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Follow the Money!

DUBUQUE, IA - JANUARY 30: A vendor sells merchandise outside a rally for Republican presidential candidate Donald Trump at the airport on January 29, 2016 in Dubuque, Iowa. Trump is in Iowa trying to gain support in front of the state's February 1 caucuses. (Photo by Scott Olson/Getty Images)

(Photo by Scott Olson/Getty Images)

The US political news was dominated this week by stories about Donald Trump’s floundering campaign. On Monday, he fired his campaign manager, Corey Lewandowski, a longtime confidante whose strategy to “let Trump be Trump” apparently ran afoul not only of the Republican political establishment but of Trump’s own children. But early Tuesday there was worse news yet, in the form of new information about the Trump campaign’s ailing finances.

According to the politically-independent Federal Elections Commission (FEC), Trump had only $1.3 million in his campaign account at the end of May. This might be enough to run a campaign for a Senate seat, but not a presidential campaign a few months away from the election. By contrast, Hillary Clinton’s campaign reported a balance of more than $42 million. And she outpaced Trump significantly in fundraising as well, bringing in $18.6 million in donations compared to his $3.1 million. As if that weren’t enough, some of the Trump campaign’s expenditures also raised eyebrows, in particular the more than $1 million that the campaign paid to Trump-owned companies, including his Mar-a-Lago Club and Trump Tower, which served as campaign venues. Though not a clear violation of campaign finance laws, which are designed to prevent candidates from enriching themselves by running for office, Trump does seem to have crossed over into questionable territory.

Before getting to Trump,  here’s a general point about how campaign finances are often treated in the American political media. Though the financials of campaigns do provide important information about how skillfully the campaign is managed, or about the degree of commitment certain donors have displayed, there is also a tendency to treat the money race as somehow equivalent to, or even more important than, the race for votes. And, since the usual logic goes that campaign money is centrally important for buying the expensive TV advertising that is supposed to sway undecided voters, there is also an implicit message here that money equals political speech. These are both ideas that should not be taken as givens by anyone who cares about democracy. And yet inevitably, donors and campaigns engage in a race to raise and spend ever more money. In 2012, the Obama and Romney campaigns each raised and spent around $1 billion apiece.

So for all his terrifying and repugnant statements, you have to at least give Trump this: he upended this undemocratic narrative that running a winning campaign entails raising lots of money. Early on, Jeb Bush was the presumptive front-runner among Republicans precisely because his campaign had scooped up massive amounts of money, mostly from top donors, before the race had even started. On the other hand, Trump appealed to many of his followers on the grounds that he was rich enough to finance his own campaign and therefore immune to the lobbying of donors or special interests. Then he ran an extremely lean campaign with minimal infrastructure and paid advertising, while skillfully using the media to keep his candidacy and his name in front of the public.

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But this wasn’t his first innovation in campaign financing. In an earlier foray into presidential politics as the nominee of the Reform Party in 2000, Trump timed his campaign stops to coincide with a well-paid gig as a motivational speaker. Of this strategy, he opined that ”It’s very possible that I could be the first presidential candidate to run and make money on it.” With his repeated references in his speeches to his business successes, his outright pitches for products like his book The Art of the Deal, and his strategic use of his own properties as backdrops, Trump has clearly decided that he can make some money in his 2016 run as well. In this, he actually follows other major-party candidates, including Newt Gingrich, who shamelessly promoted his books during his campaign for president in 2012. (Gingrich is currently campaigning for Trump, and is being discussed seriously as a Trump running mate.) And then there’s 2008 VP candidate Sarah Palin (another Trump endorser) who quit her job as Governor of Alaska to milk the conservative celebrity circuit created by right-wing media. Since 2008, she has dipped in and out of the political spotlight – largely in the service, it seems, of promoting a new book or reality TV show.

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(Photo by Chip Somodevilla/Getty Images)

It was precisely this Palinesque self-promotion of the Trump brand that made many observers doubt the seriousness of Trump’s candidacy from the start, and his current financial disclosures are again raising questions about his commitment to running a winning campaign. But assuming that he is actually in the race to win it, does he actually have, or can he raise, the necessary funds to run even a lean campaign?

Trump has appealed to voters, and, presumably, pragmatists in the Republican Party, by saying that he is so rich and successful that he can at least partially self-fund his campaign. The promise of this is twofold: that he is therefore not (or at least, less) beholden to influence-peddling from wealthy donors, and that he could potentially free up money for the Republican Party to put into other races.

But what if that’s not true? Trump has repeatedly refused to disclose proof of his wealth, which he claims to be around $10 billion. But there is persistent speculation that he really isn’t worth anywhere near that, and given his extensive real estate holdings, a good portion of his assets are likely not liquid. If he isn’t as able to self-finance as he says he is, then he will have to raise money, which means relying to some degree on wealthy donors.

But—barring the fact that this is a particularly controversial candidate—why would wealthy donors come forward at this point, after Trump has spent the past months denouncing their undue political influence? How, moreover, would a donor feel about his or her contribution getting redirected back to Trump-owned businesses as campaign expenses? Or about contributing to a campaign where the candidate can “loan” his campaign some money and then “repay” himself (as Trump has already done), while the donors have no such option of repayment? Then there is the further issue of Trump’s ability and willingness to actually make the kinds of personal connections that big donors expect. According to Politico, a nervous Republican National Committee chairman Reince Priebus apparently impressed upon Trump that he needed to step up his efforts at courting top Republican donors. But he met with little success: Trump apparently called three donors before giving up.

Many people have called Donald Trump a con artist—usually in reference to some of his dodgier business ventures. Most notorious is Trump University, the subject of a current legal case in which Trump himself is accused of defrauding “students” with high-pressure sales tactics and false promises of learning the secrets of how to make money in real estate. But it remains to be seen whether his biggest mark yet isn’t in fact the Republican Party. Unless something surprising happens at the convention, Republicans appear to be saddled with a candidate who may be the self-funding billionaire candidate he presents himself to be, or who may be a new kind of political grifter, using the party fundraising apparatus and a clever interpretation of campaign finance laws to line his own pockets.

Susan Hegeman

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1 kommentar

  1. Excellent and insightful analysis. Thanks to you, from colleagues at Stanford University.

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