Trump 2020 Campaign Ad Payments Hidden by Layers of Shell Companies

The Trump 2020 campaign funneled money to a shell company tied to ad buyers at the center of an alleged illegal coordination scheme with the National Rifle Association (NRA) as recently as May 2019, according to new government records analyzed by OpenSecrets. The previously unreported ad buys for Trump’s re-election campaign routed through a secretive limited-liability company known as Harris Sikes Media LLC were revealed in Federal Communications Commission (FCC) records in OpenSecrets’ political ad database. The Trump campaign stopped reporting payments to ad buyers at American Media & Advocacy Group following allegations that the company facilitated illegal coordination between the campaign and the NRA through American Media’s affiliates National Media Research, Planning & Placement and Red Eagle Media Group. The companies share a storefront and employ many of the same individual ad buyers. Trump’s 2020 campaign quietly continued to funnel money to the same individuals through payments Harris Sikes Media. With no public-facing facade and no individual ad buyers listed on FCC records other than those who also authorized ads for through National Media affiliates, Harris Sikes Media appears to operate as a shell company.

A representative of National Media confirmed to OpenSecrets that Harris Sikes is affiliated with the firm, describing it as a “firewall entity” used as a way to distance teams of buyers from campaigns so there is no conflict. In multiple instances, the Trump campaign and NRA made ad buys at the same local radio station within days of each other in FCC filings that list the same individual ad buyers at different National Media affiliates, including Harris Sikes Media. Shared vendors are one of the factors the Federal Election Commission (FEC) considers when determining if communications may constitute illegal coordination between a campaign and outside group supporting it. Despite multiple FCC records of political ad buys through Harris Sikes totaling tens of thousands of dollars throughout 2018 and as recently as May 2019, the Trump campaign has not reported any transactions with the firm to the FEC since June 2017. But National Media chief finance officer Jon Ferrell signed records of ad buys submitted under the guise of Harris Sikes Media to the FCC under the penalty of perjury as “agent of Donald Trump for President, Inc.” Other media buyers authorizing campaign ads under the guise of Harris Sikes Media also continue to be listed on FCC records for outside groups supporting Trump.

Payments for ad buys from May 2019 are not required to be disclosed to the FEC until the Trump campaign’s next quarterly report is due on July 15. However, a financial arrangement set up by Trump’s 2020 campaign may mean the payments revealed in FCC records reviewed by OpenSecrets won’t be reported to the FEC at all. In the two years since the last reported disbursements to Harris Sikes Media, Trump’s campaign has reported significant payments to another obscure firm called American Made Media Consultants, a Delaware incorporated limited-liability company set up by Trump campaign manager Brad Parscale and controlled by Trump campaign officials. Trump campaign representatives said AMMC was created to act as a clearinghouse for media spending that would otherwise be done by outside vendors who typically take commissions on media or ad buys. The Washington Examiner reported that the group was created after a push from Parscale for more “transparency” over the Trump campaign’s ad buys, in part as an attempt to subdue media controversy over Parscale’s firm being paid to handle the campaign’s media buying.

Parscale says he has no financial stake in AMMC and the Trump campaign has claimed no one working on the campaign benefits financially from AMMC. Several top Trump campaign officials — including Parscale, who pushed for AMMC’s creation — have been paid salaries through Parscale Strategies, which is also a Trump campaign vendor.

AMMC reportedly has an independent managing board, but the lack of transparency around how the entity is run and structured makes its composition difficult to determine from the outside looking in. The model of presidential campaigns using in-house media buyers was pioneered by Mitt Romney’s 2012 campaign, which deployed a similar arrangement buying ads under the umbrella media firm dubbed American Rambler that was run by top campaign aides. Taken to the next level going into the 2020 election, this structure has enabled the Trump campaign to avoid disclosing precise details about its spending, allowing it to report millions of dollars in disbursements to AMMC without every disclosing the identities of any underlying sub-vendors to the FEC. Campaign finance regulations are silent on the concepts of disclosing sub-vendors in this context but the FEC has issued some guidance on the issue. FEC advisory opinions dating back to 1983 indicate that a campaign may report disbursements to vendors hired for media services without reporting that vendor’s payments to sub-vendors. In the opinions, the FEC advised that services actually provided vendors or sub-vendors must match the purpose of disbursements disclosed by the campaign, even if the sub-vendor is not disclosed.

There are some circumstances where a committee could violate their reporting obligations if they are intentionally trying to obfuscate the recipient. For example, the FEC found in 2002 that one campaign violated disclosure requirements by contracting directly with a vendor but reporting payments to a firm that served merely as a “conduit for payment” in an attempt “to conceal” the true vendor due to stigma associated with that vendor’s ties to onetime Ku Klux Klan Grand Wizard David Duke. In the wake of a federal court case touching on some of these issues earlier in 2019, campaign finance experts have drawn a distinction between “creating a false trail to hide the purpose of the documents versus using an umbrella vendor and having an umbrella vendor doing specific things that should be individually reported but aren’t.” Trump’s campaign has reported recent payments to AMMC for purposes such as “media placement,” which echo the details of earlier disbursements to Harris Sikes Media. But the lack of transparency around the campaign’s payments makes it nearly impossible for the public to determine whether the campaign is paying Harris Sikes Media through AMMC or if they have deployed some other payment structure entirely. The Trump campaign and representatives of the firms had not responded to request for comment on the issue at the time of publication. Many ads by the NRA and America First Policies purchased through National Media affiliates during the 2020 election cycle focus on issue advocacy rather than electioneering, meaning they are not subject to the same rules barring coordination as ads that use the terms “vote for” or “vote against.” However, Trump is often still prominently featured with some FCC disclosures even listing the issue in the ad as “pro-Trump,” increasingly blurring the line between ads supporting Trump’s agenda and his campaign as the 2020 election nears.