“Donald Can’t Afford His Own Ego Trip”: Does Donald Trump Even Have $45 Million To Repay His ‘Loans’?
A few weeks ago, the Trump campaign tried to quash rumors of its financial demise by announcing that Trump would write off the $45 million in loans he had used to “self-fund” his campaign.
Trump spokes Hope Hicks says Trump will submit signed statement today to FEC forgiving $50 mil personal loan per legal requirement.
— Beth Reinhard (@bethreinhard) June 23, 2016
After that statement, a far-too-small-handful of political journalists responded: Show us the money.
Why? As The National Memo has reported, since Trump began bragging about his financial independence, “self-funding” doesn’t really mean self-funding. It’s a talking point: Trump can repay his loans with donations from supporters at any time before the Republican convention and walk away from this campaign having pulled off the most cost-efficient advertising campaign in history.
So far, that seems to be the case. According to NBC News, whose Ari Melber has tracked the promise in recent days, the FEC maintains that Trump hasn’t converted any of his loans into donations, and the Trump campaign itself is refusing to release any documentation that would prove Trump has donated his campaign anything.
Campaign spokesperson Hope Hicks told NBC that the paperwork “will be filed with the next regularly scheduled FEC report [on July 20],” but declined to provide any documentation proving that claim.
Of course, that’s what she did last time.
In the meantime, what about the rest of Trump’s campaign? HIs fundraising efforts may have just broken federal law, and it is currently tens of millions of dollars in debt on top of what Trump has promised to pay. By all financial measures, billionaire Donald can’t afford his own ego trip.
By: Matt Shuham, The National Memo, June 30, 2016
“Trump Campaign Branding Scheme”: This Isn’t New; Donald Trump Has Been Profiting Off His Campaign For Months
Donald Trump’s spectacularly bad fundraising report for the month of May, published over the weekend, got a lot of attention. The press picked apart the document, reporting on the lavish amounts of money Trump has paid his own companies, his family’s companies, and his political allies.
“Trump’s campaign spends $6 million with Trump companies,” the Associated Press reported.
But if the media wanted to find evidence of possible wrongdoing, or at least of an extremely bizarre campaign finance regimen, they needn’t have waited until now: Trump, his family, and his associates have been profiting off of this campaign for months.
In February, the New York Times reported that, of the 12.4 million the Trump campaign had spent in 2015,
About $2.7 million more was paid to at least seven companies Mr. Trump owns or to people who work for his real estate and branding empire, repaying them for services provided to his campaign. That total included more than $2 million for flights on his own planes and helicopter, a quarter of a million dollars to his Fifth Avenue office tower, and even $66,000 to Keith Schiller, his bodyguard and the head of security at the Trump Organization.
We reported back in March that, in January, Trump had spent around six percent of total campaign expenditures on Trump businesses, and the salaries of Trump employees.
In May, Forbes reported that, through the end of March, Trump had paid Trump-owned businesses $4.3 million, or 10 percent of total campaign expenditures through that date.
And now, through May, we know that of the $63 million the Trump campaign has spent this election cycle, 10 percent has been spent on Trump-owned organizations, in keeping with the trend this whole time.
Trump’s campaign expenses happen to be with businesses he owns or is affiliated with. A look at the list of top Trump campaign vendors is telling: Aside from Rick Reed media, a GOP advertising group, most are in some way Trump-related.
Tag Air is the Trump-owned company that operates his private jet. $4.3 million.
Ace Specialties, who manufacture the “Make America Great Again” hats, is owned by Christl Mahfouz, who the Wall Street Journal reported in October serves on the board of the Eric J. Trump foundation. $4 million.
WizBang solutions is run by the Mike Ciletti, the former head of the Make America Great Again PAC, which the Trump campaign disavowed after pressure from the media. They do “printing and design services,” according to the Washington Post. Mike Ciletti is a close business associate of Corey Lewandowski, Trump’s recently-fired campaign manager. $2 million.
And on and on and on: You get the point. When Trump isn’t funneling donor dollars and his own loans to Trump organizations or employees, he’s spending them on the companies of close associates and friends.
And he can pay those “loans” back to himself using donor dollars, as long as he does it before the Republican National Convention in July. Can Donald Trump afford to lose the $45 million he has loaned his campaign so far? We can’t know for sure, especially without seeing his tax returns… Trump did wonder aloud, in May: “Do I want to sell a couple of buildings and self-fund? I don’t know that I want to do that necessarily.”
So, we’ll see. Keep your eyes on the FEC filings.
