created by the Trump campaign’s historically sparse and irregular filings about its spending is that it creates a wide-ranging set of unknown unknowns during a time when public trust in President Trump and in the fairness of elections are both at lows. The Campaign Legal Center’s complaint is that the Trump campaign is breaking a transparency-focused disclosure law and not to its knowledge breaking other election laws. Still, it seems watchdogs will remain highly suspicious of the Trump team’s underlying conduct as long as it keeps up its opaque, boundary-pushing structures.
“The people, either the press or any citizen who wants to look at FEC reports, should not have to play Sherlock Holmes and put together a web of outside information—and by its nature speculation—to figure out where this is going,” Potter said. “That’s the campaign’s job.”
This post has been updated to note the Campaign Legal Center’s complaint has now been filed.