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Donald Trump and the art of the campaign expense

By Dan Christensen, FloridaBulldog.org 

Inside Donald Trump's Boeing 757

Inside Donald Trump’s Boeing 757

Donald Trump knows how to make money, even when he’s running for president.

Federal records show that Trump’s campaign paid the Republican frontrunner and 10 companies he owns more than $1.64 million for various campaign expenses since the billionaire businessman began his run last spring.

The payouts amounted to nearly one of every three dollars the Trump campaign spent through Sept. 30, according to campaign reports, including an amended quarterly report filed Dec. 17 with the Federal Elections Commission.

Most of that money, $1.2 million, was paid to Tag Air, the holding company for the luxury Boeing 757 with 24-karat gold plated seat belts that Trump uses on the campaign trail. The jet can accommodate up to 43 passengers. The payout was the fair market value of those flights, according to the campaign. You can take a video tour of the plane here.

Another $410,000 went to Trump and Trump entities to reimburse payroll expenses and pay rent, hotel and restaurant bills.

Trump himself was paid more than $100,000, including $45,000 for rent and $60,000 in reimbursements for campaign payroll expenses he incurred, the records show.

The Trump campaign pie also was sliced to pay rent to The Trump Corporation, Trump Tower Commercial LLC, Trump Plaza LLC, and Trump CPS LLC. Together, they collected more than $278,000.

Trump Payroll Corp., too, was paid nearly $18,000 for pre-paid payroll expenses. Campaign checks also went to Trump Restaurants LLC and Trump hotels in New York and Las Vegas for meals and lodging, though in much lesser amounts.

While noteworthy, it’s not unlawful for Trump’s campaign to pay Trump or his companies for their services. Indeed, federal law often requires it.

“It’s not illegal as long as they’re paying fair market value,” said prominent Washington, D.C. campaigns and elections lawyer Jan Witold Baran. “In fact, if a campaign uses the goods and services of a corporation they have to pay for it. Otherwise, it would be an illegal corporate contribution even though the candidate might be the 100 percent owner of the business. That has been the policy of the Federal Elections Commission for decades.”

Federal election law, however, does not contemplate a mega-wealthy candidate like Trump.

“There’s no question that Trump is conducting a campaign that’s unique in many respects. I’ve been doing this for 40 years and I never heard of a candidate disclosing his financial numbers and complaining they were too low – that I’m really richer than these forms say,” said Baran.

GIVING MONEY TO A BILLIONAIRE

Trump and campaign manager Corey Lewandowski have said repeatedly – most recently in a radio interview with Lewandowski three weeks ago – that Trump is self-funding his campaign. While that was true last spring when Trump seeded his campaign with a $1.8 million loan, it no longer is.

The Trump campaign solicits credit card donations on its website, telling supporters to “Stand with Donald Trump to Make America Great Again.” Through Sept. 30, the campaign reported accepting $3.8 million in contributions – a number that’s sure to rise with the campaign’s year-end report due Jan. 31.

Donald Trump

Donald Trump

About $2.8 million of those contributions to billionaire Trump were given by small donors whose names aren’t required to be disclosed because they contributed $200 or less.

Neither the Trump campaign nor Dan Scavino, a senior advisor to the campaign, responded to requests for comment.

What the Trump campaign took in from outside contributors in the last reported quarter is less than what it spent, $4 million. In all, the campaign’s reported net operating expenditures were $5.4 million.

Some other major Republican candidates have spent much more.

For example, Sen. Marco Rubio raised $14.8 million in contributions and spent $6.9 million on operating expenditures through Sept. 30. Jeb 2016 Inc., the campaign committee set up by former Florida Gov. Jeb Bush, raked in $24.2 million in individual contributions and spent $14.5 million during the same period.

All those contributions, and Trump’s as well, are designated for the primary elections. $2,700 is the maximum an individual may give for the primaries.

The Trump campaign’s first television ad, released Sunday, marks a turning point in spending. To date, Trump has benefitted from untold hours of free coverage. With the Iowa caucus on Feb. 1, the New Hampshire primary on Feb. 9 and Super Tuesday on March 1, he and other candidates are expected to shell out big bucks to blanket the airwaves.

Can Trump turn a profit on his campaign — that is, see his loans repaid in full and additional campaign dollars flowing to his companies? It will depend on his fortunes in the primaries, his contributors’ staying power and his determination to win.

