Trump is running his transition team on secret money
President-elect Donald Trump is keeping secret the names of donors who are funding his transition effort, a break from tradition that could make it impossible to see what interest groups, businesses or wealthy people are helping launch his second term.
Trump has so far declined to sign an agreement with the Biden administration that imposes strict limits on that fundraising in exchange for up to $7.2 million in federal funds earmarked for the transition. By dodging the agreement, Trump can raise unlimited amounts of money from unknown donors to pay for the staff, travel and office space involved in preparing to take over the government.
Trump is the first president-elect to sidestep the restrictions, provoking alarm among ethics experts.
Those seeking to curry favor with the incoming administration now have the opportunity to donate directly to the winning candidate without their names or potential conflicts ever entering the public sphere. And unlike with campaign contributions, foreign nationals are allowed to donate to the transition.
“When the money isn’t disclosed, it’s not clear how much everybody is giving, who is giving it and what they are getting in return for their donations,” said Heath Brown, a professor of public policy at John Jay College of Criminal Justice who studies presidential transitions. “It’s an area where the vast majority of Americans would agree that they want to know who is paying that bill.”
Trump’s transition team, led by Linda McMahon and Howard Lutnick, both of whom were nominated to Cabinet positions last week, has repeatedly said it intends to sign the agreements with the Biden administration, known as memorandums of understanding.
But it blew past deadlines to do so in September and October, and nothing has indicated progress being made to that end in the two weeks since the election. The White House, which is obliged to offer the agreements to presidential candidates under a federal law known as the Presidential Transition Act, has said it is ready to assist the Trump transition to ensure a smooth handover of power.
On Thursday, Sen. Elizabeth Warren, D-Mass., sent a letter to the Biden administration, raising concerns that the Trump transition’s failure to sign the agreements was “uncharted territory” that “threatens the American public.” She asked for an accounting of how the administration was engaging with the Trump transition on the agreements.
“The Trump-Vance transition lawyers continue to constructively engage with the Biden-Harris administration lawyers regarding all agreements contemplated by the Presidential Transition Act,” Brian Hughes, a Trump transition spokesperson, said in a statement responding to queries about the status of negotiations with the Biden administration.
Transition efforts help the president-elect with the complex task of taking over the federal government, including selecting thousands of potential political appointees. Previous transitions, including Trump’s before his first term, have signed the agreements.
Trump’s transition team, formally known as Trump Vance 2025 Transition Inc., has revealed nothing about how much money it hopes to raise, who has contributed to the fund or how it is spending the money.
The current Trump transition, like its predecessors, is set up as a “dark money” nonprofit. Those groups typically do not have to disclose their donors, even to the IRS. But unlike Trump’s team this year, earlier transitions accepted financial support from the General Services Administration, which oversees much of the transition process. In exchange for that federal money, they agreed to conditions that other dark-money nonprofits do not have to follow, like capping individual contributions at $5,000 and disclosing the names of their donors.
When Barack Obama won the presidency in 2008, his transition raised $4.5 million while restricting donations to a maximum of $5,000, and pledging to refuse money from corporations, labor unions, political action committees, lobbyists and registered foreign agents. Nearly 60,000 people contributed, with an average donation of about $75.
In 2020, the Biden transition set a fundraising goal of $7 million and brought in seasoned Democratic fundraisers to help. But when the General Services Administration, spurred on by Trump’s false claims that he had won the election, withheld government funding for weeks, private donations flooded in.
By the time of the inauguration, Biden’s team had raised more than $22 million, with 450 employees on its books. Its disclosure report, released in February 2021, was more than 1,000 pages.
Before the 2016 election, Trump relied on former New Jersey Gov. Chris Christie, a Republican, to run his transition. But, as journalist Bob Woodward later reported, when Trump discovered that Christie had been raising money to pay for that venture, Trump accused him of “stealing” from his campaign and “jinxing” his chances.
Trump fired Christie immediately after the election, replacing him with his running mate, Mike Pence.
