Despite his claims to the contrary, then-President Donald Trump lost the 2020 election — but his campaign lawyer Sidney Powell apparently did very well for herself. We recently learned Powell raised over $14 million for her Defending the Republic nonprofit group using baseless claims about “fraud” in that election.
It’s unclear where all that money went. Federal prosecutors have subpoenaed the financial records of Defending the Republic and a related political action committee, also organized by Powell.
Spreading fake news to ask for money is commercial speech, and courts enforce laws criminalizing fraud.
Let’s be clear about something: Spreading fake news alone may be protected speech under the First Amendment. But spreading fake news to ask for money is commercial speech, and courts enforce laws criminalizing fraud. While Powell may argue that she believed her claims, there is no First Amendment right to lie to people to get their money.
Trump himself has shown the profitability of this model. A minor agitator suspended by Twitter for repeatedly lying might start a GoFundMe account and complain to sympathetic donors about being “canceled” by Big Tech. A former president, however, can open a Super PAC and rake in millions claiming to be a victim of both “election fraud” and “cancel culture.” And Trump has done just that, to the tune of $255.4 million raised in the eight weeks during which he sought to overturn the election result.
Since the 2020 election, I have received dozens of email solicitations from Trump or someone writing on his behalf asking for money. Most of these fundraising pitches come with either false statements of fact about the 2020 election or about President Joe Biden or some other Democrat — or both.
Lies that people get away with in politics can result in indictments in the charitable fundraising world. Former White House adviser Steve Bannon was indicted in August 2020 for the “Build the Wall” charitable scam he orchestrated, allegedly using the money he hustled in the name of supporting Trump’s border wall for his own purposes. Trump pardoned Bannon before he could be tried for this alleged fraud.
Understandably, prosecutors and courts accept the fact that First Amendment protection gives somewhat more leeway for untruths in political speech, even when accompanied by campaign fundraising, than is allowed when raising money for a business transaction or an erstwhile charitable endeavor like Bannon’s. In a public sale of securities to investors, for example, it is illegal not only to lie, but also to fail to disclose something that needs to be disclosed for what you have already said not to be misleading. If we applied that standard to politicians in their fundraising pitches, most of them would be in jail by now.
On the other hand, there must be limits to what politicians, political parties and “independent” organizations organized for political purposes permissibly can say to raise money.
Telling someone that Trump won the 2020 election, or that there was enough “election fraud” to flip the results, were false statements, and Powell almost certainly knew as much.
For example, in 2018, I lost a primary election against Minnesota Sen. Tina Smith. If after losing the primary I had sent out emails, tweets and mailers telling people that I had won the primary and that they should send me money to run in the general election, that would have been a fraud. A candidate can — and should — go to jail for that.
But what about a candidate who loses an election by a wide margin, ought to know he has no possible legal way of changing the election result, but still solicits money from the public to pay lawyers to file frivolous lawsuits challenging the election? That presumably is a fraud too, unless the people who send their money are told that there is little or no chance that the lawsuits will succeed or that the election results will change. As we know, that has not been the case with Trump’s missives.
Granted, there are close elections in which both candidates would be within their rights to hire lawyers and raise money to pay for litigation. Millions were raised and spent before the Supreme Court ruled in Bush v. Gore in 2000. John F. Kennedy’s win over Richard Nixon in 1960 was not so close, but that election was close enough — 49.72 percent versus 49.55 percent of the popular vote — that Nixon could credibly have raised more money and gone to court with some chance of success (though not much) to try to prove election fraud in Illinois.
The fact that Nixon — who later became the second most dishonest president in American history — did not stoop to that level says something about the relative standing of truth in American politics then and now. The 2020 presidential election wasn’t a landslide like we saw in 1964 for Lyndon Johnson or Ronald Reagan’s back-to-back sweeps. But Biden’s margin of victory — 51.3 percent to 46.8 percent in the popular vote and 306 to 232 in the Electoral College — was far larger than in many recent presidential elections. Short of sedition, insurrection and a military coup, the result was not going to change. Raising money for the purpose of changing the election result was fraud. Back to Powell. She is a lawyer, which means that she is subject not only to criminal prohibitions on fraud, but also to state bar ethics rules, which largely mirror that of the American Bar Association. The American Bar Association Rule 4.1 clearly states that “In the course of representing a client a lawyer shall not knowingly: … make a false statement of material fact or law to a third person.” Telling someone that Trump won the 2020 election, or that there was enough “election fraud” to flip the results, were false statements, and Powell almost certainly knew as much. The fact that she raised millions making such false statements makes it that much worse — and we still don’t know what happened with the money. Freedom of speech is critical to a representative democracy, and sometimes this means that we must tolerate politicians and their supporters who lie. But there are legal limits to lying, even in politics. Lying about nonexistent election fraud to a turbulent crowd ahead of their storming the Capitol and threatening to kill the vice president is incitement of insurrection, which can be criminal. Likewise, lying about demonstrable facts concerning an election that is already over to get people to send you money which cannot possibly be used to change the election result should be prosecuted as fraud. After the 2020 election, the Trump political operation turned from its habitual distortion of facts for political purposes to outright fraud to raise money, some of which is unaccounted for. The Department of Justice and state attorneys general need to investigate and, if criminal fraud can in fact be shown, press charges against these political scam artists.
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. 