Senate ethics committee asked to investigate Marco Rubio for improper use of campaign funds

By Francisco Alvarado, FloridaBulldog.org 

Rubio speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland Photo: Gage Skidmore via Wikimedia

Rubio speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland Photo: Gage Skidmore via Wikimedia

A national watchdog group is claiming U.S. Sen. Marco Rubio may have broken U.S. congressional ethics rules by allegedly using funds from a political action committee to pay a writer who helped pen the Miami Republican presidential candidate’s 2012 memoir, An American Son.

Citizens for Responsibility and Ethics in Washington, or CREW, wants the U.S. Senate Select Committee on Ethics to investigate whether Rubio converted campaign funds to personal use, which is a violation of Senate rules, according to a Dec. 17 letter the group’s executive director Noah Bookbinder sent committee chairman Johnny Isakson (R-Ga.) and vice-chairwoman Barbara Boxer (D-Calif.).

Between May 14 and October 3, 2012, the Rubio-affiliated Reclaim America paid a total of $20,000 to book author Mark Salter for “strategic consulting,” according to a 2012 quarterly campaign finance report filed by the PAC. However, Bookbinder’s letter claims that the payments to Salter came around the same time he was helping Rubio organize and revise the memoir, for which the senator received an $800,000 advance.

“Campaign contributions should be used for their intended purpose—campaigning,” Bookbinder said in a statement. “It is up to the ethics committee to make sure that actually happened here.”

Alex Conant, spokesman for Rubio’s presidential campaign, and Reclaim America treasurer Lisa Lisker did not respond to emails requesting comment. In an interview with the National Journal, Salter said his Reclaim America payments were for “work unrelated to the book.”

According to CREW’s letter, it is unclear what the $20,000 actually paid for. Bookbinder cites a 2013 Tampa Bay Times article that states: “Rubio used his PAC to pay $20,000 to Mark Salter, a strategist who helped run John McCain’s 2008 presidential campaign, for help writing a memoir.” Bookbinder also noted that Rubio personally profited from the memoir when he received his six-figure advance.

SECOND COMPLAINT

This marks the second time in three months that CREW has accused Rubio and one of his political organizations of breaking federal campaign finance laws and regulations. In October, Bookbinder filed a complaint with Internal Revenue Service Commissioner John Koskinen asking for an investigation into the non-profit group Conservative Solutions Project Inc.

The complaint states that Conservative Solutions Project exists only to benefit Rubio’s presidential campaign, spending more than $8 million on television ads supporting the senator’s bid for the Republican nomination. Under federal law, 501(c)(4) organizations like Conservative Solutions Project must be primarily engaged in promoting social welfare and are excluded from participation in political campaigns.

Bookbinder noted that Conservative Solutions Project is closely affiliated with a PAC that uses the same name and was set up to support Rubio’s presidential run. The two organizations share board members, fundraising consultants and spokesmen, Bookbinder said.

“Groups registered as social welfare organizations need to be just that, social welfare organizations,” Bookbinder said. “This is just a blatant attempt to get around the law and keep secret donors supporting Sen. Rubio’s campaign.”

Rubio’s campaign finance activities have faced scrutiny from watchdogs and federal regulators since he first ran for federal office in 2010, when his campaign accepted $210,173 in excessive contributions that resulted in an $8,000 civil penalty by Federal Elections Commission in 2012.

Two years later, the FEC warned the Rubio campaign it was accepting individual contributions that exceeded the $2,700 maximum after each of its four quarterly filings in 2014. This past September, his presidential campaign refunded more than $120,000 in excessive contributions that had been flagged by the FEC.

Heavy-spending trucking industry pushes Congress to relax safety rules

By Brian Joseph, FairWarning trucking

Big rig crashes kill nearly 4,000 Americans each year and injure more than 85,000. Since 2009, fatalities involving large trucks have increased 17 percent. Injuries have gone up 28 percent.

Given these numbers, you might expect Congress to be agitating for tighter controls on big rigs. In fact, many members are pushing for the opposite – looser restrictions on the trucking industry and its drivers. (more…)

Outside groups dwarf candidate spending in Florida special election

By Michael Beckel, Center for Public Integrity 

Democrat Alex Sink, left, and Republican David Jolly

Democrat Alex Sink, left, and Republican David Jolly

The campaign money machines of Democrat Alex Sink and Republican David Jolly have not just been matched by outside forces, they’ve been lapped.