But now that Trump has dropped all pretense of “self-funding” his general election campaign, this whole branding scheme may get a bit more complicated. Trump loaned his campaign $11.5 million in March, his largest one-month loan. After that, his monthly contributions started decreasing: $7.5 million in April, and just $2.2 million in May.
May was the first month the Trump campaign took in more from donations ($3.1 million) than it did from Trump’s loans.
That’s meaningful. As Ciara Torres-Spelliscy, an election law expert at the Brennan Center for Justice, noted in a New York Times article published yesterday, “as soon as you start using campaign money that has come in from donors, not just the money that he has loaned to himself, and he uses it for something that he will personally keep, or his family will personally keep, that is what crosses the line.”
By: Matt Shuham, The National Memo, June 22, 2016
“Gaming Election Laws”: Donald Trump’s Right That The Game Is Rigged—For Him To Make Money By Running
Win or lose, Donald Trump appears poised to come out ahead financially from his run for the White House thanks to campaign finance laws that, as he has pointed out, were not written with candidates of great wealth in mind.
Those laws let Trump shift many of his lifestyle costs to his campaign and earn a tidy profit, as we shall see.
The commercialization of the presidency is a modern development. When Harry S. Truman left the White House he had to live on his $112 a month (about $1,120 a month in today’s money) World War I army pension.
The big money for former presidents started with Gerald Ford, the only appointee to that post who turned his 29 months in office into a lucrative post-White House career making public appearances. Ronald Reagan upped the ante by collecting $2 million for speeches in Japan alone after he left the White House, plus much more money from other speeches and book royalties.
The full potential of the entrepreneurial ex-president, though, came when Bill Clinton left the White House. Together with his wife, Hillary, who hopes to be the next president, the couple raked in more than $153 million in speaking fees alone. She made $21 million from 91 speeches—with most of the money coming from Wall Street firms.
But Trump has figured out how to profit not by becoming president but merely by declaring himself a candidate—fulfilling his own prediction from 16 years ago, when he was running as the candidate of the tiny Reform Party, and told Fortune magazine: “It’s very possible that I could be the first presidential candidate to run and make money on it.”
At the time, Trump had a deal with Tony Robbins, the traveling motivational speaker, to deliver 10 speeches for $1 million. Trump coordinated his campaign stops with the speeches, boasting that this meant he was “making a lot of money” from flying his 1969 model Boeing 727 to campaign events.
He may be making lots more money this time. Here’s how: Federal law builds in a profit for a candidate who owns his own aircraft by requiring them to charge the campaign charter rates, which include a profit.
Most candidates hire planes, services, and equipment as needed during a campaign, giving them an incentive to get the lowest price so they have more money free to spend on television commercials, consultants, and get-out-the-vote drives.
But someone who must bear the ongoing cost of a private jet and helicopter, or a building, has an incentive to shift as much of the costs as possible to the campaign.
The same is true for shifting to the campaign the salaries and fringe benefits paid to bodyguards, which Trump has employed for at least 30 years.
If enough donations come in from supporters, Trump’s campaign can relieve Trump of much of the multimillion-dollar annual costs of his Boeing 757-200 jet—complete with gold-plated seatbelts, dining room, two bedrooms, and shower—and Sikorsky S-76 helicopter.
Trump claims he paid $100 million in 2011 for his 1991 model plane. At the time, aircraft brokers listed such planes for about $20 million, although they were outfitted for commercial airline service. Current prices are in the neighborhood of $10 million.
By putting that astronomical value on his plane, he can justify—assuming he’s put that number in his tax returns, which he’s yet to release, and not just his public bragging—a much higher charter rate, one that’s now paid to Trump by the Trump campaign.
All told, Trump’s Federal Election Commission spending reports show payments of $3.2 million to Trump Air Group (TAG), the Florida firm that operates his aircraft. That is almost 10 percent of the $33.4 million the campaign spent through February.
For comparison, Hillary Clinton, who has traveled much more extensively on the campaign trail, has spent about $2.5 million chartering jets. That is less than 2 percent of the $129 million her campaign has reported spending.
Donations have covered about 29 percent of Trump’s roughly $12,500 per day in aircraft costs. The rest is in the form of loans Trump made to the campaign, which may eventually be paid off with future donations.
Federal law says candidates who own their own aircraft must charge their campaign “the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size.”
Data from Boeing, analyzed by flight companies, suggests operating costs in the range of $8,000 to $9,000 per flight-hour when jet fuel prices were double current levels.
