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“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

July 1, 2016 Posted by | Campaign Finance Laws, Campaign Financing, Donald Trump | , , , , | Leave a comment

“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

April 20, 2016 Posted by | Campaign Finance Laws, Donald Trump, Presidential Elections, Tax Returns | , , , , , , , | 2 Comments

“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

October 21, 2015 Posted by | Ben Carson, Campaign Finance Laws, Presidential Candidates | , , , , , , | Leave a comment

“Using Loved Ones As Props To Bolster Political Ambitions”: GOP Must Stop This Charade And Apologize To Benghazi Families

What many thought was true has been confirmed this week: The GOP-created House Select Committee on Benghazi is nothing more than a partisan effort to hurt Hillary Clinton and help the Republicans in the 2016 presidential race.  At this point the House leadership should do the right thing and offer a public apology to the families of the four Americans killed in that terrorist attack for using their loved ones as props to bolster their political ambitions.  Plus the GOP House leadership should reimburse U.S. taxpayers for the nearly $5 million spent on this “investigation,” which in essence is nothing more than a negative campaign commercial against Hillary Clinton.

The committee’s charade first began to publicly unravel two weeks ago with the remarks of House majority leader Kevin McCarthy.  While in the comfy confines of Sean Hannity’s Fox News show, McCarthy made the case for how a Republican controlled Congress helps create a “strategy to fight and win” elections.

McCarthy, who at the time was still in the running for the House speakership, explained to Hannity, “Let me give you one example: Everybody thought Hillary Clinton was unbeatable, right?”  McCarthy then bragged, “But we put together a Benghazi special committee. A select committee. What are her numbers today? Her numbers are dropping. Why? Because she’s untrustable. But no one would have known any of that had happened had we not fought to make that happen.”

On one hand you have to applaud McCarthy for his brutal honesty. That ‘s rare today in Washington from politicians in either party.

But McCarthy was not the only Republican insider to tell us this week that the GOP committee is part and parcel of the Republican’s 2016 campaign to defeat Clinton. We heard that exact sentiment expressed in even greater detail Sunday morning by Maj. Bradley Podliska, a self-described conservative Republican, who served as an investigator for the committee for ten months.

Podliska explained to CNN’s Jake Tapper that the committee’s leaders’ obsession with Clinton was so acute that they pulled resources away from probes of other individuals and agencies to focus on the likely 2016 Democratic presidential nominee. This troubled Podliska, an intelligence officer, who joined the investigation “to get the truth to the victims’ families.” But he added, thanks to the GOP’s partisan agenda in conducting this investigation, “The victims’ families are not going to get the truth, and that’s the most unfortunate thing about this.”

The use of government apparatus to go after political enemies sounds like something right out of Richard Nixon’s’ playbook. The difference being that Nixon, when using agencies like the FBI and IRS as political weapons against his rivals, was less obvious and more secretive – until he got caught, of course.

Look, McCarthy and Podliska’s comments simply confirm what many have long believed about this committee’s agenda. After all, before this committee was created in May 2014, there already had been eight congressional investigations into the September 11, 2012 attack on the U.S. consulate in Benghazi, Libya, most headed by Republicans.

These thorough investigations answered all the questions surrounding the attack and offered recommendations to try to ensure another like this would not occur. For example, the Republican-led House Armed Services Committee report released in February 2014 definitively found that there was no “stand down” order ever given to the CIA or military (despite what Fox News will tell you) that prevented them from trying to save the four Americans killed.

Yet despite these extensive congressional hearings, including the testimony of Hillary Clinton, hundreds of pages in reports generated by both GOP-led and bipartisan committees like the U.S. Senate Select Committee on Intelligence’s report released in January 2014, and at a cost of millions of taxpayer dollars, the GOP-controlled House authorized the current investigation.

At this point, the House select committee’s investigation into Benghazi has spanned more time than the congressional hearings on Watergate and the Warren Commission’s probe into the assassination of President Kennedy, and they are now just two months shy of surpassing the time it took to complete the 9/11 Commission’s investigation.

Now just so it’s clear, some of the Benghazi investigations already conducted have pointed fingers at the State Department and White House. For example, the bipartisan U.S. Senate report concluded that the attack could have been prevented and singled out the State Department for failing to bolster security.  That’s certainly a legitimate issue and no doubt it will be raised in the 2016 campaign if Clinton wins the nomination.

But the current House investigation is politics at its worst. They are using the memory of the four brave Americans killed, Ambassador Christopher Stevens, Sean Smith, Tyrone Woods, and Glen Doherty, for political gain.

And not only should the House leadership reimburse U.S. taxpayers for the $4.5 million dollars spent by this committee, the Federal Election Commission should review the situation to determine if the money would be considered an “in kind” contribution to the Republican National Committee. There could be certain reporting requirements triggered if that were the case.

