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.”