Largest Alleged Violation in FEC History – Investigation Blocked, Case Closed

Sam Schwab
Associate Editor
Loyola University Chicago School of Law, JD 2024

In June, the Federal Elections Commission (FEC) announced that they would not investigate allegations that two of former President Trump’s campaign committees illegally misreported hundreds of millions of dollars in spending. If true, these allegations would constitute the “largest alleged violation in FEC history” according to FEC Commissioner Ellen L. Weintraub. The initial complaint alleged that the committees failed to disclose payments to friends and family members of the former President, such as  Lara Trump, who is Trump’s daughter-in-law, and Kimberly Guilfoyle – Donald Trump Jr.’s fiancé. In it’s decision, the FEC’s Republican Commissioners voted not to investigate the matter, which is therefore no longer being pursued. This situation illustrates how the FEC has consistently failed to investigate the Trump reelection campaign for alleged violations of campaign finance law. 

The FEC’s structure and complaint process

The FEC is a federal agency whose mission is to “protect the integrity of the campaign finance process by providing transparency and fairly enforcing and administering federal campaign finance laws.” The agency has six Commissioners, who are appointed by the President, with the advice and consent of the Senate. There can be no more than three Commissioners of the same political party, and “at least four votes are required for any official Commission action” to take place. As such, opening an investigation into alleged campaign finance violations requires votes from four Commissioners. When the Commission votes 3-3 as to whether to open an investigation, the allegations are not investigated. Each side then releases a “Statement of Reasons” which describes why each commissioner voted the way they did. At the time of the decision, three Republicans, two Democrats, and one Independent were on the Commission. Since then, the Independent commissioner stepped down and Democratic Commissioner Dara Lindenbaum now occupies the seat.

Anyone can file a complaint with the FEC when suspected campaign finance violations arise. On July 28, 2020, a nonprofit watchdog group called the Campaign Legal Center filed a complaint against two campaign committees that were part of former President Trump’s reelection campaign. The complaint alleges violations of 52 U.S.C. § 30104(b)(5)(A) – a law known as the Federal Election Campaign Act (FECA). First passed in 1972 after the Watergate scandal, FECA created the FEC and imposed reporting and disclosure requirements onto campaigns for federal office. The law requires that every committee disclose payments to individuals and report the individuals’ name, the date of the payment, the amount, and the “purpose of such operating expenditure.” 

“Make America Great Again PAC” complaint

MUR (Matter Under Review) #7784 alleges that two Trump campaign committees misreported the recipients of payments to two companies – American Made Media Consultants (AMMC) and Parscale Strategy – as well as the purpose of those payments. The funds were reportedly being used to pay the salaries of Trump campaign advisors, family members and friends – a fact that the Trump team does not deny. When asked for comment, Trump advisor and former campaign manager Brad Parscale said of the advisors being paid, “I can pay them however I want to pay them.” However, according to the complaint, the purpose descriptors in the committees’ FEC disclosures did not account for the payment of these salaries.

A Huffington Post article describes why this is an issue. “A lot of people close to Donald Trump are getting rich off of his campaign,” said one campaign finance expert. “They don’t want donors to know that they’re getting rich. Because…it’s donor money.” A source for the article described Trump’s former campaign manager Brad Parscale as “a money launderer, not a campaign manager.” In other words, the vendors AMMC and Parscale Strategy were likely being used as front companies to conceal that members of Trump’s inner circle were secretly profiting off campaign contributions to the tune of tens of millions of dollars.

The Republican and Democratic Commissioners’ Statements of Reasons

According to the Republican Commissioners’ Statement of Reasons, the committees were not required to separately report AMMC and Parscale Strategies’ payments to third parties, so long as they were “payments for services or goods used in the performance of the consultant’s contract with the committee.” The immediate recipient must be “merely a conduit for the intended recipient of the funds” to establish a FECA violation. The Republican Commissioners found that the committees’ stated purposes “credibly explain that each vendor paid its respective sub-vendors and employees for services provided in performing the vendors’ contracts with the Committees.” Thus, the Commissioners found “little support for pursuing enforcement action.”

The FEC’s Democratic Commissioners saw it differently. They highlighted the fact that of the 43 complaints filed against the Trump campaign (24 of which the FEC’s nonpartisan attorneys recommended for investigation), none were investigated by the Commission. The Democratic Commissioners also explained that the FEC did however follow through with an investigation of the DNC and the Hillary Clinton campaign for misreporting payments to a law firm. The facts in that case were nearly analogous to the alleged violation by the Trump campaign, though the DNC case came out to only “a tiny fraction of the amount of money.” Thus, the Republicans’ refusal to investigate Trump carried “the unmistakable stench of partisanship.”

Conclusion and a proposal

On its website, the FEC claims that it’s structure of requiring votes from four commissioners encourages “nonpartisan decisions.” Instead, the Republicans on the Commission have never once voted to investigate the former President, even when 24 of those times the nonpartisan staff attorneys at the FEC recommended an investigation. As a result, Donald Trump and his enablers have almost certainly enriched themselves without even so much as an investigation from the FEC.

I propose that Congress should amend FECA to make the FEC a nonpartisan, rather than a bipartisan, crop of commissioners. This could also be achieved by replacing the commissioners with a panel of administrative law judges. This would enable the FEC to move forward with enforcement of FECA, rather than being subject to partisanship rendering it basically toothless in the face serious and ever-increasing campaign finance violations.