Trump marketing campaign accused of masking $170 million in spending

U.S. President Donald Trump speaks to members of the media before boarding Marine One in Washington, D.C., on Monday, July 28, 2020.

Chris Kleponis | Polaris | Bloomberg | Getty Images

President Donald Trump’s reelection campaign violated the law by masking millions in spending, a nonprofit democracy group alleged in a complaint filed with the Federal Election Commission on Tuesday. 

The Campaign Legal Center said in the 81-page filing that the president’s reelection campaign and campaign committee hid $170 million in spending to major vendors as well as family members and associates by diverting the money through firms headed by Brad Parscale, who was replaced as campaign manager earlier this month, as well as other senior campaign officials. 

The nonprofit alleged that the campaign effectively laundered money in order to hide payments to contractors and advisors, including the maker of a campaign app, as well as Lara Trump, the president’s daughter-in-law, and Kimberly Guilfoyle, a former Fox News host who is dating the president’s son Donald Trump Jr. 

“This scheme flies in the face of transparency requirements mandated by federal law, and it leaves voters and donors in the dark about where the campaign’s funds are actually going,” said Trevor Potter, a former Republican FEC chair and the president of the Campaign Legal Center.

The complaint is unlikely to lead to any penalties. The FEC has just three confirmed commissioners, and it requires the vote of four in order to take action. Caroline Hunter, a Republican commissioner, resigned last month.

Trump campaign spokesman Tim Murtaugh said in a statement that “the campaign complies with all campaign finance laws and FEC regulations.”

The complaint alleges that the Trump campaign and the Trump Make America Great Again Committee have shielded their spending primarily through a clearinghouse firm called American Made Media Holding Corporation, whose directors include campaign operations director Sean Dollman and campaign counsel Alex Cannon.

Further spending was obscured through payments to Parscale’s consulting firm Parscale Strategy, it claims. 

Federal election law requires the disclosure of payments greater than $200, including to subcontractors if they are not sufficiently independent of the campaign. In the complaint, the Campaign Legal Center says the Trump campaign unlawfully evaded that requirement by “laundering the funds.”

“These schemes have disguised millions in payments to companies engaged in significant work for the campaign, as well as payments to Trump family members or senior campaign staff like Lara Trump and Kimberly Guilfoyle,” the complaint says.

“By failing to report payments to the campaign’s true vendors and employees, the Trump campaign and Trump Make America Great Again Committee have violated, and continue to violate, federal law’s transparency requirements and undermine the vital public information role that reporting is intended to serve,” it adds. 

The complaint alleges that the campaign has used American Made Media Holding Corporation to obscure payments made to the software developer Phunware for the creation of a campaign app.

Citing Phunware’s filings with the Securities and Exchange Commission, the Campaign Legal Center said that American Made Media has paid Phunware about $4 million in 2019 and 2020, making it Phunware’s “top client.” 

The complaint says that other companies the campaign has paid through American Made Media and failed to disclose to the FEC include Realtime Media, an agency run by Trump campaign digital director Gary Coby, Opn Sesame, a peer-to-peer text message company also run by Coby, and Harris Sikes Media, which placed the campaign’s $5.6 million Super Bowl advertisement.

Murtaugh said that American ade Media “is a campaign vendor responsible for arranging and executing media buys and related services at fair market value.”

“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,” Murtaugh said. 

The complaint cited media reporting that Parscale Strategy has been paying the salaries of Guilfoyle and Lara Trump, the wife of Eric Trump, the president’s son. According to the Campaign Legal Center, the campaign has paid Parscale Strategy more than $2 million in the 2020 cycle, including nearly $50,000 a month since the start of the year. 

While the campaign has reported payments to Parscale’s consulting firm, it has not “directly reported making any salary payments to campaign manager Brad Parscale, nor has it reported any salary payments to Kimberly Guilfoyle or Lara Trump,” the complaint reads.

Parscale was replaced at the top of the campaign earlier this month by Bill Stepien, who was formerly deputy campaign manager. 

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