Former President Trump could face a surprising problem as he mounts his 2024 campaign: a cash crunch as wealthy megadonors gravitate toward Florida Gov. Ron DeSantis (R) and other potential contenders. 

A loyal army of small-dollar donors will power Trump’s presidential bid, potentially making up for the exodus of billionaire backers, but they’ve shown signs of scaling back their giving. 

And while Trump’s political machine is starting off with a war chest of more than $110 million, federal law prevents him from using most of that money to advance his White House campaign.

Meanwhile, Trump’s political committees are shelling out huge sums on his legal defense, totals that only seem likely to rise after the Department of Justice on Friday appointed a special counsel to oversee probes into him.

GOP megadonors abandon Trump

Billionaire Republican donors are splitting from Trump after the far-below-expectations of last week’s midterm elections, dealing a serious blow to his fundraising prospects. 

Hedge fund manager Ken Griffin, the second-most prolific GOP donor of the midterms, said Tuesday that he would support DeSantis over Trump, pointing to the Florida governor’s dominant reelection victory in a state that was considered competitive until recently.  

“I’d like to think that the Republican Party is ready to move on from somebody who has been for this party a three-time loser,” Griffin said at Bloomberg’s New Economy Forum in Singapore, referring to the last three election cycles.

Griffin, who bankrolled a pro-Trump super PAC in previous cycles, gave $5 million to a political committee aligned with DeSantis last year.

Stephen Schwarzman, CEO of private equity giant Blackstone and a top Republican donor, announced Wednesday that he would support a challenger to Trump in 2024. 

“America does better when its leaders are rooted in today and tomorrow, not today and yesterday,” Schwarzman said in a statement. “It is time for the Republican Party to turn to a new generation of leaders and I intend to support one of them in the presidential primaries.” 

Robert and Rebekah Mercer, the top donors to Trump’s 2016 campaign, are also done backing the former president, CNBC reported on Friday.

Several prominent Republicans who supported Trump’s 2020 reelection bid — including South Dakota Gov. Kristi Noem, former Vice President Mike Pence and other possible 2024 challengers — have made similar statements calling for new leadership after a disastrous midterm election for Trump-endorsed candidates.

“We were told we’d get tired of winning. But I’m tired of losing,” former Trump administration Secretary of State Mike Pompeo, another potential 2024 hopeful, tweeted on Friday. “And so are most Republicans.”

Trump will at least be able to tap his enormous list of online, small-dollar donors who powered his near-record $774 million fundraising haul in 2020. 

But after bringing in big money in 2021, the Trump operation’s fundraising slowed in the first half of this year, forcing it to spend more on texts, emails, online ads and other appeals to donors. Trump-affiliated committees spent more than they raised in the third quarter of 2022. 

Trump, who is a billionaire himself, spent $66 million of his own money on his 2016 presidential campaign. But he opted not to self-fund his 2020 reelection run. 

The Hill has reached out to the Trump campaign for comment.

Following his official 2024 announcement, the Trump campaign will also now be on the hook for millions of dollars in legal fees that were being paid by the Republican National Committee. 

“We cannot pay legal bills for any candidate that’s announced,” RNC Chairwoman Ronna McDaniel told CNN’s Dana Bash, noting that the committee can’t make in-kind contributions to a declared candidate. 

Trump restricted from using war chest  

Political committees controlled by or closely affiliated with Trump have a total of nearly $112 million in the bank, according to an analysis of the most recent Federal Election Commission (FEC) filings by nonpartisan research group OpenSecrets.

That would appear to give Trump a substantial headstart over his GOP primary opponents. But only $13.5 million of that total can legally be used to bolster Trump’s 2024 aspirations.

That’s because most of the money was raised by a leadership PAC and other committees that are not officially part of Trump’s presidential campaign. Federal law prohibits candidates from double-dipping into donor funds this way, thus bypassing candidate contribution limits and transparency rules. 

In an effort to dodge those restrictions, Trump’s leadership PAC last month transferred $20 million to a super PAC called MAGA, Inc. The group is run by Trump aides, even though super PACs are supposed to be independent of candidates. 

The nonpartisan Campaign Legal Center filed a complaint before the FEC this week alleging that the transfer violated federal law prohibiting candidates and their committees from transferring funds to “soft money” entities such as super PACs that can raise and spend unlimited funds. 

Saurav Ghosh, director of federal campaign finance reform at the Campaign Legal Center, said that the Trump campaign strategy is a “very clear violation” of federal law, but it’s still unclear whether the FEC will act in a timely manner, or at all, to prevent wrongdoing.

The commission, which is divided equally along partisan lines, has rarely slapped penalties on campaign committees in recent years. Republican commissioners have dismissed every complaint against Trump, despite two-dozen instances of the FEC’s nonpartisan lawyers recommending an investigation. 

“The FEC’s track record of enforcing soft money violations is pretty poor,” Ghosh said. “And you pair that with the fact that they have an equally bad, if not worse, track record of enforcing really any campaign finance laws against Donald Trump.”

If Trump is successful in evading campaign finance laws, he could encourage DeSantis to do the same.

The Florida governor hasn’t said that he will run for president, but he broke state-level fundraising records in his 2022 gubernatorial contest and spent only a fraction of the total. DeSantis ended the race with around $90 million in the bank between his campaign committee and affiliated PAC. 

“If he were to try a similar maneuver as Trump and simply transfer all of that money over to a super PAC that’s geared towards supporting his candidacy, there’s no question that that would be another, even more clear-cut soft money violation,” Ghosh said.