Former President Donald Trump never expected to win the presidency in 2016, but he did expect to make a bigger national name for himself. He might have planned to attract an ever-larger following of disaffected Americans and translate this support into profits, perhaps from a new Trump television network that would compete with Fox News.
Like so many before him, Trump knows how to mesmerize people as he lightens their wallets.
To his surprise, he got the presidency instead.
That’s when he introduced a common American pastime to the White House: “affinity fraud.”
Americans should be very familiar with the phenomenon, whereby dishonest economic actors take advantage of a shared group identity to deceive others in their same group. Affinity frauds take advantage of the flip side of negative stereotyping — the fact that decision-makers do not question the honesty of people inside their own group as much as they question those on the outside.
In other words, tailor-made for Trump.
On Saturday, a New York Times report of the former president’s deceptive campaign donation strategy surfaced, in which the campaign roped supporters into unwittingly agreeing to monthly, and in some cases weekly, donations to support his presidential bid.
I will not delve here into the legality of deceptive tactics used by some merchants once they get a person’s credit card number. The countless consumers who get inundated with monthly deliveries of unwanted merchandise and services know what I’m talking about, as do federal and state regulators.
Legal or not, one would have hoped presidents would be above such things. But Trump hammered home the lesson that not all commercial speech is free speech. It’s certainly not free for the person stuck with the credit card bill.
Decades before Madoff, it was financiers on Wall Street who trusted each other in the banking and securities industries — until the system collapsed in the early 1930s.
Over the past 100 years, we’ve seen forms of affinity fraud over and over again.
In 2002, I was an expert witness in civil litigation over the Baptist Foundation of Arizona, which sold “church bonds” to devout Baptists, used the proceeds for speculative real estate deals and then went bankrupt. Some evangelical leaders engage in affinity fraud today, and some perpetrators get sent to prison. Affinity fraud has also surfaced in the Mormon community in Utah. Bernie Madoff deceived predominantly Jewish investors, some of them very sophisticated investors.
Decades before Madoff, it was financiers on Wall Street who trusted each other in the banking and securities industries — until the system collapsed in the early 1930s. Some of them, including Richard Whitney, president of the New York Stock Exchange, stole money from their clients and from wealthy institutions. Whitney was jailed for three years after embezzling from his customers and from the Harvard Club of New York, the New York Yacht Club, the St. Paul’s School endowment and the New York Stock Exchange pension fund.
Like so many before him, Trump knows how to mesmerize people as he lightens their wallets. For decades, he was the champion of brash new money, someone who played by his own rules against the establishment.
He sold hundreds of millions of dollars of casino bonds backed up by his promise to build one of the glitziest casinos in Atlantic City. The company Trump used to issue the bonds went bankrupt; the bondholders lost their money, but Trump did just fine.
People were desperate to make money in real estate so they could be like their idol Donald Trump — so desperate that many poured thousands of dollars into tuition for worthless classes from Trump University.
For Trump, the presidency was a business like any other: a means to enrich himself personally; a business to drain of cash.
Then came the 2016 presidential campaign. Trump shifted his focus to the right wing of the Republican Party and to disengaged and disillusioned voters who needed someone to appeal to their masculinity, (white) racial identity and anger at immigrants who they believed robbed them of jobs. Campaign fundraising soared, with traditional GOP corporate donors being supplemented and increasingly supplanted by this new group of individual donors who sent money every time they received an email or tweet from their leader.
During the Trump presidency, the fundraising juggernaut continued. And Trump continued to make more money for his businesses, whether from foreign government emoluments or from Secret Service spending at his resorts and other domestic emoluments, using the presidency to promote his golf courses and more. For Trump, the presidency was a business like any other: a means to enrich himself personally; a business to drain of cash, and then, like so many of his other ventures, leave in far worse condition than when he had found it. The presidential campaign — and after the election, Trump’s effort to reverse the results in the courts — became another cash cow. Online donors, attracted by attacks on liberals and appeals for help from “your president,” easily overlooked the pre-checked box on the donation page that made a single donation turn into a monthly contribution. Credit card companies struggled to keep up with processing the donations as middle-class Americans’ bank accounts were emptied far faster than the so-called swamp Trump had promised to drain in Washington. Then the conspiracy theorists joined the fray. As we saw on Jan. 6, some of the people Trump attracted through affinity fraud not only were conspiratorial — believing Trump’s false claims about election fraud — but also violent. They attacked the Capitol and a police officer died. But Trump was still raking in the cash. He had managed to turn his November election loss into a giant fundraising scheme, sending mass emails, tweets and other social media communications to solicit money for his effort to “defend” the election. The entire story was a scam, and the scam turned deadly. For this, Trump was impeached by the House a second time but acquitted by a Senate where Republicans were so cowed by Trump’s supporters that they objected strenuously to even hearing witnesses. Trump is under investigation in multiple jurisdictions including New York, Georgia and the District of Columbia. We do not know what the future holds for him. But many Americans have succumbed to Trump’s affinity fraud, giving him their hard-earned money they could have used for more useful things. The real kicker is that many will not admit they were defrauded. They will continue to believe in Trump, just as he will continue to tell them that he won the 2020 election. And, if they just send more money, he promises he will come back in 2024 and win another.
Richard W. Painter
Richard W. Painter was the chief White House ethics lawyer from 2005 to 2007 under President George W. Bush. He is the S. Walter Richey Professor of Corporate Law at the University of Minnesota and is a graduate of Harvard College and Yale Law School. 
