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A Campaign Is Not a Personal Piggy Bank

Candidates can spend campaign cash only on their effort to win office.

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center for Justice.

The Trump campaign looks like a Mobius strip, with campaign money fold­ing back on itself and ending up in the hands of Trump busi­nesses and his family. Indeed, Donald Trump’s campaign has been doing this for months. The Trump campaign can choose any vendors it wishes for legit­im­ate campaign expenses—even if they’re owned by his firm or family. In May, for example, he paid his busi­nesses $1 million while the campaign was decidedly cash poor with only $1.3 million cash on hand.

To refill his campaign coffers, Mr. Trump can’t raise money from anyone on the plan­et—just Amer­ic­ans. This is a rule he may have broken email­ing Members of Parlia­ment in the U.K., Iceland and Australia asking for campaign cash.

Moreover, Mr. Trump can’t use campaign money for anything his heart desires. Rather, as I explain in my new book on campaign finance, Corpor­ate Citizen, money in a campaign for pres­id­ent is subject to special FEC rules and federal elec­tion laws.

The Trump campaign should take some care to not viol­ate the FEC’s personal use rules, which can result in crim­inal prosec­u­tions. One time Demo­cratic pres­id­en­tial hope­ful John Edwards was prosec­uted for personal use of campaign funds, includ­ing paying a mistress to keep quiet. Edwards walked free after a jury dead­locked in his case.

But not every­one is as lucky with the law as John Edwards. Running afoul of these rules is a bipar­tisan matter. Repub­lican polit­ical oper­at­ive Tyler Harber pleaded guilty to using Super PAC money for personal use, among other crimes like coordin­at­ing between a Super PAC and a candid­ate commit­tee. He got two years in federal prison. Demo­cratic campaign treas­urer Kinde Durke also pleaded guilty to taking campaign money for personal use from multiple candid­ates. She got eight years in jail.

Accord­ing to the Justice Depart­ment, federal campaign crimes include the restric­tion that “[n]o person may convert funds contrib­uted to a federal candid­ate to his or her personal use.” This part of the federal law (2 U.S.C. § 439a) was updated in 2002 to clarify that “a contri­bu­tion or dona­tion shall be considered to be conver­ted to personal use if the contri­bu­tion or amount is used to fulfill any commit­ment, oblig­a­tion, or expense of a person that would exist irre­spect­ive of the candid­ate’s elec­tion campaign … includ­ing—(A) a home mort­gage, rent, or util­ity payment; (B) a cloth­ing purchase; (C) a noncam­paign-related auto­mobile expense; (D) a coun­try club member­ship; (E) a vaca­tion or other noncam­paign-related trip; (F) a house­hold food item; (G) a tuition payment; (H) admis­sion to a sport­ing event [or] concert, … and (I) dues, fees, and other payments to a health club …”

The DOJ can prosec­ute conver­sions of campaign funds as honest services fraud if the wrong­do­ing was done by a campaign staffer.  Other­wise the crime can be prosec­uted as mail or wire fraud.  For example in 2015, the Justice Depart­ment prosec­uted a former New Jersey mayor for receiv­ing “several campaign contri­bu­tions from area busi­nesses and busi­nesspeople and then, instead of depos­it­ing the dona­tions into his campaign accounts, either cashed the checks for his personal use or depos­ited the checks into his personal bank accounts.” Moreover, if FEC filings are fals­i­fied to hide personal use that opens up another avenue of prosec­u­tion under the false state­ments stat­ute.

So as I told the New York Times, noth­ing so far looks like it is out of bounds in terms of the money in the Trump campaign going for meet­ing spaces in Trump-owned prop­erty and airplane rides on Trump-owned aircraft.  But the Trump campaign, like all campaigns, needs to be care­ful not to viol­ate the personal use laws because a campaign treas­ury is not a personal piggy bank. Just ask ex-Congress­man Jesse Jack­son Jr. who is on parole after nearly two years in jail for his personal use of campaign funds for buying clothes and memor­ab­ilia.

But Trump may be in hot water on the fundrais­ing side as there is already a complaint at the FEC ques­tion­ing the campaign’s soli­cit­a­tions of foreign donor­s—a decidedly illegal no-no.