“The primary concern is to make sure that donors aren’t essentially putting money directly or indirectly into the candidate’s pocket.”
President Trump’s reelection campaign has already spent nearly $1 million in campaign cash at Trump Organization properties, according to new reports, raising renewed questions about the ethics of a sitting president remaining so deeply invested in his private business.
Mr. Trump’s campaign also spent nearly $148,000 at Trump Organization properties, including the Trump International Hotel in Washington, bringing the total spending at such properties to more than $856,000 since the beginning of 2017.
There are both ethical and legal concerns raised by a sitting president’s campaign spending money at businesses owned by the candidate, said Adav Noti, the senior director for trial litigation at the Campaign Legal Center and former assistant general counsel at the Federal Election Commission.
These are concerns unique to Trump: Barack Obama, George W. Bush, and Bill Clinton didn’t own the kind of businesses that their campaigns would spend money at. Noti noted that back in the 1970s, when questions of impropriety were raised, Jimmy Carter divested from his peanut farm.
“No other president has had his own businesses that he patronized as a sitting president, not in recent times,” Noti said.
In terms of the legal questions raised by a campaign paying money to the candidate’s businesses, here is how Noti explained the issues:
- “On the legal side, the primary concern is to make sure that donors aren’t essentially putting money directly or indirectly into the candidate’s pocket by giving money to the campaign that the campaign then spends at the candidate’s establishment,” he told me. “The potential for corruption and bribery is much higher.”
- The other big thing is the campaign must pay the candidate’s business a fair market value.
- If the campaign pays the business more than market value, then the candidate is profiting off campaign contributions.
- But even if the campaign pays the business less than market value, then the business is effectively providing a corporate subsidy to the campaign by allowing it to save that money.
From a simply ethical perspective, setting aside legality, having a campaign pay the candidate’s business is troublesome. This is a new reality for America: Trump presents a unique challenge to our nation’s ethical norms after he refused to divest from his business once he took the oath of office.
“When you have a candidate who is a federal officeholder already and is known to engage in this spending,” Noti said, “there is a fair perception that people who donate to the campaign know that some portion of their money is going to get routed to the candidate because of the history of this spending.”