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EXCLUSIVE-Trump using campaign, RNC funds to pay legal bills from Russia probe-sources

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NEW YORK, Sept 19 (Reuters) - U.S. President Donald Trump is using money donated to his reelection campaign and the Republican National Committee to pay for his lawyers in the probe of alleged Russian interference in the U.S. election, according to two people familiar with the matter.

The U.S. Federal Election Commission allows the use of private campaign funds to pay legal bills arising from being a candidate or elected official.

While previous presidential campaigns have used these funds to pay for routine legal matters such as ballot access disputes and compliance requirements, Trump would be the first U.S. president in the modern campaign finance era to use such funds to cover the costs of responding to a criminal probe, said election law experts.

One person familiar with the matter said the first payments, the amount of which Reuters could not determine, has already been made and would be disclosed in public filings. The person did not explain how the costs would be allocated between the campaign and the RNC.

The Republican National Committee is expected to make its August spending public on Wednesday, and the Trump campaign is due for another disclosure on Oct. 15.

John Dowd, Trumps lead lawyer, declined to say how the president's legal bills were being paid, adding: "That's none of your business."

A spokesperson for the RNC declined to comment, but said the committee has already paid unspecified, non-Russia related litigation expenses for the campaign. The RNC has an existing legal defense fund which has been used mainly for Election Day recounts and other routine legal matters for candidates, the spokesperson said.

Special counsel Robert Mueller is looking at possible collusion between the Trump campaign and Russia in last year's election, and whether Trump may have obstructed justice by firing FBI Director James Comey, among other actions.

Moscow has denied meddling in the U.S. election, and Trump denies any collusion or obstruction.

Reuters could not determine how large a legal bill Trump has incurred to date from his lawyers on the Mueller probe. Trump hired his longtime New York lawyer Marc Kasowitz to head his defense team in May, but Kasowitz stepped down in July, with Dowd taking over the lead role, according to a people familiar.

Trump is also being represented by constitutional lawyer Jay Sekulow. Special White House counsel Ty Cobb, who is a salaried staff member, is also working on the matter.

The Trump campaign has paid law firm Jones Day almost $4 million, according to campaign filings, mostly for routine campaign legal expenses like ballot access disputes, vendor contracts, human resources and compliance with state and federal laws. It has also responded to Russia-related inquiries on behalf of the campaign by, for example, providing documents to Congress.

FOLLOWING OBAMA'S LEAD

The reason Trump is able to tap into his campaign funds for legal expenses is because for the past decade, presidential candidates have abandoned public financing for their campaigns. Instead, they have built networks that collect millions of dollars from private donors, a move that comes with less restrictions on how the money is spent.

Barack Obama in 2008 was the first to eschew public financing for his campaign, and all the major-party candidates followed suit in 2012 and 2016, campaign filings show.

Trump also filed for reelection the day he took office in January, two years earlier than any previous president, ensuring a fund of millions in campaign cash would remain at his disposal.

According to its most recent filing to the Federal Election Commission, Donald J. Trump for President Inc had almost $12 million on hand by the end of June, an increase of over $4 million since January.

Adav Noti, a senior director at the Campaign Legal Center, a watchdog group that describes itself as nonpartisan, said public campaign funds - as opposed to the private funds Trump has raised - cannot generally be used for expenses arising from criminal investigations, or for any expenses that arise after the campaign is over.

President Bill Clinton, who ran two publicly funded campaigns, had supporters start legal defense funds and used his own insurance to help pay legal bills during the Whitewater investigation. He still wound up with millions of dollars in personal debt which he paid off through speaking fees he earned once he left office.

Hillary Clinton, who ran a privately funded campaign, paid millions to campaign lawyers at Perkins Coie to handle routine legal matters, according to campaign filings. Her campaign made no payments to the Washington law firm Williams & Connolly, which represented her in the probes of her use of a private email server when she was U.S. Secretary of State.

Her lawyer, David Kendall of Williams & Connolly, declined to comment on how he was paid.

Campaigns also have discretion to pay legal fees for others besides the president.

According to a July filing, the Trump campaign paid $50,000 to the law firm of Alan Futerfas, who is representing Donald Trump Jr. Futerfas did not respond for requests for comment.

A number of other current and former Trump staffers have also recently hired lawyers. (Reporting By Karen Freifeld in New York and Ginger Gibson in Washington; Additional reporting by Grant Smith in Washington; Editing by Anthony Lin and Edward Tobin)