Hillary Clinton may still testify as planned on October 22 before this committee. If she does, I hope she asks the committee chair Trey Gowdy if he will apologize to the families of the dead Americans. It’s the least the Republicans can do after using the memories of four brave Americans to help bolster their political ambitions.


By: Dean Obeidallah, The Daily Beast, October 12, 2015

October 13, 2015 Posted by | Benghazi, Hillary Clinton, House Select Committee on Benghazi, Trey Gowdy | , , , , , , , , | Leave a comment

“One Million For Me, None For You”: How Carly Fiorina Screwed Her Campaign Staff And Paid Herself First

After Carly Fiorina’s unsuccessful 2010 run for Senate in California, it took her more than four years to fully pay staff and vendors for their work on her campaign to unseat Democratic Sen. Barbara Boxer.

But a review of Federal Election Commission records by The Daily Beast shows that Fiorina first paid herself back for more than $1.25 million in personal loans she made to the campaign, including a $1 million check on the day before Election Day. That check set the campaign back so far it was impossible to pay staff and vendors what they were owed for years.

Marty Wilson, Fiorina’s then-campaign manager, said Fiorina knew at the time that there would be debts at the end of the campaign, but that it was difficult to know how deep the debt would be.

“The problem with campaigns is you project debt based on what you think revenues are going to be,” Wilson said. “People say they are going to send money, but Election Day comes and goes, and you’ve lost, and those receivables don’t materialize.”

With more than $1 million out the door at the last minute and a shortfall in fundraising commitments, the campaign ended nearly $500,000 in debt, unable to pay vendors and staff, including Wilson, who was owed more than $60,000.

“We certainly talked to her after the campaign quite a bit about the nature of the debt, who the money was owed to, did some things to get some of the bills paid off after the election,” Wilson said. “Was I frustrated? Yes. But there were other people who were more frustrated than I was.”

The best part? This is totally, 100 percent legal.

Under federal law, self-funding candidates can spend unlimited money on their campaigns. Some donate the money outright, while others, like Fiorina, make loans to the campaign with the hopes of being paid back once the money is raised from other sources.

But the loans are not indefinite. The 2002 McCain-Feingold Act limits the window during which a candidate can be reimbursed for those candidate-sponsored loans, which could explain Fiorina’s haste to get at least some of her money back.

Paul S. Ryan, senior counsel at the Campaign Legal Center in Washington, D.C., said the law was supposed to keep lobbyists from paying candidates’ campaign expenses, but it also entices candidates to repay themselves quickly or never be paid back at all.

“The unfortunate thing in this scenario is that a bunch of other vendors and staff were seemingly shafted by this move,” said Ryan. “It’s not illegal, but one may draw their own conclusions about the type of person who would rather pay themselves back a loan, when they are free to spend as much money as they want on their campaign, rather than repay others who they owe money to.”

Even going into the campaign, it was clear the Senate bid would be a wildly expensive proposition for any Republican candidate. Fiorina, a first-time candidate who had made her name, and much of her estimated $120 million personal fortune at that time, as the CEO of Hewlett-Packard from 1999 until 2005, was no exception.

Although Fiorina’s run at HP was rocky, with more than 30,000 layoffs and a stock that lost more than half its value, Fiorina left with a $21 million payout and more than $20 million more in additional compensation.

Altogether, Fiorina financed nearly $7 million of the $21 million Senate campaign through personal loans to her campaign at 0 percent interest. In November 2009, she launched Carly for California and quickly pumped $2.5 million into the nascent Senate bid. She then repeatedly dipped into her personal fortune as the campaign went on, including a $1 million loan in the final weeks of the campaign to pay for a last-minute ad buy against Boxer.

Having declared all of her loans during the primary as a loss, Fiorina paid herself back in full for loans she made in the general election, using cash on hand to repay herself $250,000 two weeks before the election and $1 million on the day before Election Day.

Over the next four years, the Carly for California campaign pushed its debts back month after month after month, year after year. As Fiorina and her husband relocated to a multimillion-dollar Virginia estate and campaign treasurers came and went, the vendors and staff remained unpaid, including the widow of a close adviser who had died suddenly during her Senate bid.

Only as Fiorina began to publicly consider launching a presidential campaign in 2015 did she pay off her 2010 debts, quietly writing a personal check for $487,410 to finally pay the outstanding bills and close the Carly for California campaign.

Three months later, Carly for President launched, quickly raising $1.4 million for Fiorina’s presidential bid. But unlike Carly for California, the new campaign is making do without her personal fortune. So far, she and her husband, Frank, have given $2,700 each, the maximum allowed for any average donor.

That may be partially explained by Marty Wilson’s observation of Fiorina’s 2010 experience. “I don’t think anybody likes parting with a substantial percentage of their net worth for a speculative venture.”

The Carly for President campaign did not respond to a request for comment on this story.


By: Patricia Murphy, The Daily Beast, September 25, 2015

September 26, 2015 Posted by | Campaign Financing, Campaign Staffers, Carly Fiorina | , , , , , , , | 2 Comments

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