New fundraising tactics raise campaign finance concerns

Amna Nawaz:

The first Republican presidential debate is just two weeks away, and at least eight candidates have met the RNC criteria, which includes collecting 40,000 donors across the country.

Some of those candidates have used creative fund-raising tactics to reach that — reach that threshold. One campaign offered $20 gift cards to people who donated at least $1. Another established a sweepstakes giving away soccer tickets.

Are these methods aboveboard? That's just one campaign finance question being raised in this election.

To help break it down, I'm joined by Adav Noti of the nonpartisan Campaign Legal Center. He previously worked as a lawyer at the Federal Election Commission.

Welcome, and thanks for being here.

Adav Noti, Campaign Legal Center:

Thanks for having me.

Amna Nawaz:

So, gift cards and soccer tickets, is all this aboveboard? Is it legal?

Adav Noti:

Well, in theory, having small donors contribute in large numbers to a campaign is not just legal; it's a good thing for the system.

It helps balance out the disproportionate influence that wealthy donors usually have in campaigns. But what's happening with some of these debate qualification schemes that are going on is that the campaigns are really taking big money, sort of seed money from major donors, and parceling it out to collect these token small contributions, which are not enough to actually run a campaign.

So these are not small-dollar-funded campaigns. They're big-money-funded campaigns. And so, unfortunately, it's another example of big money sort of dominating even these — the system that's intended to broaden the contributions to smaller donors.

Amna Nawaz:

And is that allowed, to take those big money donations and parcel them out that way?

Adav Noti:

Unfortunately, it's allowed. And the incentives are set up so that collecting those large donations of seed money at the beginning can be very helpful to candidates, who are then very grateful to the donors who provided them.

Amna Nawaz:

There's a number of questions around former President Trump's finances, in particular, I want to ask you about, in particular, his post-2020 fund-raising efforts.

We know they're being looked at by the special counsel. And the question is really about whether or not he was raising some of those enormous funds he raised after he lost the 2020 election on the backs of false claims of voter fraud. What does the law say about this?

Adav Noti:

It does look like, under the legal definition of fraud that applies not just in campaigns, but to all sorts of solicitations for money, that the solicitations that the Trump campaign was making in that post-election period were very deceptive and intended to mislead donors into giving to what they thought were election protection efforts, but, in reality, were — the money was not being spent on anything of the kind.

Most of it was just being banked. And so there's a fairly serious claim, potentially, by the Department of Justice that that fund-raising was fraudulent.

Amna Nawaz:

There's this question about the relationship and coordination between Mr. Trump's PAC and his super PAC, one organization requesting a so-called refund of $60 million from the other.

How do you make sense of that?

Adav Noti:

Well, super PACs are supposed to be independent, completely independent of any candidate. And so when you have a super PAC that's exchanging money back and forth with another entity that's controlled by a candidate, it sure looks like coordination, financial coordination, between those entities.

And coordination between a super PAC and a candidate is illegal. So it looks like there is illegal coordination going on between those entities.

Amna Nawaz:

So, if something is found to be illegal, what's the enforceability here?

Adav Noti:

So the problem with — as with many things in the current campaign finance system, is that the federal agency that's supposed to be enforcing the law, which is the Federal Election Commission, essentially does not enforce campaign finance law and has not for quite some time.

And so there are very few consequences for even very serious misconduct. And so it leads to a situation where, each election cycle, we have more and more activity that appears to be illegal under longstanding federal law, but is conducted anyway because there don't appear to be consequences.

Amna Nawaz:

There's another recent report I want to ask you about related to the campaign of Tim Scott and the use of LLCs paying money to these organizations, and we don't know who they are.

How legal and how unusual is that?

Adav Noti:

So, this is another situation where, if the Federal Election Commission were enforcing the law, none of this would be happening.

So, all voters have the legal right to know every dollar that a presidential campaign is taking in and every dollar that it spends. But the trend that we have been seeing, including this cycle from the Scott campaign and others, and going back to 2020 and the Trump campaign, is campaigns using shell companies to hide their spending.

So, the campaign runs all its money through a shell company, and then just reports the payments to the shell company. But the shell company is the one that actually makes the disbursements to the people who are doing the campaign's work. And so it hides from the public where that money is actually going.

Amna Nawaz:

There's one last thing I need to ask you about, just the influence of big donors.

We have seen that growing over time. We saw it just yesterday in the special election in Ohio. How do you see that now?

Adav Noti:

Well, every cycle, the problem of big money dominating elections gets worse.

And that's a combination of the government not enforcing the laws that are on the books, the laws not being updated for the modern era. And in the absence of real enforcement, we're going to continue getting more and more domination of elections by wealthy special interests.

Amna Nawaz:

All right, that is Adav Noti of the nonpartisan Campaign Legal Center.

Thanks for helping us make sense of it all.

Adav Noti:

Thank you.