Roughly $12.5 million has flooded the heated special election in Pinellas County on central Florida’s gulf coast, but less than one-third of that sum was controlled by the candidates’ own campaigns, according to a Center for Public Integrity analysis of federal records. (more…)

After Sandy Hook shootings, NRA campaign clout still formidable

By Joe Eaton, The Center for Public Integrity

The National Rifle Association is keeping silent in response to calls for gun control measures in the wake of the massacre at Sandy Hook Elementary School in Newtown, Conn.

Yet the massive trail of political money spent by the group shows the potent force any proposals for new restrictions will likely face when the anger and dismay over Sandy Hook recedes. (more…)

Romney benefits from post-Citizens United spending; American Crossroads top spender since Labor Day

By Rachael Marcus, The Center for Public Integrity 

Mitt Romney

Since Labor Day, the once-unofficial start of the election season, 70 percent of outside spending on the presidential race made possible by the Citizens United Supreme Court decision has benefited Mitt Romney, according to a Center for Public Integrity analysis.

More than $106 million of the $117 million spent on the Obama-Romney matchup since Sept. 3 has been on negative ads, with President Barack Obama absorbing more than $80 million in attacks, according to the analysis of Federal Election Commission data. (more…)

Two dark money groups outspending all Super PACs combined

By Kim Barker, ProPublica

An ad attacking President Obama's policies paid for by Crossroads Grassroots Policy Strategies. (Crossroads GPS)

Two conservative nonprofits, Crossroads GPS and Americans for Prosperity, have poured almost $60 million into TV ads to influence the presidential race so far, outgunning all super PACs put together, new spending estimates show.

The cash-rich pharmaceutical lobby and the rising cost of drugs for Medicare seniors

By Stuart Silverstein, FairWarning 

President George W. Bush signing the Medicare Prescription Drug Improvement and Modernization Act of 2003.

President George W. Bush signing the Medicare Prescription Drug Improvement and Modernization Act of 2003.

When the Republican-controlled Congress approved a landmark program in 2003 to help seniors buy prescription drugs, it slapped on an unusual restriction: The federal government was barred from negotiating cheaper prices for those medicines. Instead, the job of holding down costs was outsourced to the insurance companies delivering the subsidized new coverage, known as Medicare Part D.

The ban on government price bargaining, justified by supporters on free market grounds, has been derided by critics as a giant gift to the drug industry. Democratic lawmakers began introducing bills to free the government to use its vast purchasing power to negotiate better deals even before former President George W. Bush signed the Part D law, known as the Medicare Modernization Act. (more…)

U.S. Rep. Francis Rooney mum about fat fees paid to White House Counsel’s ex-law firm

By Francisco Alvarado, FloridaBulldog.org 

U.S. Rep. Francis Rooney, R-Naples

From last July to March, the campaign committee for freshman Florida Congressman Francis Rooney paid roughly $117,000 to the former law firm of White House Counsel Donald McGahn II. However, neither Rooney nor McGahn are answering questions about the payments to Jones Day, a global firm based in Cleveland where McGahn was a partner for nearly three years before joining President Donald Trump’s administration in January.

So far, the only information McGahn, a former commissioner for the Federal Election  Commission, has released is that he provided “legal services” exceeding $5,000 to the Rooney for Congress campaign committee, according to his public financial disclosure report. Campaign finance reports filed by Rooney for Congress show nine disbursements to Jones Day between last July and March. Jones Day received five of those payments totaling $72,328 after the Nov. 8 election, including $17,505 on the day of Trump’s inauguration, Jan. 19

Efforts by Florida Bulldog to get answers about the type of “legal services” McGahn and Jones Day provided Rooney for Congress were unsuccessful. Over the course of four days, White House media affairs director and former Miami political television host Helen Ferre did not respond to three email requests to interview McGahn. Likewise, Rooney press secretary Chris Berardi did not respond to three emails and three voicemails requesting comment from the Naples-area U.S. representative, a rising star in the Capitol’s GOP power circle. A spokesman for Jones Day declined comment.

McGahn and Rooney may not want to talk, but a government watchdog group and two campaign finance lawyers who spoke to Florida Bulldog believe the costly legal services may be for defending the congressman or his committee in a civil investigation for either ethics or campaign violations.

“You can never really know without them telling you,” said Jordan Libowitz, spokesman for Citizens for Responsibility and Ethics in Washington. “But that pattern of spending is consistent with people who are under investigation by the Federal Election Commission.”

