Flush with campaign cash, Wsconsin Gov. Scott Walker and former Texas Gov. Rick Perry both expected to make serious runs at the 2016 Republican presidential nomination. Both men’s efforts failed.
So what happens to the leftover money that went to those campaigns? Where does it go now?
It’s a matter of choice. Campaign finance law gives broad discretion to candidates when it comes to how they spend their remaining funds.
Getting rid of a lot of money is unlikely to be a problem for Walker and Perry, since fundraising difficulties played a large role in their decisions to drop out.
One thing is clear: “They can’t take (their) campaign money and put it in their pocket,” said Paul S. Ryan, senior counsel for the Campaign Legal Center. “That’s illegal.”
Candidates can contribute leftover funds in any amount to charities or to political parties. They can donate funds to other candidates, though the contributions to candidates for federal office are capped at $2,700.
“It’s not a good way to get rid of a large chunk of money,” Ryan said.
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Getting rid of a lot of money is unlikely to be a problem for Walker and Perry, however, since fundraising difficulties played a large role in their decision to drop out. Perry had more than $1.1 million, with $883,917 in the bank, according to a campaign finance report for the period ending June 30. Walker did not formally enter the race until July, so he did not file a campaign report.
Perry reportedly was unable to pay campaign staff, and Walker was finding that funding sources were drying up amid poor polling and mediocre debate performances. Perry was the first Republican candidate to get out of the race on Sept. 11, and Walker followed him into 2016 oblivion on Monday.
Another option is to turn the campaign committee into a super PAC.
If their campaigns have debt, election law requires they keep their committees on the books and make an effort to raise funds to pay it off.
“But they (the contenders) have a really hard time raising money as candidates who quit the race,” Ryan said.
He said members of Congress, who often raise large sums year after year with light competition, commonly leave office with millions of dollars. Candidates who take K Street lobbying jobs often convert those campaign accounts to political action committees, Ryan said. It requires filing paperwork and living by a different set of rules, he said, but it allows former members of the House and Senate to boost their influence as lobbyists.
Presidential campaigns more typically spend most or all of what they raise, Ryan said.
“I think it’s very unusual for presidential candidates to leave the campaign with a big war chest,” he said.
Tech magnate Darwin Deason wants his $5 million back from one of Perry’s super PACs.
This will be the case, most likely, when Walker files his final campaign report, Ryan said. “When we see the paperwork, I doubt we’ll find much in it,” he said.
If candidates, presidential or congressional, can convert their campaign funds into multi-candidate political action committees, they can make higher-value contributions to candidates but must operate for about six months and have at least 50 donors. Another option is to turn the campaign committee into a super PAC.
Speaking of super PACs, a small number of wealthy donors funded well-stocked super PACs closely aligned with Walker or Perry. Three super PACs supporting Perry raised almost $17 million by the end of June. A Walker-associated super PAC, Unintimidated, reported raising more than $20 million by the end of June before he was a formal candidate.
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It will not be clear exactly how much the super PACs had when the candidates suspended their campaigns until they file their next reports. The deadline is Jan. 31. But representatives of the PACS have said they expect to wind down the committees and refund donors. Politico reported earlier this month that tech magnate Darwin Deason wants his $5 million back from one of Perry’s super PACs.
Under the law, however, there is no requirement for super PACs to refund money. Since they technically are independent of the candidates they formed to support, they can keep operating forever, according to the Federal Election Commission.
“They can continue to raise and spend money,” FEC spokesman Christian Hilland said. “They can support another candidate.”
Technically, Perry and Walker both “suspended” their campaigns rather than quit them. Ryan said the distinction has no legal meaning because that term does not appear in campaign finance law. He said either candidate could theoretically jump back into the race at a later date.
Usually, though, candidates mean they are quitting when they suspend campaigns. That decision becomes final when candidates file paperwork closing out a campaign committee or converting it to another type, he said.
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