President-elect Donald Trump's transition will be funded entirely by private donors. His unprecedented move to reject federal funds typically allocated to presidential transitions allows him to shield the identity of donors. We explore why this matters in a video collaboration between Politico and Business Insider.
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00:00The transfer of presidential power in the U.S. can cost tens of millions of dollars,
00:08between office space, security briefings, and background checks for new staff.
00:14Incoming presidents have had to rely on both federal funds and private donors to foot the
00:19giant bill.
00:21But Donald Trump is the first leader in U.S. history to decline federal funds for his transition.
00:28He has several very wealthy donors that have more than enough money to pay for the things
00:33that their transition needs.
00:34He's also refusing to sign government forms that would require him to disclose how much
00:40his donors gave.
00:42No one is able to look at those donations and see, is this person getting a role in
00:47the administration?
00:48There's any number of things that they could influence Trump on.
00:52So what are the costs associated with a presidential transition?
00:57And how could this one change future transfers of power?
01:03The new occupant of the White House and his predecessor meet in a unique joint session.
01:08It's the culmination of one of the best-managed transitions between administrations in the
01:12nation's history.
01:14Presidential transitions have always been complicated.
01:17And for almost 200 years, there weren't any laws governing them.
01:22Kaitlin Oprisco covers money in politics for Politico.
01:26Up until about the 1960s, presidential transitions were entirely privately funded.
01:32John F. Kennedy defeated GOP standard-bearer Richard Nixon in one of the closest presidential
01:37elections on record.
01:38The incoming president's political party would usually foot the bill for those expenses.
01:45For example, in 1960, John F. Kennedy's transition was partly funded by the Democratic
01:51National Committee, or DNC.
01:55That was standard practice at the time.
01:58But in 1963, Congress decided to streamline the process and came up with the Presidential
02:05Transition Act.
02:06That allowed presidents-elect to access federal funding and federal resources for their transitions,
02:13obviously with the caveat that, you know, when you bring in those federal funds, you
02:17have a limit on them and you have to disclose them.
02:21By law, every election year, the sitting president needs to propose a budget for the
02:26transition.
02:27Congress then has to approve it, earmark that money, and hand it over to the General
02:32Services Administration, or GSA.
02:35The General Services Administration is the government agency that supports the basic
02:40functions of government, and it also oversees the presidential transition.
02:44It's an independent body, which means it isn't connected to either political side,
02:50and keeps track of all the transition funds, spending them on things like phones and computers,
02:57and making sure they're secure so no one can steal data, which could compromise national
03:02security.
03:03The agency pays expenses for the outgoing administration during the transition process.
03:09It also provides office space in one of roughly 8,000 government buildings, and furnishes
03:15it.
03:16And President Harry Truman, who created the GSA back in 1949, made its first task renovating
03:23the White House after a piano fell through the floor.
03:27Reconstruction was undertaken because architects called the building unsafe.
03:31But since then, critics have accused the agency of wasteful spending, like when it allegedly
03:37used over $800,000 to send government staff to Las Vegas during the Obama administration.
03:44The GSA even has a fleet of over 200,000 cars it vets for safety.
03:50It leases them out for new and existing staff.
03:53It trains incoming staff, too, which is an important part of every transition, especially
03:59if they've never worked in government.
04:01When the president-elect nominates people for the cabinet, the GSA is normally the agency
04:06that will conduct the background checks on that.
04:09All that federal support comes with terms and conditions that candidates have to agree
04:15to when they sign the GSA documents, usually before the election even happens.
04:21If you sign the GSA paperwork to accept federal funding and federal help, the GSA caps private
04:29donations at $5,000 per donor.
04:32Donors don't just have to be a person, they could be a company or another organization.
04:37It does also prohibit donations from foreign nationals.
04:41Beyond that, incoming administrations can add even more voluntary restrictions, like
04:47the Biden transition did not accept donations from fossil fuel companies, lobbyists, registered
04:54foreign agents.
04:56Every president since the enactment of the Presidential Transition Act has signed the
05:01GSA documents, which also allows transition teams to use donor funds if the federal money
05:07runs out.
05:09Because it usually does.
05:10In 2000, the Clinton-Bush transition got $5.3 million from the federal government and raised
05:17another $3 million to supplement it.
05:20The Bush-to-Obama transition got $8.5 million in 2008 and raised $6.7 million to pay for
05:27the rest.
05:29In 2016, Trump signed the GSA documents too, so his transition got $9.9 million from the
05:37federal government.
05:38But the donations he disclosed that year, as part of the GSA's terms, raised some eyebrows.
