With Roger Sollenberger, Political Reporter

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This week’s Big Dig . . . How The Cash-Strapped Trump Campaign Is Trying a New Donor Loophole

Campaign donor refunds have been a part of political finances since modern contribution limits were first instituted in 1972. But just over 50 years later, Donald Trump’s political operation seems to have found a novel workaround, with the campaign reporting just one individual refund—for $400—over the entirety of last year.

To date, the Trump campaign has reported only $1,400 in refunds since November 2022, according to Federal Election Commission filings—a jaw-droppingly low amount for a frontrunner presidential campaign. For context, President Joe Biden’s campaign refunded its supporters about $360,000 last year, with another $222,000 last month alone. In 2019, the year before the last presidential election, the Trump campaign returned more than $900,000 to its donors, racking up more than $11 million in refunds the following year.

Crate & Barrel

But now, the refunds are essentially zero, raising the prospect of the former president’s campaign once again stretching the bounds of campaign finance law to inflate his war chest—and the public’s impressions of his political strength.

On paper, Trump’s refund rate is virtually impossible. His campaign has not solved this persistent problem of overpayments. His donors are, in fact, breaking the donation limits—dozens and dozens of them, according to the notices that the FEC sent his campaign after every 2023 filing.

So how exactly has the Trump campaign found a way to make the refunds disappear? That question arrives at a sensitive political moment, as numerous news reports pillory the Trump operation for its breakneck spending amid an alarmingly bleak fundraising outlook.

While no one on Trump’s campaign would answer these questions for The Daily Beast—either on the record or on background—there are clues in the campaign’s responses to the FEC’s notices. In those replies, Trump campaign treasurer Bradley Crate acknowledges the excessive donations. He states that the money has since been “returned” to an affiliated committee, which will be “reflected on a subsequent [campaign] report.”

Pass that joint

Crate’s answer, it seems, is that the Trump campaign is forwarding the excessive amounts to other political accounts, potentially raising a host of other issues. But his explanation, as written, doesn’t seem explicitly true—at least not at the moment.

According to FEC data, the 2024 Trump campaign has never reported sending any money to that affiliated committee, a joint fundraising committee (JFC) called “Trump Save America.” And that committee’s refund rate also appears low—a total $150,000 out of $129 million raised. By comparison, Haley’s JFC refunded roughly $115,000 while raising $20 million. (In 2022, Trump’s JFC returned $42,000, and just $2,500 the year before.)

Mathemagicians

Excessive donations are a common issue for all campaigns. Trump’s top primary opponents forked over hundreds of thousands of dollars, even while raising less money than the former president. Ron DeSantis’ failed presidential campaign kicked back about $535,000, and Haley’s campaign returned more than $260,000. Even dropouts like Tim Scott ($44,000), Chris Christie ($11,000), and Mike Pence ($9,600) all showed higher refunds despite dramatically lagging Trump in fundraising, combined. And the campaign for longshot independent Robert F. Kennedy Jr. sent about $485,000 back to his donors, disclosures show.

Typically, if a donor gives a campaign too much money, the campaign refunds the excess amount to the person, reporting it later in FEC filings. But when a donor gives too much to the Trump campaign through this joint committee, the campaign does not refund that person. Instead, The Daily Beast’s analysis of FEC data indicates that some reports appear to have simply vanished the original excessive amount altogether, even though the new amended filings show the exact same bottom line totals, down to the penny.

In short, the arrangement appears to swap out the refund process with a new batch of donations. It clearly requires more work behind closed doors, but the bottom lines remain the same, and at least to that end, it all comes out in the wash, so to speak.

Notably, the maneuvering also appears to demand at least some degree of misrepresentation to the FEC, if not outright lying—specifically, the treasurer’s written statements that the campaign had “returned” the money when its reports show no such transactions.

Screen pass

Jordan Libowitz, communications director for Citizens for Responsibility and Ethics in Washington, told The Daily Beast that excessive donations shouldn’t be a huge problem to begin with, because JFCs typically pre-screen donations for potential limit-breakers.

“The way this is supposed to work is that the JFC checks for excessive contributions, and with written approval, rebalances the percentages on an excessive contribution to keep it from being excessive,” Libowitz explained, citing FEC rules.

Refunds are typically easy to resolve, through processes the FEC lays out on its website. The rules appear equally clear that all committees must disclose their refunds, regardless of amount.

“What the Trump campaign appears to have done is said ‘money is fungible,’” Libowitz said. “You cannot take $9,900 from one donor and $3,300 from another and claim to have taken $6,600 from each.”

The political stakes

But it’s not just a disclosure issue either; campaign refunds also happen to provide an important political metric.

High refund rates can signal potential donor burnout, a financial clue that a campaign has maxed out most of its reliable supporters and might be in danger of going into the red if it can’t find other funding sources. This was the case with the Trump campaign in 2020, when a number of news reports identified small-dollar donor burnout as a problem. Combined with reportedly lavish spending, that left the Trump operation with a massive cash deficit against Biden just ahead of the election.

Today, both Trump and Biden are feeling the pinch—part of a national downward trend that Politico dubbed a “political recession.” But of the two campaigns, Trump’s operation appears to have been hit hardest. 

Recent reports have raised alarms about Trump’s runaway legal spending and drooping donations, sparking internal concerns about whether Trump can sustain the necessary financial support through the election.

However, if a campaign doesn’t report refunds, those potential weaknesses are harder to calculate—and harder to report.

Read the full story here.

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From Roger’s Notebook...

