Thursday, May 15, 2008

How Will Clinton Resolve Campaign Debt?

NPR had this story a few days ago. In light of my last post, Clinton may be taking some steps. Here is one possible option:
One further option is especially creative.

Clinton raised roughly $22 million for the general election, mainly from donors who hit the legal limit for primary campaign contributions and wanted to give more money. Some lawyers say she could take that general-election money and the commercial debt and redirect them both to her 2012 Senate campaign.

Redirecting the general-election contributions would require each donor's consent. But Clinton could not keep that money for any other use. And according to some campaign finance attorneys, it could mean that some donors could give to her presidential primary effort three different times.

First, they gave by writing a check for the primary. Next, their general-election check would be redirected to the Senate campaign and used to pay down the old presidential primary debt. And finally, they could write a check directly to the Senate campaign — also to be used to pay off the debt.

This might sound like money laundering to some, and campaign finance lawyers in Washington are debating whether the regulations allow it or not. Toner, for one, says they do. "There is a long history of candidates transferring funds to future election cycles and then being able to go back to those same donors for the maximum contributions," he said.
The Toner is former FEC Commissioner Michael Toner, and I am not so sure he is right. Yes, Clinton could move money and debts to her Senate campaign, that much is legal. However, I am not so sure that the regulations allow a "third contribution." Assuming Clinton gets permission from her presidential general election donors to move the money to her Senate campaign, I think the money would be considered at minimum a general election contribution for her 2012 Senate campaign or possibly a primary contribution to her Senate campaign. She could use the money to pay her debts (and her presidential general election fund is probably large enough to do that), but I don't think she can tap those donors again for another primary election contribution to her Senate campaign.

Still it is an interesting question.

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