Sunshine Week: Shining a light on inaugural committees
The election of Donald Trump brought with it a great number of changes and legal challenges from his first day in office onwards. His inaugural committee, which raised a record-smashing amount of cash, has been at the center of controversy and is under investigation by Robert Mueller and the U.S. Attorney’s Office for the Southern District of New York because of its connections to foreign governments and straw donors.
Now, an element of H.R. 1, the Inaugural Fund Integrity Act looks to enforce greater transparency from those committees. H.R. 1, House Democrats’ massive overhaul of transparency, campaign finance and lobbying rules, passed on Friday on a strict party-line vote.
Inaugural committees are created by the President-elect who appoints its members to run the inaugural ceremony and the parties and other activities connected to it. The FEC has little oversight on these committees, only requiring them to report all donations over $200 no later than 90 days after the inauguration.
Trump’s inaugural committee smashed records, raising a whopping $107 million. Comparatively, President Barack Obama, who previously held the record, raised $53.2 million in 2009. Much of Trump’s inaugural committee’s cash came from 250 people or organizations which contributed 91 percent of the funds, 47 of those donors gave $1 million or more.
“Dark money” sources provided $2 million worth of contributions to Trump’s committee, the first inaugural committee that reported a significant amount of donations from essentially untraceable sources. A mystery LLC that contributed $1 million to the fund has links to the dark money Wellspring Committee and to the executive vice president of the Federalist Society. That group was also tied to a series of ads run in support of Justices Gorsuch and Kavanaugh. A new report found that several shell companies that gave to the committee have ties to foreigners.
Many of the companies that contributed to the fund benefited from the Trump administration in one way or another. More than half of the federal contractors that contributed to the inaugural committee, corporations like Dow Chemical or CoreCivic, received government contracts or favorable treatment from the administration.
Tax filings reveal few details on how large portions of the record-breaking funds were spent. Obama’s five days of inaugural celebrations cost around $51 million in 2009. Comparatively, in 2017 the Trump committee spent more than $97 million on only two days worth of activities. Two vendors alone received double-digit millions from the inaugural committee, one of the vendors is run by an advisor and friend of First Lady Melania Trump.
Originally introduced on Dec. 17, 2018 and re-introduced at the end of February before being added to H.R. 1, the Inaugural Fund Integrity Act (IFIA) was developed by freshman member and Vice Chair of the House Judiciary Committee Rep. Mary Gay Scanlon (D-Pa.). The bill is straightforward in addressing some of the controversies that have swirled around Trump’s inaugural committee.
The first section of the bill makes it unlawful for an inaugural committee to accept a donation from a corporation or from a foreign national. The IFIA also prohibits the use of “straw donors,” which are people who move their donations through shell companies to hide the origin of the money.
Additionally, the legislation would restrict how the funds an inaugural committee receives are used to just inauguration festivities, banning personal use of the money. The IFIA also sets a cap on how much an individual can donate to the committee at an aggregate of $50,000.
Reporting rules are tightened under the proposed legislation, for instance, each donation at or over $1,000 must be disclosed to the FEC no later than 24 hours after the donation is received. Committees’ final reports must be filed by 90 days after the inauguration and include names and street addresses of every donor equal to or over $200.
Scanlon said that her work began on drafting the IFIA not long after she was sworn in in November 2018.
“I began meeting with election law experts to explore ways in which we might address the influx of dark money and other factors undermining our elections,” she said, noting her motivation stemmed from media reports on alleged abuses by the Trump inaugural committee.
Scanlon looked to rectify the “significant gaps” in the laws that oversee inaugural committees.
“In order (to) restore faith in our democratic institutions, we need to write the ethical norms circumvented by this administration into law,” she said.
With the passage of H.R. 1 through the House, Scanlon predicted there will be “considerable pressure from voters” on the Senate to take up and pass the legislation. However, it is highly unlikely the Senate will touch H.R. 1 since Senate Majority Leader Mitch McConnell has harshly criticized the legislation.
Organizations like the left-leaning Public Citizen group have pushed for changes to how inaugural committees operate for some time. Craig Holman, a government affairs lobbyist for Public Citizen, hoped that something will be done to better regulate inaugural committees.
“With the potential for influence-peddling and self-dealing at an all-time high, it is imperative that the financing of inaugural events be closely regulated, subject to contribution limits, source prohibitions and full disclosure,” he said. “I long for the days of Thomas Jefferson’s inauguration when he simply walked from the White House to the Capitol, was sworn in, and walked back home.”
Edit: This story was updated on March 11 to remove a paragraph incorrectly stating Tom Barrack is under investigation for ties to Saudi Arabia.
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