Campaign Legal Center (CLC) has filed a lawsuit in the District of Columbia federal court, challenging the Federal Election Commission’s (FEC) failure to act on an administrative complaint CLC filed against the campaign committees of then-President Donald Trump in July 2020 and supplemented in January 2021.
The underlying administrative complaint alleges that Trump’s 2020 campaign violated federal campaign finance transparency requirements by funneling payments to campaign staff and vendors through firms affiliated with the campaign, thereby hiding the details of those payments from the public.
CLC’s lawsuit, filed March 29, 2022, asks the court to declare that the FEC’s failure to act on the administrative complaint for over 20 months was unlawful and order the FEC to take action on the complaint.
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.
As the U.S. Supreme Court has explained, this disclosure serves a vital purpose: equipping voters with the knowledge necessary “to make informed decisions” when evaluating candidates and their messages.
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 circumvent reporting requirements by laundering payments through intermediaries.
If you believe that voters have a right to know how campaigns are spending to influence their votes, this makes sense: if campaigns could route all their spending through shell corporations or consulting firms, voters would be kept in the dark about that spending.
Drawing on a wealth of media reports and public records, CLC’s administrative complaint and subsequent supplement alleged that Trump’s 2020 presidential campaign (and an associated fundraising committee) violated these reporting requirements by funneling payments through two businesses.
These were American Made Media Consultants (AMMC), a corporation apparently created by Trump campaign officials, and Parscale Strategy, the consulting firm of former Trump campaign manager Brad Parscale.
The administrative filings first explained that neither AMMC nor Parscale Strategy had an arm’s-length relationship with the campaign. Media reports establish that campaign officials — including Trump’s son-in-law, Jared Kushner — oversaw AMMC’s founding and corporate governance. Parscale Strategy, meanwhile, was run by Trump’s campaign manager.
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.
But rather than disclosing these payments on their FEC reports as the law requires by itemizing the subvendor payments made through AMMC and Parscale Strategy, the campaign reported only unitemized bulk payments to the two firms.
Seeking to remedy these large-scale violations of transparency requirements, CLC filed its administrative complaint with the FEC — which has a mandate to enforce federal campaign finance law — in July 2020 and supplemented the complaint with additional information in January 2021.
Both filings alleged that the Trump campaign had violated federal disclosure requirements and asked the FEC to investigate the alleged violations and seek appropriate sanctions to deter future abuse of federal transparency laws.
These allegations — which involve brazen violations of critical transparency requirements and drew widespread public interest — warranted a prompt response by the FEC. But the agency failed to act, continuing a longstanding pattern of the FEC’s refusing to do its job.
This inaction has now forced CLC to ask a court to intervene and order the FEC to take action to ensure voters have access to the campaign finance information to which federal law entitles them.