Can a politician keep all of the money from a campaign account after leaving office?
In July 2016, a Ballotpedia review of FEC records revealed that over $3.5 million sat in the campaign accounts for senators who had left the legislature since 2000.[1] Legally, these lawmakers were not required to do anything with that money. Another legal option: these former senators could have donated all of it to charity.
When Evan Bayh (D-Ind.) announced that he would run for U.S. Senate in July 2016—running in place of Baron Hill (D), who dropped out of the race—Bayh had $9.2 million ready to spend in his campaign account.[2] Bayh hadn't been in office for six years, and his campaign funds dwarfed the less than $1 million raised at that point by Todd Young, the Republican nominee.[3] At the time, The Washington Post predicted that Bayh's money would "go a long way to insulate Bayh from whatever attacks Republicans throw at him."[4]
How did $9.2 million sit in a campaign account for six years? And what were Bayh's legal options for using that money?
This article will explain what happens to excess campaign committee funds when a lawmaker leaves office. With leftover funds, former politicians can legally only use the money from campaign committees toward political or charitable purposes. They can:
- Pay for winding-down costs
- Donate the funds to a recognized charity
- Donate to other politicians' campaign committees
- Donate to party activity at the federal, state, or local level
- Do nothing
What can politicians do with unused campaign funds?
Federal campaign finance laws and regulations
The general rule for the use of excess campaign funds after a federal lawmaker leaves office is that the funds cannot be used for personal expenses. They must be put toward political or charitable uses.[11] The following sections detail the options for federal campaign committee funds once a candidate ceases to hold office.
Pay for winding-down costs
Campaign funds can be used to "wind down" the office of a federal lawmaker. According to the FEC, winding-down costs are "ordinary and necessary expenses incurred in connection with one’s duties as a federal officeholder" and can include moving costs, payments to campaign committee staff, or "gifts ... [or] donations of nominal value to persons other than the members of the candidate’s family." These winding-down costs are only applicable for six months after an officeholder leaves his or her position.[12]
Donate the funds to a recognized charity
One option for unused campaign funds is to donate them as a charitable contribution. In the 1979 amendments to FECA, charitable contributions are defined as donations to groups described in section 170(c) of the Internal Revenue Code. This includes contributions for use by the state, recognized nonprofit organizations, and other organizations not designed for private interests.[13] After his retirement in 2013, former U.S. Sen. Joe Lieberman (I-Conn.) used the remaining funds from his campaign account for charitable purposes, starting the Joe Lieberman Connecticut Scholarship Fund. He also spent some of the money organizing his personal and professional papers for donation to the Library of Congress.[14]
This option also includes creating a nonprofit organization with the leftover campaign funds. In 2008, former Rep. Ron Paul (R-Texas) used the remaining money from his presidential campaign to form the Campaign for Liberty, a 501(c)(4) nonprofit.[15]
Unused funds can also be donated to other candidates' committees, but such donations are subject to state laws on contribution limits where applicable. Federally, these donations are limited to $2,000 to a single candidate's committee each year, according to the Center for Responsive Politics.[11]
Donate to party activity at the federal, state, or local level
Federal law allows for unlimited transfers of unused campaign funds to federal, state, or local parties and party committees.[11][12]
A former legislator does not have to do anything with remaining money in his or her campaign account. This was the case with Bayh until 2016, as he rarely donated any money to candidates or party activities. In 2015, The Atlantic reported that Bayh "donated to a handful of past Senate and House campaigns" but that these donations were largely offset because "interest keeps replenishing Bayh's account as he spends and donates from it." The article also reported other former lawmakers who had campaign funds and had chosen to do nothing with them at the time. These lawmakers included former U.S. Reps. Joe Kennedy II (D-Mass.), Michele Bachmann (R-Minn.), and Mark Foley (R-Fla.).[16]
What happens to the funds if a lawmaker dies?
In the event that campaign funds are still available for a lawmaker or former lawmaker who passes away, those funds remain bound by the provisions outlined above. The person responsible for distributing those funds is the official treasurer of the campaign.[17]
Footnotes
- ↑ Ballotpedia staff surveyed the FEC records of all senators who had left office since 2000. While most campaign committees had been terminated, the records search showed that the campaign accounts still in operation had a total of $3,514,814.27. The former senator with the most remaining campaign money was Max Baucus (D-Mont.), who resigned his seat in 2014 to become the U.S. Ambassador to China. In July 2016, Baucus still had $1,071,564.09 left in his campaign committee's account.