CLC v. FEC (Delay Suit—Trump Campaign Subvendor Reporting)

At a Glance

CLC has sued the FEC for its failure to act on CLC’s July 2020 administrative complaint alleging that then-President Trump’s 2020 presidential campaign committee (and an associated fundraising committee) violated federal campaign finance transparency requirements by routing hundreds of millions of dollars in campaign spending through intermediaries without disclosing the ultimate payees.

Status
Closed
Updated
Issues
Campaign Finance
About This Case/Action

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.

Plaintiffs

CLC

Defendant

FEC

Campaign Legal Center Files Lawsuit Against the FEC for Failure to Enforce the Law in Light of Violations by the Trump Campaign

Date
Body

CLC’s underlying complaint alleges that the Trump campaign violated federal campaign finance law by funneling payments to staff and vendors through firms affiliated with the campaign, hiding the details of those payments from the public.

WASHINGTON, D.C. – Today, Campaign Legal Center (CLC) sued the Federal Election Commission (FEC) after the Commission unlawfully failed to act for over 20 months on an administrative complaint CLC filed against the campaign committees of former President Donald Trump.

Federal law requires candidates for federal office and their authorized campaign committees to disclose their spending, including the names of payees and the amount, date and purpose of each expenditure. By routing payments to undisclosed subvendors through two firms — American Made Media Consultants (AMMC) and Parscale Strategy — the Trump campaign denied voters essential information about where it was spending its money. The FEC’s inability to hold the campaign accountable for such a blatant violation of federal law is just the latest example of the agency failing to do its job.

“The repeated failure of the FEC to enforce campaign finance laws has resulted in an explosion of secret spending, and as a result, our politics are increasingly rigged in favor of special interests,” said Trevor Potter, president of CLC and a Republican former Chairman of the FEC. “The law here is clear: voters have a right to know whom a campaign is paying and how much and for what they are being paid. This is vital knowledge for those looking to make informed decisions when evaluating candidates and their messages.”

Seeking to remedy violations of federal campaign finance law, CLC filed an initial complaint in July 2020 and supplemented it in January 2021, drawing evidence from media reports and public records to detail the way in which both AMMC and Parscale Strategy functioned as conduits through which the Trump campaign paid undisclosed vendors and staff.

These allegations warranted a prompt response by the FEC but instead resulted in yet another failure by the FEC – the only government agency whose sole responsibility is overseeing the integrity of our political campaigns – to do its job.

CLC has, once again, been compelled to take legal action against the FEC to ensure voters have access to the information they are entitled to by federal law.   

At Campaign Legal Center, we are advancing democracy through law. Learn more about our work.

Issues
Campaign Finance

CLC President Speaks Out on Anti-Democracy Bill in Georgia

Date
Body

WASHINGTON , D.C. — Trevor Potter, founder and president of Campaign Legal Center and Republican former chairman of the Federal Election Commission, issued the following statement ahead of a Georgia Senate hearing on H.B. 1464 set to take place tomorrow:

“Our democracy works best when all eligible voters can freely participate and feel confident in the election results. When partisan politicians rewrite our election laws in a way that restricts the freedom to vote and undermines confidence in our elections, our democracy suffers.

We are especially concerned about provisions in H.B. 1464 that allow the Georgia Bureau of Investigations to intrude in the elections process in a departure from normal review procedures, require any donation or gift – including food and water for voters – to be approved and distributed by the State Elections Board, and a provision that decreases the number of voting machines at each precinct.” 

Issues
Voting and Elections

Campaign Legal Center Seeks Enforcement of the Ban on Committee Staff Stock Holdings

Date
Body

Washington, D.C. — Campaign Legal Center (CLC) on Thursday, March 17, sent a formal letter to the Senate Select Committee on Ethics, asking the committee to disclose whether it authorized senior committee staff members’ stock holdings that appear to violate Senate rules pertaining to conflicts of interest.

While members of Congress have received significant public scrutiny for allegedly trading stock based on nonpublic information they receive in their official capacity, an overlooked rule that bans committee staff from owning certain stock reveals that conflicts of interest are not unique to those sent there by voters.

“Voters have a right to know whether elected officials and their most influential senior staff are prioritizing the needs of the public or their own stock portfolios,” said Kedric Payne, vice president and senior director of Ethics at Campaign Legal Center. “When senior staffers own stock in companies within the jurisdiction of their committee, there is a clear opportunity for conflicts of interest."

Although members of Congress can own any stock, senior level Senate committee staff are restricted in owning stock, under a rule separate from the Stop Trading on Congressional Knowledge (STOCK) Act.

The Senate committee-staff stock ban — Senate Rule 37.7 — prohibits committee staff from trading stocks in companies that fall under their committee’s jurisdiction. Recent research by CLC found committee staff who may have violated the ban. The Senate Ethics Committee can issue waivers for this rule, but these waivers are not public. Consequently, there is no transparency regarding compliance with this rule, and it appears underenforced.

The lack of transparency and enforcement on these clear conflicts of interest is problematic and should be fixed.

As Congress prepares to hold hearings focused on clarifying and reforming the laws that regulate their own stock trading activities, they must also take steps to ensure congressional staff are also not privately benefitting from their positions.  

At Campaign Legal Center, we are advancing democracy through law. Learn more about our work.

Issues
Ethics
Subscribe to