How the Trump Campaign's Reckless Spending Blew Its Fundraising Advantage

When it comes to political fundraising, the media dutifully reports how much money brought in by political campaigns.    But there is a second part of the fundraising equation that is equally as important - how a campaign spends the money it raises.  I previously warned that Trump campaign appeared to have a high "burn rate," i.e. that campaign was spending money recklessly on things that would not marginally improve the President's re-election chances.   Today, the New York Times provides details on that phenomenon and that the Trump campaign, just two months out, is nearly broke:

Money was supposed to have been one of the great advantages of incumbency for President Trump, much as it was for President Barack Obama in 2012 and George W. Bush in 2004. After getting outspent in 2016, Mr. Trump filed for re-election on the day of his inauguration — earlier than any other modern president — betting that the head start would

Brad Parscale, Former Trump Campaign Chair

deliver him a decisive financial advantage this year.

It seemed to have worked. His rival, Joseph R. Biden Jr., was relatively broke when he emerged as the presumptive Democratic nominee this spring, and Mr. Trump and the Republican National Committee had a nearly $200 million cash advantage.  

Five months later, Mr. Trump’s financial supremacy has evaporated. Of the $1.1 billon his campaign and the party raised from the beginning of 2019 through July, more than $800 million has already been spent. Now some people inside the campaign are forecasting what was once unthinkable: a cash crunch with less than 60 days until the election, according to Republican officials briefed on the matter.

The article goes on to detail some of the Trump campaign's questionable spending:

Under Mr. Parscale, more than $350 million — almost half of the $800 million spent — went to fund-raising operations, as no expense was spared in finding new donors online. The campaign assembled a big and well-paid staff and housed the team at a cavernous, well-appointed office in the Virginia suburbs; outsize legal bills were treated as campaign costs; and more than $100 million was spent on a television advertising blitz before the party convention, the point when most of the electorate historically begins to pay close attention to the race.

Among the splashiest and perhaps most questionable purchases was a pair of Super Bowl ads the campaign reserved for $11 million, according to Advertising Analytics — more than it has spent on TV in some top battleground states. It was a vanity splurge that allowed Mr. Trump to match the billionaire Michael R. Bloomberg’s buy for the big game.

There was also a cascade of smaller choices that added up: The campaign hired a coterie of highly paid consultants (Mr. Trump’s former bodyguard and White House aide has been paid more than $500,000 by the R.N.C. since late 2017); spent $156,000 for planes to pull aerial banners in recent months; and paid nearly $110,000 to Yondr, a company that makes magnetic pouches used to store cellphones during fund-raisers so that donors could not secretly record Mr. Trump and leak his remarks.

Some people familiar with the budget noted that Mr. Parscale had a car and driver, an unusual expense for a campaign manager. Mr. Trump has told people gleefully that Mr. Stepien took a pay cut when the president gave him the job.

Critics of the campaign’s management say the lavish spending was ineffective: Mr. Trump enters the fall trailing in most national and swing state polls, and Mr. Biden has surpassed him as a fund-raising powerhouse, after posting a record-setting haul of nearly $365 million in August. The Trump campaign has not revealed its August fund-raising figure.

“If you spend $800 million and you’re 10 points behind, I think you’ve got to answer the question ‘What was the game plan?’” said Ed Rollins, a veteran Republican strategist who runs a small pro-Trump super PAC, and who accused Mr. Parscale of spending “like a drunken sailor.”

“I think a lot of money was spent when voters weren’t paying attention,” he added.

...

Mr. Trump, who once joked he could be the first candidate to make money running for president, has steered, along with the Republican Party, about $4 million into the Trump family businesses since 2019: hundreds of thousands of dollars to Mr. Trump’s club at Mar-a-Lago in Florida, lavish donor retreats at Trump hotels, office space in Trump Tower, and thousands of dollars at the steakhouse in Mr. Trump’s Washington, D.C., hotel.

Many of the specifics of Mr. Trump’s spending are opaque; since 2017, the campaign and the R.N.C. have routed $227 million through a single limited liability company linked to Trump campaign officials. That firm, American Made Media Consultants, has been used to place television and digital ads and was the subject of a recent Federal Election Commission complaint arguing it was used to disguise the final destination of spending, which has included paychecks to Lara Trump and Kimberly Guilfoyle, the partners of Mr. Trump’s two adult sons.

Millions more followed to firms tied to R.N.C. and Trump-linked officials, including more than $39 million to two firms, Parscale Strategy LLC and Giles-Parscale, controlled by Mr. Parscale since the beginning of 2017.

...

Mr. Trump, who once joked he could be the first candidate to make money running for president, has steered, along with the Republican Party, about $4 million into the Trump family businesses since 2019: hundreds of thousands of dollars to Mr. Trump’s club at Mar-a-Lago in Florida, lavish donor retreats at Trump hotels, office space in Trump Tower, and thousands of dollars at the steakhouse in Mr. Trump’s Washington, D.C., hotel.

Many of the specifics of Mr. Trump’s spending are opaque; since 2017, the campaign and the R.N.C. have routed $227 million through a single limited liability company linked to Trump campaign officials. That firm, American Made Media Consultants, has been used to place television and digital ads and was the subject of a recent Federal Election Commission complaint arguing it was used to disguise the final destination of spending, which has included paychecks to Lara Trump and Kimberly Guilfoyle, the partners of Mr. Trump’s two adult sons.

Millions more followed to firms tied to R.N.C. and Trump-linked officials, including more than $39 million to two firms, Parscale Strategy LLC and Giles-Parscale, controlled by Mr. Parscale since the beginning of 2017.

The article discusses that, as a result of the shortfall, the Trump campaign had to slash its television buys during the last two weeks of August.  During that period, which included both parties' conventions, the Biden campaign spent $35.9 million on television, compared to just $4.8 million for Trump.

The article follows news that the Trump campaign has pulled TV advertisements in Arizona and won't be back on the air again in that state until early October.  Trump won Arizona by 3.5 points in 2016, but, according to polls, is currently trailing in that state to Biden by more than 4 points..  

OOP's short takes:

• On perhaps a related note, we are still waiting for the Trump campaign's August fundraising numbers.  The Biden campaign has already announced that it had a record haul that month - $365 million.  Usually the campaign fundraising numbers are released very early in the month so it is not clear what is causing the delay.
• Two months before the election, and the Federal Election Commission remains powerless to enforce federal election law.  Why?  President Trump has not filled vacancies on the FEC that would allow it to have the necessary quorum to take enforcement action. Don't for a second think that is an accident. 
• If you thought Trump had no motivation for saying that members of the military services are "suckers" for putting their lives at risk for their country, Trump yesterday supplied that motive.  During a press conference, Trump said that America's military leaders are putting soldiers in harm's way to make more money for arms manufacturers.  The problem with that position is that high ranking military officers are required to disclose their assets and are prohibited to have any ownership in arms manufacturers or in any way profit from those companies.  On the other hand, the politicians whose decisions influence military engagements, have no such restrictions.