Trump's Campaign Finance Laws: Legal Or Illegal?

Former US President Donald Trump has been accused of breaking campaign finance laws on several occasions. In 2023, he was indicted on 34 felony charges of falsifying business records in the first degree, with prosecutors alleging that he concealed hush money payments to two former mistresses during the 2016 election campaign. In 2024, a pro-Democratic super PAC accused him of violating federal campaign laws by raising and spending money for a 2024 run without officially filing his candidacy. Additionally, a watchdog group filed a complaint accusing Trump's campaign and related political committees of concealing payments of $7.2 million in legal fees by paying them through an unrelated shell company. Trump has also been criticized for using loopholes in campaign finance laws to pay his legal bills, with estimates suggesting he has spent over $100 million in donor money on legal proceedings.

Trump's hush-money payments to Stormy Daniels and Karen McDougal

In 2016, during his presidential campaign, Donald Trump arranged for hush-money payments to two women he had previously had affairs with: Stormy Daniels, an adult film star, and Karen McDougal, a Playboy model. Trump paid Daniels $130,000 through a limited liability company, Essential Consultants LLC, which his former personal attorney, Michael Cohen, had set up for the occasion. In McDougal's case, Cohen arranged for American Media Inc. (AMI), the corporation that owns the National Enquirer, to pay McDougal $150,000 for the rights to her story and then not publish it.

Trump was involved in "nearly every step" of these hush-money agreements, according to The Wall Street Journal. The newspaper also reported that Trump may have violated federal campaign finance laws through his participation in the deals. Cohen pleaded guilty in August 2018 to campaign finance violations, admitting that he made payments to the two women at the direction of a candidate for political office. Cohen's lawyer, Lanny Davis, said that "Donald Trump directed [Cohen] to commit a crime by making payments to two women for the principal purpose of influencing an election."

In April 2023, Trump was indicted in Manhattan on 34 felony charges of falsifying business records in the first degree. These charges related to the false invoices that Cohen submitted, with Trump's approval, to the Trump Organization for reimbursement for bogus "legal services" that were actually reimbursements for the payoffs to Daniels and McDougal. Because the business records were falsified to conceal another crime (the federal campaign finance violations), they constituted felonies in New York.

In May 2024, Trump was convicted of 34 felony counts of falsifying business records arising from the hush-money payments. In January 2025, he was sentenced in the New York hush-money case, becoming the first U.S. president to face criminal sentencing while preparing to take office. Manhattan Judge Juan M. Merchan handed Trump an unconditional discharge, which means that he will not be punished with prison time, fines, or community service. However, he will have felonies on his criminal record.

Trump's reimbursement to Michael Cohen

In May 2024, a New York jury convicted former US President Donald Trump of 34 felony counts of falsifying business records linked to hush money payments. The conviction was related to reimbursement payments made by Trump to his former lawyer, Michael Cohen, who had paid adult film actress Stormy Daniels $130,000 to suppress allegations of an affair with Trump ahead of the 2016 election.

Cohen testified that the reimbursement payments were falsely labelled as legal retainer fees in Trump's family real estate company's books. He stated that Trump directed him to pay off Daniels and that he would not have done so without being reimbursed. Cohen's testimony was corroborated by phone records, which showed that he was in communication with Trump around the time of the negotiations with Daniels' lawyer. Additionally, Trump's White House assistant testified that Cohen visited the White House and had discussions with Trump during this period.

The prosecution argued that Trump had approved a scheme to disguise the reimbursement payments as legal fees, rather than a repayment for the payment to Daniels. They presented evidence, including bank records, emails, and a surreptitious recording of Trump speaking about a hush money payment. The jury found that Trump had illegally falsified business records to hide his reimbursement to Cohen.

Trump has denied the allegations and claimed that the case is politically motivated. He has also vowed to appeal the conviction, calling it a "political witch hunt".

Trump's violation of the Federal Election Campaign Act

In 2016, Donald Trump, through his former personal attorney and fixer, Michael Cohen, arranged for hush-money payments to two former mistresses: Stormy Daniels and Karen McDougal. Cohen paid Daniels $130,000 through Essential Consultants LLC, a limited liability company that Cohen set up for the occasion. In McDougal's case, Cohen arranged for AMI, the corporation that owns the National Enquirer, to pay off McDougal and then not publish her story.

These payments constituted campaign spending as they were intended to influence the election. As Trump's lawyer Rudy Giuliani later confirmed, the purpose of this expense was obviously campaign-related. Trump's failure to report these expenses violated the Federal Election Campaign Act.

In May 2019, an administrative complaint was filed, alleging that Donald J. Trump for President, Inc. (Trump Campaign) violated the Federal Election Campaign Act by soliciting and directing funds to America First Action, a Super PAC, without regard to the Act's source prohibitions and contribution limits. The Federal Election Commission's non-partisan professional staff recommended finding that the violations were "knowing and willful", but the Commission voted along party lines, failing to secure the necessary four votes.