The 2016 Trump transition, which did sign the agreement with the General Services Administration, had roughly 120 employees and ultimately disclosed raising $6.5 million and receiving $2.4 million in federal reimbursements. Trump used office space in Trump Tower to interview candidates during the transition, and filings show that his transition spent $258,000 on “rent and utilities,” though not who was paid.
In 2018, that transition donated $150,000 in leftover money to another dark-money nonprofit, the 45 Alliance, which was meant to help Trump’s appointees and reportedly held a reception for them at what was then Trump’s hotel in Washington.
The 2016 transition also paid some $1.8 million in legal fees, much of which was spent after Trump had been sworn in as president. In late 2017, for example, the transition challenged the government’s decision to hand over its emails to Robert Mueller, who was then the special counsel, during his investigation of Trump’s ties to Russia. The group also fought legal battles with New Jersey’s attorney general, which sued it for failing to register properly as a nonprofit with the state.
That transition was eventually wound down and, as required by its settlement with New Jersey, donated the last of its funds to a charity, according to Kory Langhofer, a lawyer for the 2016 transition. The transition chose the Wounded Warrior Project, a nonprofit that helps veterans. That charity said it had received $17,478.
Leading up to this year’s election, Trump’s campaign and groups supporting it raised more than $1 billion, according to federal records, including more than $100 million apiece from three billionaires: Timothy Mellon, Elon Musk and Miriam Adelson.
But opportunities to curry favor with large contributions do not end on Election Day. A traditional post-campaign target has been the presidential inaugural committee, which, as an entity separate from both the campaign and the transition, raises money to fund the parties held to celebrate the handover of power.
In 2016, Trump raised $107 million for his inaugural, including from 30 donations of $1 million each. The attorney general of the District of Columbia later sued, accusing the inaugural committee of misusing funds, including by overpaying for space at Trump’s Washington hotel. The suit was settled for $750,000.
As with campaign donations, contributions to inaugural funds are regulated by the Federal Election Commission, which requires the inaugural committee to file detailed lists of donors. It also prohibits donations from foreign nationals.
Transition funding is not regulated by the FEC. And IRS rules permit the nonprofits in question to accept donations from foreigners without public disclosure.
Max Stier, the president of the Partnership for Public Service, which studies transition operations, said disclosure rules were intended to keep donors from using the transition fund to seek favorable treatment privately from the incoming administration before it even begins.
“The transition government is a little like setting up the universe, pre-Big Bang,” Stier said. “It’s a lot of influence.”
The Trump transition was registered in Florida in August by Jacob Roth, a lawyer for the Dhillon Law Group, a prominent Republican firm. This month, Roth also registered Trump’s inaugural fund in Florida, and the inauguration group began seeking individual donations, from $50,000 to $1 million, a fundraising flyer reviewed by The New York Times shows.
Roth did not respond to a request for comment.
Because the transition has also failed to sign a separate agreement with the Justice Department, the FBI has been unable to conduct background checks needed to grant appointees security clearance. As a result, the transition is reportedly using private firms to vet candidates, leaving open the possibility that federal law enforcement may never properly review Trump appointees.
The Trump transition has also left unsigned a memorandum of understanding with the White House that outlines how appointees and other staff members can gain physical access to federal agencies and classified information before Inauguration Day on Jan. 20. That agreement is contingent on the transition submitting and posting publicly an ethics plan that complies with federal law, including an explicit statement about Trump’s own plans to avoid potential conflicts of interest. It has so far not done so.
Experts on presidential transitions say lawmakers did not appear to have anticipated that a presidential candidate would decline millions of dollars from the federal government or refuse to post an ethics code.
In theory, the IRS could audit the Trump transition and ask it to provide information on its contributors, but even if it did, the agency would not make those names public.
Brian Galle, a Georgetown University law professor who studies nonprofits, said he was skeptical the IRS would conduct an audit.
“Given the political sensitivity of this organization,” Galle said, “I’d say the odds of their being audited are zero.”
This article originally appeared in The New York Times.