Cash crunch. Trump’s finances, political and personal, have dominated the news recently. While his legal spending has caught headlines, his joint fundraising committee’s political spending has flown under the radar, and those topline numbers suggest a deeper problem in Trumpworld.

The JFC is Trump’s most “legit” committee, handling almost all his fundraising. But it’s torching cash. Trump Save America shelled out $48.3 million in operating expenses last year, while distributing $80.8 million to the campaign and Save America—a burn rate hovering around 40 percent. Notably, most of those costs are for services typically associated with fundraising—$14.2 million for digital consulting, another $11 million on direct mail, $4.2 million for online solicitation fees, and $3.4 million on texting services. The committee ended the year with a net loss, holding just $3.5 million on hand.

Until Trump is the nominee, he can’t raise jointly with the Republican National Committee—this puts him at a disadvantage against Biden, who sees cost benefits partnering with the Democratic National Committee. Last year, Biden’s JFC raised nearly $30 million more, spent $15 million less, and walked away from 2023 with more than ten times as much cash on hand.

Of course, Trumpworld seems determined to bend the RNC to serve Trump. This week, his daughter-in-law Lara Trump—who is gunning for RNC co-chair—doubled down on her vows to co-opt the national party as a cash machine for the Trump campaign.

Just in time. And just like that, a new pro-Trump super PAC has come to town.

Axios broke the news on Friday, announcing the arrival of the new air support as a “well-funded new super PAC to help former President Trump in the general election,” run by Florida allies with Trump confidant and coffee table book publisher Sergio Gor at the helm as CEO.

The super PAC, called “Right for America,” officially established itself on Jan. 24, according to an FEC filing. Its first major donor, Axios reported, is billionaire former Marvel Entertainment chair Ike Perlmutter, a personal friend and donor. Perlmutter had reportedly committed to cutting a major check last year to the other pro-Trump super PAC, “Make America Great Again Inc,” but FEC filings show that never materialized.

Axios reported that MAGA Inc. is holding two events this week featuring Trump as a special guest, with Trumpworld associates telling the outlet that they have “serious concerns” about the fact that the powerful and lucrative new group will be run by people without much experience.

Besides Gor, the super PAC’s board members include Lee Rizzuto—conspiracy theorist and Trump’s contentious former consul general to Bermuda—and Anthony Lomangino, a wealthy New York-based garbage entrepreneur.

Over the Moon. The company at the center of an ethics investigation into Rep. Alex Mooney (R-WV) still isn’t filing its PAC reports with the FEC—but it managed to make a contribution to Mooney’s Senate campaign anyway.

The PAC—called “HSP Direct PAC”—is the political committee for HSP Direct LLC, the direct mail consulting company that an Office of Congressional Ethics 2022 report found likely made a number of impermissible lavish gifts to Mooney, who has personal ties to the firm. But the PAC, which is still active, didn’t file any disclosures with the FEC last year, with its most recent report covering the end of 2022.

But that didn’t stop the PAC from engaging in political activity. Mooney’s Senate campaign reported receiving a $3,300 maximum primary contribution from the group on June 30, one of four donations the PAC apparently made but did not report last year. Other FEC filings show that the PAC contributed to two other GOP House candidates last year—$250 to far-right Joe Kent in Washington, and $500 to Texas hopeful Mayra Flores—along with a $2,500 gift to the leadership PAC belonging to Rep. Jim Banks (R-IN) in late October.

The company itself also reportedly made a $5,000 contribution to Mooney’s legal defense fund.

By all means. The FEC has questions about personal use expenses reported last year by former House Ways and Means chair Rep. Kevin Brady (R-TX).

The campaign received two letters this week asking Brady’s old campaign committee for clarity about irregular reporting, including dozens of small-ticket disbursements that the campaign had openly itemized as “personal use expenditure itemized by candidate.” All of the flagged expenses came just weeks after Brady left Congress at the end of 2022. The second letter inquired about a $300.28 charge later in the year that the committee described as “fraudulent credit card use.”

Brady, a Trump-backing Republican who served in Congress for 26 years, enjoyed a bipartisan reputation as a reserved and serious lawmaker. On retiring, he denounced partisan division, but stopped short of criticizing Trump personally.

Segregationists. The FEC is now accepting comments for proposed new rules regulating segregated national party funds—three separate RNC and DNC bank accounts for raising and spending money in connection to nominating conventions, recounts, and building and maintenance. The proposed rulemaking comes in response to two years-old petitions requesting new terms and reporting guidance regarding those segregated funds, with a joint Campaign Legal Center-Center for Responsive Politics petition from 2019 stating that current regulations make it “effectively impossible for the public to track the large quantities of funds flowing into and out of the [party segregated] accounts.”

More From The Beast’s Politics Desk

Less than a decade ago, you’d be hard-pressed to find congressional Republicans who wouldn’t have worn the title of “Reagan Republican” as a badge of honor, but Trump’s war on the Ukraine war, and isolationist stance more broadly, has turned that compliment into a MAGA epithet. Riley Rogerson delivered an in-depth report this week about that transformation that I highly recommend.

Top GOP candidate in the critical Ohio Senate race in Ohio, Bernie Moreno, has styled himself as a self-made paragon of success, but an old legal dispute with a former business partner raises questions about that narrative—that’s what Sam Brodey discovered after digging through that case last week.

Conservative icon Matt Schlapp is having a rough week, with Republicans mocking the decline of his once-storied CPAC conference and new subpoenas in his sexual assault lawsuit targeting an alleged document shredding frenzy in CPAC offices, hinting at a potential cover-up. I’ve got a wild exclusive story for you here.

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