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So Far Trump’s Re-election Campaign Looks Like a Bankruptcy

The biggest recipients of money are lawyers and consultants.

It’s reas­on­able to wonder just how bank­ruptcy attor­neys make a living if their clients are broke. The answer is bank­ruptcy attor­neys are first in line to get paid out of the bank­ruptcy estate. So even if other cred­it­ors and share­hold­ers get wiped out by a corpor­ate bank­ruptcy, the bank­ruptcy lawyers get paid.

The Trump campaign reminds me of a bank­ruptcy. When I star­ted as a lawyer in 2001 there were a spate of huge corpor­ate bank­ruptcies: most famously those of Enron, World­Com, Adelphia, and Tyco. And as a young corpor­ate asso­ci­ate I spent a lot of time filing cred­itor claims in bank­ruptcy court, and if truth be told, being on the receiv­ing end of claims filed in bank­ruptcy court against some of my clients.

That’s prob­ably why, ever since the inaug­ur­a­tion, I’ve kept an eye on where the Trump re-elec­tion campaign is spend­ing its money. In August, I wrote that a nice chunk of the campaign’s money was going to Trump’s busi­ness. That’s still the case, although the spend­ing is not quite at the clip it was in the first half of 2017. From August 1 through the begin­ning of March, $67,000 went to vari­ous Trump busi­nesses and $54,000 went to “The Trump Corpor­a­tion” for “legal consult­ing.”

It’s unclear what this “legal consult­ing” is for. However, if it is for costs stem­ming from Robert Mueller’s probe relat­ing to the 2016 campaign, or in Trump’s capa­city as pres­id­ent, the expendit­ures are legal, accord­ing to campaign finance law.

But the biggest winner among the lawyers is Jones Day, with $2.4 million in legal fees for the Trump reelec­tion campaign. The law offices of Alan  S. Futer­fas, (who repres­ent Donald Trump Jr,) have been paid $288,000; Belkin Burden Wenig & Gold­man, LLP (a New York real estate firm) have been paid $33,000; Larocca Hornik Rosen Green­berg & Blaha (whose offices are in the Trump’s build­ing on Wall St.) have been paid $33,000; and D.C.’s Wiley Rein have been paid $10,000.

The other way the Trump reelec­tion campaign looks like a bank­ruptcy estate is that there are liter­ally more expendit­ures going out the door than normal dona­tions from indi­vidu­als coming in. Accord­ing to campaign finance reports on file with the FEC, the Trump reelec­tion campaign’s contri­bu­tions are $9.9 million and their oper­at­ing expendit­ures are $17.2 million  (The reason the campaign is not in the red is trans­fers of large chunks of money from other PACs to the campaign.) 

Of course, just because an entity is bank­rupt does­n’t mean that value can’t be extrac­ted from it by its vendors. This is likely a lesson the Trumps learned from their six corpor­ate bank­ruptcies. In the 1990s, three of Trump’s casi­nos includ­ing the Taj Mahal went bank­rupt as did the Plaza Hotel.  Then he had two more bank­ruptcies in the 2000s: Trump Hotels and Casi­nos Resorts in  2004 and Trump Enter­tain­ment Resorts in 2009. Even after all of these bank­ruptcies, Mr. Trump still claimed to be a billion­aire on multiple occa­sions.

And even though the real pres­id­en­tial elec­tion is not until 2020, the reelec­tion campaign is still spend­ing millions. The big suck­ing sound from the Trump reelec­tion campaign is the sound of money going to Brad Parscale, Parscale-Giles and Parscale Strategy LLC to the tune of $5.6 million. Brad Parscale was just named campaign manager in Febru­ary 2018 – which makes offi­cial a role he’s been play­ing de facto.

Just like in a corpor­ate bank­ruptcy, where the little people get wiped out while the lawyers and the busi­ness­men trot off into the sunset with full bank accounts, the Trump reelec­tion campaign looks like only the white collar guys near the top will make a buck. Maybe it’s just the former corpor­ate lawyer in me, but I’ve seen this movie before.

(Photo: Getty)

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