05:44Trump's first transition in 2016 and 2017 raised $6.5 million from private donors.
05:51Some of that spending, it sparked some accusations that Trump was using that money to line his
05:57own pockets because his transition disclosed spending hundreds of thousands of dollars
06:02on rent payments when a lot of the transition was based in Trump Tower in New York City,
06:08which is a building that Trump owns and gets profits on.
06:12Another point of concern was what his donors were getting in return.
06:17Several of the donors to Trump's first transition were later named to his cabinet.
06:23That includes Betsy DeVos, who is the education secretary.
06:26Betsy DeVos' family sent 10 individual checks, each for $5,000, the GSA's cap.
06:34Steve Mnuchin's family sent money too.
06:36His brother donated to the transition and Steve Mnuchin was named treasury secretary.
06:42Only one of the donors to Biden's transition in 2020 was given a cabinet seat, Dr. Irati
06:48Pragbhakar, the director of the Office of Science and Technology Policy, who sent $500.
06:55But despite concerns, the government hasn't raised the federal transition budget enough
07:01to help reduce the need for private donations.
07:04In fact, they've only become more important.
07:07In 2020, Biden got $9.9 million in federal funds for his transition.
07:13That may seem like a lot, but GSA disclosures show it spent $1 million just training incoming
07:21staff and briefing them.
07:23It spent another $6 million issuing its contracts, a quarter million on office space and furniture,
07:31and another roughly $15,000 on office supplies.
07:35All that is pretty standard.
07:37The money adds up fast, especially that year.
07:40They were in the middle of a pandemic.
07:42They had a lot of health concerns that they wanted to be wary of, and so that needed extra
07:48money.
07:50At the time, the GSA couldn't offer support until it certified a winner, which happened
07:55on November 23rd.
07:57Meaning that the Biden transition wasn't able to access federal resources, including
08:02intelligence briefings or just office space.
08:06The delay meant the Biden team ended up raising $22 million in private donations, so it could
08:12start working.
08:15To prepare for 2024, Congress updated the Presidential Transition Act to make sure both
08:21candidates could access funding quickly if an election took longer to call.
08:27It allocated $10.4 million in federal money to this year's transition.
08:32To access those funds, both candidates were asked to submit an ethics plan by October
08:381st, saying how they would handle conflicts of interest.
08:42The agency needs time to review it, so it's ready to release funding and resources to
08:48either team should they win.
08:50Kamala Harris' team did that, but Trump's did not, which sparked some questions about
08:55whether he would.
08:57He missed the deadline, but turned it in in November, writing that his team wouldn't
09:02accept money from foreign agents or lobbyists.
09:05But in a statement, his team also said that it would not take federal funds to save taxpayer
09:11dollars, or sign the GSA documents.
09:15Trump has several very wealthy people in his inner circle, including Elon Musk, the Tesla
09:21CEO, and Howard Lutnick, the transition co-chair and Cantor Fitzgerald CEO.
09:29We must elect Donald J. Trump president.
09:35And even if Trump were to not receive any federal funding for his transition, those
09:40two men, or any of the other very wealthy donors that he surrounds himself with, have
09:45more than enough money to kind of pick up that slack.
09:49It obviously raises the ethical question of whether that would buy them outsized influence
09:54in a Trump administration.
09:56They could have more influence over cabinet picks or other appointees in the administration,
10:02policy changes or policy priorities.
10:05In a statement on November 26th, Trump's team said it would eventually disclose its
10:10list of donors for 2024.
10:13But without a signature on the GSA documents, the $5,000 cap goes out the window.
10:19He also doesn't have to say how much each donor gave.
10:23No one is able to look at those donations and see, you know, is this person getting
10:28a role in the administration?
10:31The incoming president has already named wealthy donors to his campaign, like Howard Lettnick
10:36to his cabinet.
10:37As well as Linda McMahon, who gave more than $21 million to Trump's re-election bid.
10:44And Scott Besant, who donated over $600,000.
10:49Trump also promised billionaire Elon Musk a seat in his administration.
10:54This will truly be the golden age of America.
10:58That's what we have to hope for.
10:59We don't know yet whether the Tesla CEO is donating to Trump's transition fund.
11:05But the money someone like Musk could bring to the table, and the fact that we may never
11:10know just how much he did, could change the game for every future transfer of power.
11:16One thing that could come out of this is you could see government watchdog groups and transparency
11:22advocates pushing for greater disclosure into transition funding and spending, regardless
11:28of whether the candidate signs the GSA memorandum.