Save America, one of former President Donald Trump’s political organizations, is seeking a US$60 million refund from Make America Great Again, Inc., another Trump political organization that is less strictly regulated by federal rules.
Save America has paid Trump’s legal fees connected to multiple investigations into alleged criminal activities and is now down to less than $4 million in its account, The New York Times reported on July 31, 2023. It started 2022 with $105 million in the bank.
Trump’s use of political action committees, often known as PACs, to pay his mounting legal fees has raised questions about these organizations and how they spend money.
First, what’s a PAC, anyway?
We asked Richard Briffault, a scholar of campaign finance law, to explain what is behind PACs and whether using them to pay for personal legal expenses is permitted. Here are three key points to understand:
1. PACs are not all made equal
PACs are organizations that raise and spend money on federal elections. A PAC may contribute money to a candidate or political party, or spend independently to promote or attack a candidate or party.
Corporations, labor unions and other ideological groups originally set up PACs many decades ago as a way to participate in federal elections. Most PACs today are either connected to a sponsor organization or have a particular issue agenda. These PACs typically donate to or spend money in support of multiple candidates.
Some PACs, however, are directly created by candidates or their supporters.
Leadership PACs, which date back to the late 1970s, are created by candidates or officeholders to support other candidates for federal office, but not the candidate’s own campaign. They allow candidates to help fellow party members, strengthen their party’s position and boost their own efforts to win leadership positions.
A super PAC, meanwhile, is a PAC that does not contribute to candidates directly at all, but instead spends money independently to promote or oppose candidates. Like other PACS, a super PAC can pay for advertising, polling, opposition research and get-out-the-vote efforts. But the super PAC cannot coordinate its activities with the candidate it is supporting.
Super PACs emerged in 2010 following a controversial court of appeals decision. The ruling found that if a PAC does not directly contribute to or coordinate with a candidate, the ordinary limits on money contributions to PACs do not apply.
Federal law caps individual donations to most PACs, including leadership PACs, at $5,000 per year.
The lack of caps on donations to super PACs is what merits the modifier “super.”
The case that gave rise to super PACs involved an independent organization not connected to any campaign or candidate. But some super PACs, including Trump’s, are also created by people closely associated with a candidate and devote their spending entirely to the support of that candidate.
Because contribution limits do not apply to super PACs, they have become an essential component of election campaigns over the last 13 years.
2. PACs can sometimes pay legal fees
Campaign money is supposed to be used for campaign purposes and not for what election law refers to as “personal use,” such as a political candidate’s home mortgage.
It is illegal to use campaign money to pay for personal expenses that would have occurred whether or not the candidate was running for office.
The Federal Election Commission has ruled that campaign funds can be used to pay a candidate’s legal fees if an investigation relates directly to the election or the candidate’s time in political office.
3. Trump’s case enters murky territory
The Federal Election Commission ruling means that election funding laws could allow Trump to use money from his PAC to pay for legal fees in connection with the New York hush money case – which relates to Trump’s 2016 presidential campaign – as well as the federal and Georgia investigations of Trump’s role in challenging the results of the 2020 election.
But money raised for a campaign could probably not cover the Department of Justice’s Mar-a-Lago documents case, which does not involve either Trump’s campaign or his time in office.
The FEC has, in some cases, also determined that a politician may use campaign funds to pay for up to 50% of legal expenses that do not relate directly to allegations arising from campaign or officeholder activity.
This is true if the politician is required to provide substantive responses to the media while a candidate, regarding alleged illegal activity. So, campaign money might be used in the Mar-a-Lago case.
What’s unclear – and possibly unlawful – is whether Trump’s leadership PAC, Save America, can pay for Trump’s legal expenses.
This is because leadership PACs are supposed to spend money on other political candidates, not the candidate who controls the leadership PAC. And in this case, Save America is controlled by Trump.
It’s also not clear whether the money transfers from the super PAC Make America Great Again, Inc, to Save America are consistent with the legal requirement that super PACs operate independently of a candidate’s campaign.
The request for refunds only underscores that concern.
The Federal Election Commission monitors any PAC-related legal issues or violations of election law. But given that the commission is facing “dysfunction and deadlock,” as a former FEC chair has said, there is unlikely to be clarification or enforcement anytime soon.