Charles Williams, editor of a British website which analyzes airline industry costs, and several charter operators put the hourly operating costs of a 757-200 in that range with charter flights starting at about $14,000 an hour. The chief sales agent for one charter firm told me that charges for blinged-out 757 like Trump’s could be as much as $30,000 per flight-hour.
Williams said the charter fees Trump charges the campaign, after a back of the envelope analysis using the limited data available from the campaign, seem reasonable.
So each hour Trump flies his jet to and from campaign events he both relieves himself of part of the burden of the plane’s fixed costs and turns a profit of several thousand dollars.
The law’s reference to “a comparable plane of comparable size” also suggests that Trump can charge a much higher than typical price for a Boeing 757 because he asserts it is the most fancily decked out private aircraft of its kind.
That’s right: He’s found the alchemist’s recipe for turning glitz into cash.
The campaign has also rented space in Trump Tower and rooms from Trump-branded hotels—both of which can legally charge rates that include a normal profit.
America would benefit from politicians as public servants and not from a campaign of presidency for profit.
By: David Cay Johnston, The Daily Beast, April 19, 2016
“5 Down-And-Dirty Tricks Ted Cruz Uses To Fool Voters”: Trusted, As Transparent A Ploy As The Rest Of His Campaign
Ted Cruz is nasty. Ted Cruz is mean. Ted Cruz is “a huge asshole.”
Ted Cruz is a pretty horrible human being.
That’s the consensus, at least, from notables like former President George W. Bush and and Lt. Gen. Sean MacFarland, commander of the coalition against ISIS.
Cruz has had to wheedle his family to get them to acquiesce – on camera! – that he’s a good guy, even though everyone from his former college roommate to his senatorial colleagues have whispered and shouted that the American public should stay far, far away from this loathsome, odious creature. (Even his “friends” in the Senate don’t want him to be president.)
Now, he’s tasked with saving us from The Donald — a role that, though potentially heroic, has managed only to force Cruz into a spotlight under which his seediness seems to have adopted a new shine. If Donald Trump is America’s premier insult comic, Ted Cruz is its greatest scoundrel. He lies, deceives, and swindles some more. To wit:
He lied about Ben Carson exiting the race
Dr. Ben Carson decided to not to campaign in New Hampshire and South Carolina after the Iowa Caucus, preferring to return to Florida to (yes, really) get a change of clothes. The Cruz campaign, as detailed by Politifact, took this nugget – that Carson was taking “a very unusual” travel detour – and spun it so that Carson was “taking some time off” from the campaign.
In a series of tweets, emails and voicemails (and with some assistance from Iowa Congressman Steve King) the campaign inferred and then explicitly stated that Carson had dropped out of the race, which was not the case, and urged caucus-goers to “not waste a vote” on Carson, but instead to vote for Cruz.
Although Cruz apologized, his campaign did acknowledge that “it made a coordinated effort to spread the story.” He ended up winning Iowa, leaving Donald Trump to accuse him of stealing the election.
He used false data and social pressure to trick Iowa residents into voting for him
In another play for Iowa Caucus voters, the Cruz campaign sent out mailers meant to look like official documents warning voters that their participation – or lack thereof – would be recorded and sent to their neighbors, in addition to assigning a grade that matched up with their alleged voting history. Using well-known political science research, the mailers (as seen below), preyed upon voters’ fears of social pressure to get them to vote.
.@TedCruz campaign mailed #IowaCaucus voters misleading “violation” https://t.co/PayPAJ84aR https://t.co/StcKy2N0F8 pic.twitter.com/hlzXJV8fIT
— Alex Howard (@digiphile) January 31, 2016
Of course, the “grades” listed on the mailers were all low scores — most of them “F”s:
Man, @TedCruz is such a scumbag (and so is his campaign staffer who thought this was a good idea) #iacaucus pic.twitter.com/5ybjhbZdA5
— super delegator (@LoganJames) January 30, 2016
The mailers used fraudulent “data” – the Cruz campaign made up percentages – and erroneously attributed this “data” to the Iowa Secretary of State and county election clerks, which prompted Iowa’s Secretary of State, Paul D. Pate, to correct the record:
Accusing citizens of Iowa of a “voting violation” based on Iowa Caucus participation, or lack thereof, is false representation of an official act. There is no such thing as an election violation related to frequency of voting. Any insinuation or statement to the contrary is wrong and I believe it is not in keeping in the spirit of the Iowa Caucuses.
