Trump Events Raise the Question: Is It Business or Is It Political?

The GOP nominee has blurred the line on an unprecedented level, campaign experts say.

Donald Trump, accompanied by (from left) Donald Trump Jr., Tiffany Trump, Melania Trump, and Ivanka Trump, at the grand opening of the Trump International Hotel-Old Post Office in Washington on Oct. 26
AP Photo/ Evan Vucci
Alex Brown
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Alex Brown
Nov. 6, 2016, 8 p.m.

Don­ald Trump, pres­id­en­tial can­did­ate, has be­come quite the pitch­man for Don­ald Trump, busi­ness ty­coon.

By one count, the GOP nom­in­ee has held 32 events at his prop­er­ties dur­ing the cam­paign, of­ten blur­ring the line between cam­paign event and cor­por­ate pro­mo­tion. While Trump has ar­gued he’s us­ing his busi­ness suc­cess to prove his lead­er­ship cre­den­tials, oth­ers see him us­ing his polit­ic­al pro­file to boost his real es­tate em­pire.

“We’ve nev­er had a pres­id­en­tial can­did­ate be­fore who is so in­ter­twin­ing his busi­nesses with his cam­paign,” said Larry Noble, a long­time gen­er­al coun­sel at the Fed­er­al Elec­tion Com­mis­sion who now works at the Cam­paign Leg­al Cen­ter.

That could cre­ate head­aches at the FEC, which is tasked with en­sur­ing that can­did­ates don’t use polit­ic­al cash to en­hance their own wealth, while also pre­vent­ing can­did­ate-as­so­ci­ated busi­nesses from ef­fect­ively be­com­ing fronts for their cam­paign. FEC rules dic­tate that can­did­ates may use ser­vices provided by their own busi­nesses, but the cam­paign must pay the com­pany the ex­act mar­ket rate.

For ex­ample, a res­taur­ant own­er could have his fran­chise cater a polit­ic­al fun­draiser for his cam­paign, but provid­ing the food for free would con­sti­tute an il­leg­al cor­por­ate dona­tion. Over­pay­ing for the food would amount to us­ing cam­paign funds for per­son­al en­rich­ment. Trump, though, is op­er­at­ing in a much big­ger gray area, and on a much big­ger scale.

“He’s boldly gone where no one has gone be­fore,” said Bri­an Svoboda, a cam­paign fin­ance law­yer with Per­kins Coie. “It’s sort of a ‘heads I win, tails you lose’ situ­ation for him.”

The sys­tem works for Trump be­cause of what some see as a cir­cu­lar fin­an­cing scheme. “He’s put­ting his money in­to his cam­paign, then he’s pay­ing his com­pan­ies for the use of the prop­erty,” said former FEC Chair­man Mi­chael Toner, who now works as an elec­tion law­yer at D.C. firm Wiley Rein. “He’s re­turn­ing the money to Trump.”

Trump’s pres­id­en­tial cam­paign has paid hun­dreds of thou­sands of dol­lars in event sta­ging, fa­cil­ity rent­al, and ca­ter­ing fees to the Trump Na­tion­al Golf Club, Trump Na­tion­al Dor­al, the Trump In­ter­na­tion­al hotel in D.C., and Trump Park Av­en­ue. It’s not the first time the FEC has dealt with a busi­ness mag­nate run­ning for of­fice; brew­ery heir Pete Co­ors ran for Sen­ate in Col­or­ado, and Don Bey­er, known for his North­ern Vir­gin­ia auto deal­er­ship chain, won a House seat in 2014. But “none is on the scale of what the Trump cam­paign is re­por­ted to have done,” Svoboda said.

In ad­di­tion to pay­ing for events on Trump prop­er­ties, the cam­paign must also pay for travel, mean­ing Trump gets paid by his own cam­paign every time he takes his per­son­al plane across the coun­try.

Asked about Trump’s cam­paign, FEC spokes­wo­man Ju­dith In­gram poin­ted to a par­al­lel FEC rul­ing in­volving then-Sen. Scott Brown. In 2011, the Com­mis­sion ruled that Brown’s cam­paign was al­lowed to pur­chase cop­ies of Brown’s auto­bi­o­graphy at a mar­ket rate, then dis­trib­ute them to pro­mote the cam­paign.

When it comes to cam­paign events, mar­ket rate is de­term­ined by events at the same prop­erty that are sim­il­ar in scope. “What you’d look at is, have they had a wed­ding there?” said Noble. “Have they had oth­er large events there? Have they had cor­por­ate events that are sim­il­ar?”

Mean­while, more ques­tions arise as os­tens­ible cam­paign events veer in­to busi­ness pro­mo­tions. At an event in March, Trump boas­ted of his wine, steak, bottled wa­ter, and magazine ven­tures—and dis­played props for each. The leg­al test, said Svoboda, is if the “can­did­ate’s con­duct is ex­plic­able in terms of try­ing to pro­mote the cam­paign, or is there evid­ence that there’s a con­scious at­tempt to sup­port a busi­ness.” In Trump’s case, the can­did­ate has long ar­gued that his busi­ness deal­ings demon­strate the kind of suc­cess he will have as pres­id­ent, which may give him all the lee­way he needs. “The FEC has giv­en mem­bers a long leash to fig­ure out what sorts of ap­peals make sense, so long as they don’t con­vert their cam­paign funds to per­son­al use,” Svoboda said.

Still, Trump will need to re­main care­ful to be ex­act every time he mixes his cam­paign with his busi­ness. “If the can­did­ate over­pays [his busi­ness], it’s put­ting money in the can­did­ate’s pock­et,” Toner said. “If the cam­paign un­der­pays, it’s a cor­por­ate in-kind con­tri­bu­tion. You’re damned if you do, damned if you don’t.”

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