Trump's Campaign Finance Law Violations: A Deep Dive

Former US President Donald Trump has been accused of breaking campaign finance laws in several instances. In 2023, Trump was indicted on 34 felony charges of falsifying business records in the first degree. The charges were related to hush-money payments made to two former mistresses, including Stormy Daniels, to buy their silence during the 2016 election campaign. Trump allegedly concealed these payments by falsely labelling them as legal expenses, violating the Federal Election Campaign Act. In addition, a watchdog group accused Trump's 2024 campaign and related political committees of violating campaign finance law by concealing payments of $7.2 million in legal fees through an intermediary firm. Trump has also been accused of illegally using his leadership PAC to raise and spend funds for a potential 2024 presidential campaign without officially filing his candidacy. These allegations highlight potential loopholes in campaign finance laws and the need for stricter enforcement by the Federal Election Commission.

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

During his 2016 presidential campaign, Donald Trump, through his former personal attorney Michael Cohen, arranged hush-money payments to two former mistresses: Stormy Daniels and Karen McDougal. Daniels, an adult film star, received a $130,000 payment in exchange for keeping quiet about a sexual encounter she had with Trump in 2006. In McDougal's case, Cohen arranged for American Media Inc. (AMI), the corporation that owns the National Enquirer, to buy the rights to her story and then not publish it. McDougal, a former Playboy model, received a $150,000 payment from AMI after claiming she had a 10-month affair with Trump in the mid-2000s.

The hush-money payments were intended to influence the election and thus constituted campaign spending. Under the Federal Election Campaign Act, candidates for federal office must disclose such spending to the public. However, Trump failed to do so, violating campaign finance laws. Cohen pleaded guilty to campaign finance crimes in conjunction with the payments in 2018 and was sentenced to three years in federal prison.

In March 2023, Trump was indicted on 34 felony charges of falsifying business records in the first degree related to the hush-money payments. He pleaded not guilty to all charges. The indictment alleged that Trump concealed the payments by falsely labelling related transactions as legal expenses. In May 2024, Trump was convicted on all 34 counts of falsifying business records. In January 2025, he was sentenced to an unconditional discharge, meaning no jail time, probation, or fines, but the conviction remains on his permanent record.

Violating the Federal Election Campaign Act

The Federal Election Campaign Act (FECA), passed in 1974 after the Watergate scandal, is built on the principle of transparency. Candidates for federal office must disclose to the public how much money they are spending on their campaigns, and for what. Failing to disclose spending to influence the election can be a civil or even criminal violation.

In 2016, 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 a limited liability company he set up for the occasion, Essential Consultants LLC, in exchange for keeping quiet about a sexual encounter she had with Trump in 2006. In McDougal's case, Cohen arranged for AMI, the corporation that owns the National Enquirer, to buy the rights to McDougal's story and then not publish it.

Trump's affairs with these women had ended years ago, and Cohen contacted them in 2016 because Trump's team worried that disclosure during the campaign season might damage him politically. Paying these ex-lovers to keep silent helped his campaign—exactly the sort of expense that Trump's campaign was legally required to disclose on campaign spending reports filed with the Federal Election Commission.

Trump's failure to report these expenses violated the FECA. To make matters worse, Trump took further steps to conceal the payments. Working with Cohen and with executives at his business, the Trump Organization, Trump arranged schemes to hide the payments. For the payments to Stormy Daniels, Cohen fronted the money, then issued fake legal invoices to the Trump Organization, which paid them from business coffers as if they were legal bills rather than hush-money payments. For the payments to McDougal, Cohen arranged for AMI to pay her off.

In 2018, Cohen pleaded guilty to two federal campaign finance crimes carried out to benefit Trump, who was identified as "Individual-1". Cohen told a federal judge and Congress that he arranged these payments "at the request of the candidate" and that his crimes were committed "for the benefit of, at the direction of, and in coordination with" Trump.

In 2023, Manhattan prosecutors accused Trump of 34 felonies for allegedly falsifying business records in a bid to violate campaign finance laws. The aggravating factor in this case is Cohen's admission that he arranged a $130,000 payment to Daniels in consultation with Trump and to aid Trump's 2016 presidential campaign. The prosecutors' statement mentions Cohen's guilty plea in 2018 to two federal campaign finance crimes and says that Trump and others sought to conceal "attempts to violate state and federal election laws".

In addition to the above, a campaign watchdog group, the Campaign Legal Center, filed a formal complaint with the FEC in 2024, accusing Trump's presidential campaign and related political committees of concealing payments of $7.2 million in legal fees by paying them through an unrelated shell company, Red Curve, in violation of campaign finance law. The complaint also said that Red Curve advanced payments for the legal costs to the Trump committees as part of the payment scheme, potentially violating a campaign finance law that prevents corporations from giving money to candidates.