Manhattan prosecutors allege that Trump concealed hush money payments by falsely labelling related transactions as legal expenses and by arranging for a tabloid publisher to bottle up the story of a woman who said she had a sexual relationship with him. Trump was indicted on 34 felony charges of falsifying business records in the first degree. These charges centre on the false invoices that Cohen submitted, with Trump's approval, to the Trump Organization for reimbursement for bogus "legal services" that were actually reimbursements for the payoffs to Daniels.

In conclusion, Trump's violation of the Federal Election Campaign Act by failing to disclose campaign spending and taking steps to conceal the payments, resulted in legal consequences, including felony charges and indictment.

Trump's violation of campaign finance laws by teasing a 2024 run

In March 2022, American Bridge, a pro-Democratic super PAC, filed a complaint with the Federal Elections Commission (FEC) alleging that former US President Donald Trump was violating campaign finance laws by teasing a 2024 run without officially declaring his candidacy.

The complaint accused Trump of spending "well over" $5,000 in funds related to "advancing his own presidential campaign." According to federal campaign finance laws, Trump was required to file paperwork declaring his candidacy within 15 days of raising or spending over $5,000 on things that could "influence his election."

American Bridge's complaint detailed several instances where Trump commented about a potential 2024 run, including references to his wife Melania as the "future first lady" and stating that he had made a decision about running but couldn't publicly reveal it yet due to campaign finance laws.

The complaint also alleged that funds from Trump's Save America PAC were being used for events and expenses that would promote a potential 2024 campaign, including rallies, consulting payments to former campaign staff, and digital advertising. The PAC was reported to be raising over $1 million per week and spending over $100,000 per week on Facebook advertising alone.

Trump's spokesperson, Taylor Budowich, dismissed the complaint, accusing Democrats of resorting to "cheap gimmicks" and claiming that it had no merit. The FEC's response to the allegations remains unclear, and it is possible that the case may be dismissed or deadlocked along party lines.

Trump's use of campaign funds to pay legal bills

Since leaving office, former US President Donald Trump has been involved in a plethora of civil and criminal litigation. To cover the enormous legal fees, estimated at over $100 million, he has turned to his Political Action Committees (PACs) to pay his legal bills, essentially having campaign donors pay costs for which he would otherwise be personally liable.

Trump has spent campaign money on legal costs in most of the two dozen proceedings he has faced since leaving office. Some of these matters directly relate to his campaigns and actions as president, including lawsuits, investigations, and state and federal prosecutions focused on efforts to overturn the 2020 election and his retention of classified documents after leaving office. However, other legal spending has gone towards purely personal matters that have nothing to do with his candidacy or time in office, such as civil and criminal fraud probes into his business in New York.

Trump has relied almost entirely on donations to his campaign and affiliated PACs to pay his lawyers, with over $100 million raised as of early 2024. Following his 2020 election loss, Trump received more than $250 million in donations from supporters for an "election defence fund". He divided this money between two PACs: his 2020 presidential campaign committee, which he subsequently converted into a freestanding PAC called Make America Great Again (MAGA) PAC, and a second entity called Save America PAC, which is a "leadership" PAC.

Beginning in early 2021, Trump started spending funds from these two PACs on his legal proceedings, including personal matters. Through early 2024, MAGA PAC spent $30 million on Trump's legal expenses, with roughly another $70 million coming from Save America. However, by early 2024, Save America was running out of money, even as Trump's legal fees continued to mount. To boost its cash base, Trump set up a joint fundraising agreement with the Republican National Committee, under which the RNC prioritises funneling money to Save America over filling its coffers.

Trump's use of PAC money to cover so many legal expenses tests the boundaries of current law. While there are permissible ways for candidates to spend donor money on legal expenses, such as legal fees directly related to their campaign or responsibilities in office, it is clear that campaign funds may not be used for legal fees related to personal matters. For these types of expenses, federal elected officials and candidates are allowed to establish personal legal defense funds, subject to strict contribution limits and disclosure requirements.

Trump has not established a legal defense fund to pay his own bills, and he is also not covering most legal costs from his primary 2024 campaign accounts. Instead, virtually all the money for his legal bills is coming from MAGA PAC, Save America, and now MAGA Inc. Due to gaps in campaign finance law, this spending is not necessarily illegal, and it is likely to continue until Congress takes steps to shore up existing rules and enact broader campaign finance safeguards.

Trump's legal spending practices may also run afoul of other rules. Recently, the non-partisan Campaign Legal Center filed a complaint with the FEC alleging that Trump's 2024 campaign, along with Save America and other PACs, reimbursed an accounting firm for millions of dollars' worth of legal costs that the company appears to have illegally fronted to cover the former president's bills.

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