He added: “It certainly raised a flag when we started looking at Donald McGahn’s financial disclosure statement.”

The attorneys, who spoke on the condition of anonymity, concurred that the expenditures seem to indicate that a probe by the commission, also known as the FEC, is taking place. “There could be a civil investigation by the FEC inquiring about donations and expenditures within the campaign,” said one lawyer, who has represented clients accused of federal civil and criminal campaign violations. “Once the FEC starts an inquiry, you got to get a lawyer.”

The other lawyer, who primarily represents city, county and state candidates, said it could also be that Rooney is under investigation by the Office of Congressional Ethics. “That would entitle him to the use of his campaign funds to defend against a complaint,” the attorney said. “I can’t see anything else these payments are for but an investigation.”

Riding the Trump train

Rooney, one of the first prominent Florida Republicans to climb aboard the Trump train, has become a leading conservative voice. The former U.S. Ambassador to the Vatican, Rooney owns a construction company that built the Dallas Cowboys’ new stadium and the presidential libraries honoring the two Bush presidents. Before jumping into the race to represent Florida’s 19th Congressional District, Rooney was one of the top Republican rainmakers in the country.

In February, Rooney participated in two panels about national security and political correctness at the annual Conservative Political Action Conference, or CPAC. In a press statement at the time, CPAC Chairman Matt Schlapp hailed Rooney as a “much needed and welcomed” addition to Congress. “He will stand up for you and for conservative policies,” Schlapp said. “We are proud to welcome him to our stage next week.”

While filings for Rooney for Congress don’t show any warning letters from the FEC regarding impermissible donations and expenditures, McGahn seems to be the ideal counselor to hire when campaigns run into trouble with the commission.

A January Jones Day press release touted McGahn’s commission credentials from 2008 to 2013 when Trump selected him as White House Counsel. “He led what has been called a ‘revolution’ in campaign finance,” the statement says. “He rewrote virtually all of the FEC’s procedures for audits, enforcement matters, and advisory opinions, which provide for an unprecedented amount of due process.”

However, press reports paint a much more controversial tenure. Campaign finance reform groups clashed with McGahn over his efforts to deregulate the FEC. He voted to loosen restrictions that prohibited parties from using campaign money for recounts and litigation. In 2013 before he resigned, he unsuccessfully pushed a rule that would have barred FEC lawyers from sharing information with federal prosecutors without commission approval. But McGahn was instrumental in passing a new rule allowing campaigns and party committees to present their cases in open session instead of behind closed doors.

McGahn joined the Trump team early on in the billionaire developer’s astonishing run to win the White House. He served as the campaign’s general counsel and lists several Trump political committees as clients on his financial disclosure form. When Trump appointed him as the commander-in-chief’s top lawyer, 13 attorneys from Jones Day joined McGahn at 1600 Pennsylvania Avenue.

Since Trump took office, McGahn has been at the center of some of the biggest controversies to hit the new administration. For instance, then-acting Attorney General Sally Yates warned McGahn’s office in January that Michael Flynn, Trump’s first pick as National Security Adviser, had misled officials, including Vice President Mike Pence, about his conversations with Russia’s U.S. Ambassador Sergey Kislyak and could be vulnerable to Russian blackmail.

When Flynn was subsequently forced to resign after his compromised position was leaked to national media outlets, questions arose about McGahn’s handling of the information he received. During a February press briefing, White House Press Secretary Sean Spicer defended McGahn, saying he “informed the President immediately” and that he concluded Flynn did not violate any laws after conducting “exhaustive and extensive questioning of Flynn.”

Non-profit donors allegedly acting as “fronts” for utilities backing Amendment 1

By Francisco Alvarado, FloridaBulldog.org solar-panels

Consumers for Smart Solar, the Political Action Committee supporting controversial Amendment 1 that critics say would give Florida utility companies a monopoly on solar energy, has raised $4.45 million from three non-profit groups allegedly acting as “fronts” for utility industry contributions.

“Big monopoly utilities filter money through outside organizations in an attempt to make it appear like they have support from non-utility interests,” said Susan Glickman, Florida director of the Southern Alliance for Clean Energy, a group that supports a marketplace for solar energy that allows consumers to choose their provider. “But the money [donated to Consumers for Smart Solar] all comes from the same place.”

The three alleged fronts for the state’s largest electric companies are Let’s Preserve the American Dream, the 60 Plus Association and the National Black Chamber of Commerce. Records show that each has received money from utility interests in the past, and each does not disclose the identities of its financial backers.