Additionally, the Iowa Secretary of State’s Office never “grades” voters. Nor does the Secretary of State maintain records related to Iowa Caucus participation. Caucuses are organized and directed by the state political parties, not the Secretary of State, nor local elections officials. Also, the Iowa Secretary of State does not “distribute” voter records. They are available for purchase for political purposes only, under Iowa Code.” – Paul D. Pate, Iowa Secretary of State
While the tactic has been used before – and an online version of it is being used in China – Cruz takes it to another level. And it’s not something he apologizes for.
He mailed pre-filled “checks” and asked recipients to match them
According to the Huffington Post, the Cruz campaign mailed fake checks across the country to prospective voters meant to entice them to donate money by saying their contribution would be “matched” by “a group of generous supporters.” It was misleading enough for one group to file a complaint with the state attorney general for allegedly violating state law.
The Intercept reports that this tactic “is either impossible, illegal, or a scam,” since individual donations are legally capped at $2,700 for both the primary and general elections ($5,400 total) and the Cruz campaign would need a lot of “generous supporters” willing and able to “match” donations.
That means that the Cruz campaign either disregarded campaign finance law or is funneling all of the money they receive into a super PAC – which would also be illegal. “Super PACs … are allowed to accept unlimited contributions as long as they don’t coordinate directly with campaigns,” reporters Dan Froomkin and Zaid Jilani wrote. The law is explicit in what that means: Candidates running for national office “are not allowed to solicit more than $5,000 in Super PAC contributions from any one person.”
The Cruz campaign, however, is relentless. One mailer with a fake check isn’t enough – there are followups upon followups upon followups – post-its and emails and emails and emails and emails. Cruz tries to come across as casual: The sender’s line is doctored to make it appear that the message was quickly sent from his iPhone. But the barrage of emails instead comes off as desperate, edging on creepy.
His app takes your data and tries to sell your friends onto the “Cruz Crew”
Ted Cruz knows how to work Big Data. On his app, available on both the App Store and Google Play, users have to opt-out of sharing sensitive data, which includes their contact information and their location. This makes it easy for the campaign to amass a trove of sensitive and lucrative information, which it shares with other organizations and analytics companies to better finesse the messages it sends to potential supporters and voters.
The analytics company behind the Cruz operation, Cambridge Analytica, is funded by Robert Mercer, a hedge-fund investor, computer scientist, and the fourth-largest Republican donor in 2014 – and a major backer of Cruz. Mercer has donated at least $11 million to Cruz-related super PACs.
The campaign also uses sophisticated gaming techniques to entice app users to participate, allotting points for specific actions, like sharing messages on social media.
Cambridge Analytica’s formidable system analyzes billions of data points – from voter rolls to Facebook likes, keychain reward programs to Amazon purchases – and then sorts users into one of five personality types, which they use to target messages to the user’s lifestyle, interests, and backgrounds. These discoveries are shared among different departments within the organization, so that a canvasser knocking on doors already knows what the little old lady in the pink house on the corner really purchases at Target.
He photoshopped a beaming Marco Rubio shaking hands with Barack Obama
The Cruz campaign published a website targeting rival Marco Rubio with a doctored photo of him shaking hands with President Obama, captioned with text suggesting it was related to the Trans-Pacific Partnership.
When challenged, the Cruz campaign merely shrugged their shoulders, saying it was no big deal; they even gave away their process: “We googled ‘two people supporting amnesty,’” said campaign spokesperson Brian Phillips in an email to Politico.
Ted Cruz is sneaky and smart, and he’s using all the techniques and terabytes he can to stomp his way to the presidency. He likes to stand behind banners that say Trusted. But to those paying attention, the phrase is as transparent a ploy as the rest of his campaign.
By: Stephanie Schwartz, The National Memo, February 21, 2016
“Did Ben Carson Already Break Campaign Law?”: Campaign Law Bars Corporations From Donating To Presidential Candidates
On October 9, Ben Carson appeared at the National Press Club to promote his new book. His campaign manager, Barry Bennett, told The Daily Beast that Carson’s publishing company set up the event and paid for his transportation to D.C. to speak there.
And just like that, Carson may have violated campaign finance law.
The Republican presidential candidate made headlines last week when ABC News reported that he would suspend his campaign for a tour promoting his new book, A More Perfect Union: What We The People Can Do To Reclaim Our Constitutional Liberties.
Carson’s team took issue with the story, saying his presidential campaign is still very much underway even though he’s making room in his schedule to sell books.
But here’s where it gets complicated.
Carson’s publishing company Sentinel—an imprint of Penguin publishing—is paying for the tour, according to Bennett. And that puts the former neurosurgeon in a tight spot.
