Donald Trump’s campaign debt is revealed by FEC filings

For a wealthy man, Donald Trump is uncannily familiar with bankruptcy court. Oh, but never for himself, he will hurry to explain. These are companies that he “put in a chapter” – presumably Chapter 11— and the days when he “used the laws of the land” to cut deals with creditors and avoid financial ruin. Trump has filed for bankruptcy protection for some of his biggest investments, including the Trump Taj Mahal, trump castle, and Plaza Hotel.

Trump is heading in the same direction with his campaign. As of May 31, he had only $1.3 million in cash and a whopping $45.7 million in debt. Campaigns can’t really go broke, as they’re quite light on assets. But as the saying goes, campaigns don’t end, they run out of money. Trump has avoided that eventuality for now by taking on a heavy loan load.

The billionaire immediately presented this as proof of his business acumen, proudly owning Hillary Clinton’s taunt that he’s “the king of debt“:

Trump owed far more to creditors in April than any other federal campaign committee, according to FEC records. While overall stats aren’t available for May yet, he’s probably still at least near the top of the list. No other major presidential campaign in the past eight years has saved so little or taken on so much debt. Hillary Clinton has over $30 million in the bank and only $600,000 in loans; Bernie Sanders, the one donating $27, has no debt and holds about $5 million in reserves.

Even Ted Cruz has more money than Trump: $6.8 million, nearly three times the billionaire’s campaign savings. Trump’s debt load is unprecedented in recent history, even overwhelming John McCain, whose money troubles in early 2008 threatened his offer.

Trump’s debt, however, comes with a caveat the size of the Taj Mahal. He owes almost everything to himself. Trump’s infusions funded the majority of his campaign’s $63 million in spending — it started with drips and drips in 2015 but recently accelerated to a torrent of cash. (That doesn’t mean he foots the entire bill, as he likes to say; outside contributors have donated $17 million.) About a tenth of that was reinvested in Trump’s own businesses, much of it going to airfare for his own famous jets. Sixteen years ago, Trump Told Forbes he could be “the first presidential candidate to run and make money”. That’s unlikely, unless you count the free exposure the Trump brand gets. It’s true, however, that based on the increase in price of their services relative to the actual cost of his businesses, he’s almost certainly getting a big discount on his run for president, assuming he can recoup his loans.

That could be a problem. Trump’s campaign debt may be a mirage for now, but it will soon become a crushing reality, and his lackluster fundraising will be the cause. Until he accepts the nomination at the Republican National Convention, Trump can use campaign funds to repay loans without limits, replenishing his personal bank account with contributions and proceeds from “Make America Great Again” hats. But this tap closes at the end of the convention. At this point, Trump has 20 days to use the money received before his nomination to repay the loans. If he gets new contributions to his primary campaign, he can only use up to $250,000 to repay himself. (A similar cap applies to any loans it might make during the general election, with the deadline being Nov. 8.)

This means that the billionaire has a deadline. If he has any hope of getting his own money back, his campaign needs to raise more than $40 million next month. That’s on top of the millions he needs a month to run for president. In May, Trump only raised $3 million. The momentum is not on his side.

Yes, the Republican National Committee will definitely help the campaign. And Trump has already said he won’t try to recoup his loans. Then again, he wasn’t going to accept outside donations either; Tuesday saw the launch of its first fundraising email. Read cynically, his offer to match every donation with a personal contribution might seem like a shrewd way to secure capital ready to repay his own investment, if he structures his contribution like another backed loan.

When Ross Perot ran for president in 1992, he helped about $65 million of his own money, over $100 million in today’s dollars. But these were real contributions. Perot only structured 7% of his expenses as loans. Trump’s decision to present his own wealth as campaign debt could be the decision of a shrewder businessman. But the billionaire should beware. He, more than anyone else, knows what it means to flirt with insolvency. If his campaign runs out of funds, he will have to worry about more than a few wealthy investors and casino creditors. From now on, it responds to new shareholders: American voters.