It seems as if it should be easy for Donald Trump to sell a t-shirt that says “TRUMP” on it at the Trump Store in the lobby of Manhattan’s Trump Tower. And from the perspective of the buyer, it is: You walk up to the counter of the store and talk to one of the young women staffing it, give her $15, and in short order, you’ve got a t-shirt.
From the perspective of a campaign finance lawyer, it is not so simple.
We’ve explored the cumbersome new world in which Trump operates before, looking at the extent to which Trump-the-company can keep advertising Trump-company products and destinations while Trump-the-candidate is advertising his candidacy.
We get a different look at how unusual the unusual candidate’s new world really is, though, once we dive down to the level of those t-shirts.
Or, better: The trucker hats. When Trump uncharacteristically covered his orange mop with a “MAKE AMERICA GREAT AGAIN”-emblazoned ballcap during his visit to Laredo, Tex., the headgear instantly became famous. At the Trump Store in the Trump Tower lobby where the gear is sold, they went like hotcakes. “I’ll break your heart right now, we don’t have the hats,” one of the salespeople told me when I asked about them Monday. You sold out? “In two hours,” she replied.
The question I was there to answer, though, was: How? How can a store, even a store owned by the candidate, sell campaign merchandise for a presidential campaign? Where does the money go? How are donors tracked?
The manager of the store answered my questions as best she could. All the money from the sales went to the campaign, she said, so they were sold tax-free. The shirts and hats were only available at the Trump Tower Trump Store; you couldn’t even buy them at campaign events. (The Post’s Dave Weigel, who reported on Trump’s Iowa visit over the weekend, confirmed this.) They didn’t collect information from buyers, and sold whatever merchandise the campaign sent them. The section of the counter that offered the shirts and hats was reserved “solely just for the campaign,” she said.
Some attorney somewhere probably suggested that she add that last part. Larry Noble of the Campaign Legal Center, reached by phone, explained that a store selling presidential gear — any store, not just one owned by the candidate — can only do so within certain constraints.
“When you sell something through a store, there’s a normal business process you go through,” he said. Some stores sell on consignment, or buy products in advance, and so on. “A campaign has to do its dealings in the ordinary course of business. If he were trying to sell campaign material through Walmart, Walmart would have to charge him what they’d normally charge or pay him what they’d normally pay.” Walmart pays staff and has electrical bills and so on; the campaign needs to cover the cost of those things as applied to selling campaign gear.
The trick that arises is that none of that cost can come from the price of the item. As Noble notes — and as the store manager pointed out — all $15 a shopper pays for a Trump shirt or $20 for a hat counts as a contribution from that shopper to Trump 2016. But that means that none of the money can go to pay overhead. So Trump’s campaign needs to pay the Trump Store — just as it would Walmart — for the cost of the staff and electricity separately. If the store (or Walmart) doesn’t charge the campaign for those costs, it counts as a corporate campaign contribution, and demands its own book-keeping.
By telling me that only a certain part of the counter was reserved for campaign merchandise, the manager implied that there is a set percentage of Trump-the-store’s costs that can be set aside to be paid by Trump-the-campaign.
That is by no means the end of the legal trickery. Since every sale is a campaign contribution, it means that the store should be tracking who’s buying and how much they’re spending. A campaign can accept cash donations less than $100 and doesn’t have to itemize individual contributions under $200, Noble explained. This means that if the Trump Store sells 11 hats to one person, the store should be collecting information on the person’s name, employer and occupation to be reported to the Federal Election Commission.
What’s more, any tourist stopping by Trump Tower from his or her home in Europe or Asia or Australia cannot buy a hat or shirt, because foreign nationals are not permitted to donate to political campaigns. (When I was at Trump Tower to ask people if they’d read Trump’s book, a number of visitors told me they were from foreign countries.) Imagine buying a trucker hat that says “Make America Great Again” to give to your kid back in Oslo and learning that you just broke the law.
Would it be easier, then, for Trump just to sell Trump campaign gear and pocket the profit? After all, some of that money clearly ends up back in his well-stuffed bank accounts, and he can loan himself as much money as he wants. So why not?
Or, put another way: What if there were a jeweler who decided to run for office and started selling $10,000 gold necklaces at his store. Wouldn’t that be an easy way to vacuum up money from suddenly jewelry-obsessed donors that could then be loaned back out to the political effort?
In that case, the jeweler would be limited by the fact that he can only loan himself money from what he normally earns. A big jump in sales at the store is good for the store, but it can’t loan money to the candidate’s effort. A candidate also can’t just unilaterally increase his income by 200 percent to make bigger loans. Or, he can, but the FEC will likely take notice. (Eventually.) (Probably.)
In this case, Trump couldn’t simply shift the sales from the hats into his account and out to his campaign. But we’re really talking about pennies on the dollars he’s already loaning himself. The manager of the Trump Store couldn’t tell me how many hats they’d sold in those brilliant two hours that they were available, but even if it were a thousand, that’s only $20,000 — compared to the $1.8 million Trump loaned himself in the second quarter. Hardly even worth it.
As of Monday afternoon, if you’re a Russian secret agent hoping to undermine the American system by funneling secret cash to presidential candidates, the easiest (if slowest) place to achieve that is in the lobby of Trump Tower — 725 5th Avenue, Manhattan.
And if you’re a campaign finance hawk looking to catch a presidential campaign tripping over nuanced legal boundaries, keep your eye on Trump’s third quarter campaign filing. If it doesn’t say that the campaign paid for approximately one-10th of a counter at something called “Trump Store,” you’ve bagged yourself a winner.