Trump campaign accused of using ‘transfer’ providers to hide $ 170 million in payments

An ethics watchdog group has accused President Donald Trump’s reelection campaign of obscuring campaign spending worth nearly $ 170 million through so-called “transfer” providers linked to campaign leadership in instead of revealing the true recipients of the funds.

In a complaint filed by the FEC on Tuesday, the Washington-based nonpartisan group Campaign Legal Center said that American Made Media Consultants and Parscale Strategy, two companies created and run by campaign leaders, including former campaign manager Brad Parscale, have disguised themselves as providing a variety of campaign services, when in reality they have essentially served as “distribution center” companies distributing contracts and payments to various subcontractors and vendors without disclosing to the final recipients of the donor money .

Since 2019, the Trump campaign and the Trump Make American Great Again committee, a joint fundraising committee with the Republican Party, have reported that they paid American Made Media Consultants and Parscale Strategy nearly $ 170 million for services such as fundraising , digital consulting, print and online advertising, video production, list rental, software and subscriptions, much of which, according to public records and media reports, appears to be outsourced to other companies that have not been reported in the records. disclosure as paid by the campaign.

The failure to disclose campaign payments to subcontractors, the Campaign Legal Center wrote in the complaint, is a violation of the Federal Election Commission rule requiring campaigns to detail disbursements to their final suppliers.

“By failing to report payments to true campaign sellers and employees, the Trump campaign and the Trump Make America Great Again Committee have violated, and continue to violate, the transparency requirements of federal law and undermine the vital role of information public that the reports must comply, “the Campaign Legal Center wrote in the complaint.

“The fact that the campaign has not detailed disbursements to its final suppliers means that the public remains in the dark about the entities working for the Trump campaign, the nature of their services and the total amount paid to them” the complaint continued.

“This is just a political theater 100 days from the election,” Parscale, now senior campaign adviser, told ABC News.

“AMMC is a campaign provider responsible for organizing and executing media purchases and related services at fair market value,” Trump campaign communications director Tim Murtaugh said in a statement to ABC News when asked about American Made Media’s role in the campaign and payments. “AMMC does not earn commissions or fees. It develops efficiencies and saves campaign money by providing these in-house services that would otherwise be performed by external providers. The campaign reports all payments to AMMC as required by the FEC. The campaign complies with all campaign finance laws and FEC regulations. ”

The Campaign Legal Center’s complaint comes immediately after a Business Insider report that the Trump campaign is conducting an “internal review” of his spending in the years after Parscale’s departure as campaign manager. Jeff DeWit, who recently joined the Trump campaign as its chief operating officer after resigning as NASA’s chief financial officer, told Business Insider that this is a review of all campaign contracts and expenses, and was not focused on Parscale. ABC News has not independently verified the Business Insider report, and the Trump campaign did not immediately respond to ABC News’ inquiry about the reported review.

Parscale has various interests in companies doing campaign work, but the details of their compensation for those companies are unclear because they are privately owned.

Parscale’s digital firm, Parscale Strategy, which received more than $ 2.5 million from the campaign and the TMAGA committee in the 2020 cycle alone, has played the role of a conduit provider by paying the salaries of several of the company’s top aides. Trump campaign, according to the Campaign. Legal center and multiple media reports cited in the complaint.

The Trump campaign, the Republican National Committee, and the president’s various fundraising vehicles have paid more than $ 35 million in total since 2017, according to FEC data.

The Wall Street Journal reported last year that Parscale was also involved in the creation of American Made Media Consultants, but tweeted in February last year that it does not own the company and does not receive “any percentage of campaign ad purchases.”

So far in the 2020 election cycle, American Made Media has received $ 167 million for the Trump campaign and its joint fundraising committee, and more than half of that went to “placed media” and online advertising. , as revealed by the campaign revelations. Other payments to the company cover various digital, software and web consulting services.

According to the complaint, among subcontractors who are known to have served the Trump campaign, but were not reported to be paid by the campaign, is software company Phunware.

Various media reports and statements from the company itself show that American Made Media hired the Austin, Texas-based company to create an app, launched in April, that helps supporters of the president participate in the campaign through a mobile platform that includes social news and news, volunteer registration, local event scheduling, and mobile ticketing for in-person events.

Financial disclosure reports filed with the Securities and Exchange Commission show that American Made Media paid or owed Phunware around $ 3 million in 2019 and that in the first quarter of 2020, American Made Media was the company’s primary customer. . Phunware did not immediately respond to ABC News’ request for comment.

Parscale has repeatedly touted the campaign’s direct involvement in creating and launching the app, including a move to focus on its possible role as a surrogate for in-person demonstrations during the coronavirus pandemic.

Another sub-vendor that the complaint is paying for through American Made Media is Harris Sikes Media, which is listed as a television ad placement agent for the Trump campaign, according to ad purchase records filed with the Federal Commission. of Communications. Two companies led by Trump campaign digital director Gary Coby, Realtime Media, which places campaign ads on Snap, and Opn Sesame, which provides peer-to-peer text messaging services, are also among the undisclosed subcontractors of American Made Media, according to the complaint. Harris Sikes Media and Opn Sesame did not immediately respond to ABC News’ request for comment. The Trump campaign has not responded to questions from ABC News about those companies.

Campaign Legal Center’s director of federal reform, Brendan Fischer, told ABC News that it’s not uncommon for campaigns to have sub-sales that aren’t detailed, and that’s not unreasonable in some circumstances. An example of this type, Fischer said, would be if a campaign contracts with a media consulting firm to produce its television commercials and the media consulting firm subcontracts with a cameraman. But it becomes a potential problem when the final recipient of the money is not disclosed intentionally or substantially, Fischer said.

In 2017, the Campaign Legal Center filed a similar complaint from the FEC against the campaign by Hillary Clinton and the Democratic National Committee for their failure during the 2016 election to properly disclose an opposition investigation contract with Fusion GPS, which produced the now infamous Trump-Russia dossier, for listing it in the regular legal and consulting services by his law firm, Perkins Coie. It is not yet known how much the Fusion GPS contract was, but the Clinton campaign paid the law firm a total of $ 5.6 million during the 2016 election cycle, and the DNC paid the firm a total of $ 6.7 million, including $ 66,500 for “research consulting”. “

The scale and scope of the Trump campaign’s opaque spending through American Made Media and Parscale Strategy are unprecedented, Fischer said.

“This $ 170 million scheme means that voters are left in the dark about a large amount of money that the Trump campaign is spending,” Fischer said. “Voters don’t know which individuals or entities are being paid by the campaign, how much they are being paid and what and what they are being paid for.”