For the Amendment 1 ballot measure to pass, it must get 60 percent voter approval.

Although the money raised by the non-profits is a fraction of the $20 million-plus utility companies have given to Consumers for Smart Solar, their donations create the false perception that Amendment 1 has the support of regular people, said Aliki Moncrief, executive director of Florida Conservation Voters, a group promoting environmental protection and clean energy.

“These groups supporting Amendment 1 have brought up the legitimate concern about protecting consumers,” Moncrief said. “Unfortunately, they are acting as fronts for the big utility companies.”

Consumers for Smart Solar chairman Jim Kallinger did not respond to two requests for comment sent to his company’s email address. The company, Stamp Vault, does not have a listed phone number, and the phone number listed on the Political Action Committee’s campaign filings belongs to a Tallahassee accounting firm.

Sarah Bascom, the PAC’s spokeswoman, did not respond to a voicemail and email requesting comment before deadline.

According to Consumers for Smart Solar’s campaign finance reports, Let’s Preserve the American Dream has donated $1.3 million since 2015 with its most recent contribution of $250,000 made on Oct. 28. The Tallahassee-based non-profit organization’s executive director is Ryan Tyson, who is also vice president of political operations for Associated Industries of Florida, a group that bills itself as “The Voice of Florida Business” and counts former Florida Republican House Speaker Tom Feeney as its chief executive.

Funding sources not disclosed

Let’s Preserve the American Dream’s 2015 income tax return shows the non-profit generated more than three quarters of its $1.6 million in annual revenue through contributions, grants and gifts. However, the sources for those funds are not disclosed on the tax returns. Reached via email, Tyson declined to comment on who or which companies financially support Let’s Preserve the American Dream. He also would not explain why Let’s Preserve the American Dream did not use its Political Action Committee (which has the same name) to donate the $1.3 million that went to Consumers for Smart Solar. Had the money gone through the PAC, Let’s Preserve the American Dream would be required to disclose its donors.

According to campaign finance reports, the Let’s Preserve the American Dream PAC was disbanded on Oct. 6 after raising and spending $33,000 since 2015. The group collected $10,000 apiece from FP&L and The Mosaic Company, the owner of the Central Florida fertilizer plant where 215 million gallons of contaminated wastewater recently drained into an aquifer that provides drinking water for millions of Floridians.

Another Consumers for Solar backer, the National Black Chamber of Commerce, also does not disclose the source of the contributions, gifts and grants it receives, according to its 2012, 2013 and 2014 tax returns. However, a brochure for the group’s 2015 annual convention at the Diplomat Resort & Spa in Hollywood lists several energy and fossil fuel companies as sponsors, including Gulf Power, Koch Industries and Chevron.

The black chamber, which generated $1.3 million in revenue in 2014, donated $200,000 to Consumers for Smart Solar through its National Black Chamber of Commerce Free Trade Initiative, a 501c(4) non-profit organization that had its tax-exempt status revoked by the Internal Revenue Service for not filing tax returns for three consecutive years.

With no tax-exempt status, the Free Trade Initiative can essentially engage in political activities without any restrictions, said Steve R. Johnson, a Florida State University tax law professor. “The revocation of tax-exempt status does not prohibit them in any way from making contributions,” Johnson said. “It can spend money on any kind of lobbying activity.”

Harry Alford, the black chamber’s longtime president, did not return two phone calls seeking comment.

The 60 Plus Association, a Virginia-based senior citizen advocacy group that supports privatizing Social Security and ending the federal estate tax, has contributed $1.69 million to Consumers for Smart Solar since last year. Like the black chamber and Let’s Preserve, 60 Plus does not disclose its donors.

However, tax filings for Freedom Partners, an organization that receives substantial financial support from industrialists Charles and David Koch, shows it gave $15.7 million to 60 Plus in 2012. American Encore, another organization supported by the Kochs, gave 60 Plus a combined $14 million between 2010 and 2012. James Martin, 60 Plus chairman, did not return a phone call seeking comment.

According to Moncrief, “Everyone knows 60 Plus is a front group for the Koch brothers trying to appeal to seniors.”

Glickman said voters deserve to know that the three non-profits backing Consumers for Smart Solar are indebted to energy and fossil fuel corporations. “Power companies are spending tens of millions of dollars to deceive people into voting for Amendment 1,” she said. “Don’t be misled by this deceptive campaign.”

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