The Federal Election Campaign Act (FECA) requires federal political committees to disclose comprehensive details about their spending, including the name of each person that receives a campaign expenditure or other payment above $200 along with the amounts, dates and purposes of those payments.
The FEC has made clear that this reporting requirement can apply even when a political committee routes the spending through another entity. In particular, a political committee must disclose information about the ultimate recipient of its spending if (1) the intermediary through which it routed that spending does not have an arm’s-length relationship with the committee or (2) the intermediary merely acted as a conduit for payments to the ultimate payee.
In other words, campaigns can’t evade disclosure by funneling payments through intermediaries.
In July 2020, CLC filed an administrative complaint with the FEC alleging that then-President Donald Trump’s 2020 presidential campaign committee and an associated fundraising committee had violated these reporting requirements. Drawing on media reports and public records, the complaint (which CLC supplemented in January 2021) alleged that the committees had funneled payments to vendors through two firms with close ties to the campaign without disclosing the details of the ultimate payments as required by FECA.
One of the businesses, American Made Media Consultants (AMMC), was apparently created by Trump campaign officials. The other, Parscale Strategy, is the consulting firm of former Trump campaign manager Brad Parscale. CLC’s administrative complaint therefore alleged that Trump’s political committees did not have an arm’s-length relationship with either firm.
In addition, CLC’s filings alleged that both AMMC and Parscale Strategy functioned as conduits through which the campaign paid vendors and staff that were working for the campaign. Parscale Strategy, for example, reportedly paid the salaries of several campaign officials, including Kimberly Guilfoyle and Lara Trump.
Because both AMMC and Parscale Strategy had close ties to the two Trump committees and served merely as conduits for payments to campaign vendors, FECA required the committees to disclose the details of the ultimate payments to the vendors — not just the top-level payments to AMMC and Parscale Strategy.
But rather than comply with this requirement, the committees reported only unitemized bulk payments to AMMC and Parscale Strategy, hiding the details of the committees’ spending from public scrutiny.
If the FEC fails to act on an administrative complaint within 120 days, the complainant can ask a court to declare this inaction contrary to law. Pursuant to this provision — and after waiting over 600 days for the FEC to act on its administrative complaint — CLC sued the agency in March 2022, asking a District of Columbia federal court to order the FEC to act on its administrative complaint.
What’s at Stake
As the U.S. Supreme Court has explained, disclosure of campaign finance information serves a vital purpose: equipping voters with the knowledge necessary “to make informed decisions” when evaluating candidates and their messages. By allowing the Trump committees to conceal their spending, the FEC leaves voters in the dark about those committees’ activities and invites future campaigns to similarly evade transparency requirements.
The FEC has a responsibility to ensure there is transparency and accountability in our elections by investigating and acting on potential FECA violations like those alleged in CLC’s administrative filings.