Campaign law bars corporations from donating to presidential candidates—whether those donations are checks or in-kind contributions of goods or services. “Campaigns may not accept contributions made from the general treasury funds of corporations, labor organizations or national banks,” reads the FEC’s guide for candidates. (PDF)
That’s why it gets dicey (though not unheard of) when presidential candidates go on book tours; if the hotel stays, restaurant meals, and publicity associated with a book tour are paid for by the publishing company, candidates can get in trouble if they hold campaign events while traveling on that company’s dime.
According to Larry Noble, senior counsel for the Campaign Legal Center, Carson may have already broken that rule.
He said that the October 9 stop at the Press Club looked suspiciously campaign-related. The event was billed it as “NPC Luncheon with Dr. Ben Carson, Author and Presidential Candidate.” More troublesome is the fact that Carson used the appearance to explicitly tout his presidential ambitions.
“[U]nder a Carson administration, if another country attacks us with a cyber attack, they’re going to get hit so hard, it’s going to take them a long time to recover,” he said, according to a transcript of the speech (PDF) he gave there.
After the candidate’s remarks, National Press Club President John Hughes questioned Carson more about what he would do if he gets elected. Carson said he would work with Turkey to establish a no-fly zone over Syria and that he would call a joint session of Congress to tell them to “recognize that the people are at the pinnacle, and that we work for them, and they don’t work for us.”
All of that sounds way more like presidential politicking than book-selling.
“Even though he never says ‘Vote for me as president,’ he’s clearly discussing his candidacy. What he’s supposed to say in that situation is, ‘I‘m really not here to discuss my campaign for president; I’m here to to discuss my book,’” Noble said.
That, of course, is not what Carson said.
Noble added that if another campaign filed a complaint with the FEC regarding Carson’s comments at the Press Club, the commission would likely take that complaint seriously.
“They’d at least need to take a look at it,” he said.
Carson is not under investigation by the FEC but formal complaints can be filed by any person who spots a potential violation. The FEC doesn’t comment on the activity of candidates and has noted in the past that there is always a possibility that matters related to the campaign could come before the commission.
Bennett said he doesn’t think Carson has broken any FEC rules.
“The book publisher has attorneys and we have attorneys,” he said. “It was all vetted.”
A publicity contact for Sentinel has not yet returned a request for comment. We also left a voicemail for Premiere Collectibles, which is billed as promoting his tour, and didn’t get a response by press time.
Carson’s Press Club comments aren’t the only part of his book tour to worry campaign finance law watchdogs. Bennett confirmed to The Daily Beast that from October 4 to October 11, the publisher paid for Carson’s transportation and lodging because he was promoting his book. During this time, the candidate made the rounds on cable TV, discussing current events and his presidential campaign.
“My view is that multiple appearances by a candidate on talk shows to discuss politics amounts to campaign activity and, consequently, that the campaign should have paid some of the transportation and lodging expenses,” emailed Paul Ryan, a spokesperson for the Campaign Legal Center.
Ryan added that similar situations have divided the FEC.
“At any rate, the commission deadlocked so there’s no formal guidance from the commission on this point of law,” he said.
That means Carson stepped into a legal gray area every time he did interviews with political reporters during the week of October 4. Two days later he appeared on Fox and Friends to discuss his campaign.
“I don’t want to be the establishment candidate,” he said. “What has the establishment really gotten us?”
He added that he wouldn’t have met with the families of victims of the Umpqua shooting if he were president.
“I would have so many things on my agenda that I would go to the next one,” he said.
He also appeared on The View on October 6, The Kelly File later that day, and on Hannity on October 7.
This week Carson will juggle fundraising events and book tour stops in Texas, Oklahoma, Missouri, Kansas, Iowa, and Nebraska. On some days, like October 18, campaign events are wedged in between book tour stops. Next Sunday, Carson will promote his book in the Woodlands, Texas, at 2:30 p.m., hustle to a forum at a Baptist church in Plano at 5:25 p.m.—which is a campaign event—and get to San Antonio by 8 p.m. for another book stop. In an effort to avoid FEC violations, the campaign says staffers will only show up at the Plano pit stop.
“FEC rules and regulations call for the separation of campaign and non-campaign finances,” said Ying Ma, deputy communications director for the Carson campaign. “We’re trying to do our best to abide by all requirements. Campaign staff will be at campaign events. That’s what campaign staff do.”
By: Gideon Resnick and Betsy Woodruff, The Daily Beast, October 19, 2015
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