Falsifying business records

In April 2023, former US President Donald Trump was indicted on 34 felony charges of falsifying business records in the first degree. The charges related to hush money payments made shortly before the 2016 election to cover up an alleged affair with adult film star Stormy Daniels.

Trump was accused of illegally disguising reimbursements to his former lawyer, Michael Cohen, who made the hush money payment to Daniels under Trump's direction. Cohen had pleaded guilty in 2018 to making the payment for the principal purpose of influencing the 2016 election, a federal violation of campaign finance law.

The 34 charges corresponded to a series of monthly payments of $35,000 made to Cohen throughout 2017, reimbursing him for the $130,000 payment to Daniels. Each payment was accompanied by an invoice portraying the payment as a "retainer" for Cohen's "legal services". A bookkeeper generated a record for each payment, known as a voucher, with the description "legal expense". However, prosecutors argued that Trump knew the payments were to reimburse Cohen for the Daniels payment, not for his legal expenses.

Under New York law, falsification of business records is a crime when the records are altered with an "intent to defraud". To be charged as a felony, prosecutors must also show that the offender intended to "commit another crime" or "aid or conceal" another crime when falsifying records. In this case, the other crime was a violation of a New York election law that makes it illegal for "any two or more persons" to "conspire to promote or prevent the election of any person to a public office by unlawful means".

Trump pleaded not guilty to the charges, and his attorneys said they would seek to have them dismissed, calling the indictment a “political prosecution”. However, in May 2024, a jury found Trump guilty on all 34 counts.

Using shell companies to conceal payments

In 2018, a campaign watchdog group, the Campaign Legal Center, filed a formal complaint with the Federal Election Commission (FEC) accusing Donald Trump's 2024 campaign and associated political committees of violating campaign finance law. The complaint alleged that Trump used an intermediary firm, Red Curve, run by the treasurer for the Trump campaign, Bradley Crate, to "conceal payments for legal services" totalling $7.2 million.

Red Curve did not appear to offer legal services, and instead operated as a "conduit" to hide the true nature of the payments. This violated the reporting requirements of the Federal Election Campaign Act, which mandates that committees disclose detailed information about payments for services, including the amount paid and who is being paid.

The complaint also suggested that Red Curve advanced payments to the Trump committees, potentially violating a law that prevents corporations from donating money to candidates. Saurav Ghosh, the director of federal campaign finance reform at the Campaign Legal Center, stated that if Red Curve is considered a corporation under federal campaign finance law, "then that's illegal on its face."

This is not the first time that Trump has been accused of using shell companies to conceal payments. In 2016, Trump arranged for hush-money payments to two former mistresses, Stormy Daniels and Karen McDougal, to keep quiet about extramarital affairs. Trump's former lawyer, Michael Cohen, paid Daniels $130,000 through Essential Consultants LLC, a limited liability company that Cohen set up specifically for this purpose. For the payments to McDougal, Cohen arranged for AMI, the corporation that owns the National Enquirer, to buy the rights to McDougal's story and then not publish it.

To conceal the payments, Cohen created fake legal invoices, which were paid from the business coffers of the Trump Organization as if they were legitimate legal bills. Trump personally signed at least one of these checks. These actions by Trump and his associates constituted a violation of campaign finance laws, as they failed to disclose spending intended to influence the election.

Using campaign funds to pay legal bills

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 transaction. In McDougal's case, Cohen arranged for AMI, the corporation that owns the National Enquirer, to buy the rights to McDougal's story and then not publish it.

The issue here is not Trump's sexual encounters, nor even the fact of the hush money. In general, there is nothing illegal about a wealthy individual paying off former mistresses to keep silent about extramarital affairs. However, Trump was a candidate for federal office at the time, and the hush money was intended to influence the election. As Trump's lawyer, Rudy Giuliani, later confirmed, the purpose of this expense was obviously campaign-related.

Under the Federal Election Campaign Act, passed in 1974 after the Watergate scandal, candidates for federal office must disclose to the public how much money they are spending on their campaigns and what they are spending it on. Failing to disclose spending to influence an election can be a civil or criminal violation. Trump's failure to report these expenses violated the Federal Election Campaign Act.

To conceal the payments, Trump and Cohen devised a scheme in which Cohen submitted false invoices to the Trump Organization, which paid them from business coffers as if they were legal bills rather than hush-money payments. Trump personally signed at least one of the checks.

In 2018, Cohen pleaded guilty to two federal campaign finance crimes carried out to benefit Trump, who was referred to as "Individual-1" in the criminal information. Cohen told a federal judge and Congress that he arranged these payments at the request of Trump and that his crimes were committed for the benefit of, at the direction of, and in coordination with Trump. Cohen served a little over thirteen months in federal prison for these felonies.

While Trump has not been charged with campaign finance violations by federal prosecutors, he was indicted on 34 felony charges of falsifying business records in the first degree by a grand jury in Manhattan in March 2023. These charges center 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 payoff to Daniels.

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