Omar Bennett
When political campaigns end, candidates are often left with a significant amount of money. While there are rules about what this money can be spent on, there are still a lot of options for candidates, both within and outside of politics. Candidates cannot use leftover money for personal expenses, but they can use it to pay off any outstanding bills or debts, or costs required to close up their offices. They can also donate the money to charity or pass it to national, state, or local political party committees.
| Characteristics | Values |
|---|---|
| What happens to unused political campaign money? | Candidates can use the money to pay off campaign debts, or they can donate it to charity, transfer it to a party committee, or make political contributions within certain limits. |
| What are the rules regarding leftover campaign funds? | Candidates cannot use leftover funds for personal expenses. They must follow FEC guidelines and rules set by state and local governments. |
| Can candidates keep the leftover money? | Yes, candidates can let leftover funds sit in their campaign accounts, especially if they plan to run for office again in the future. |
| How much unused campaign money is there? | In 2014, it was reported that former members of Congress had millions of dollars in unused campaign funds. |
| Public funding of campaigns | Taxpayers can choose to designate $3 of their taxes to the Presidential Election Campaign Fund. Presidential candidates can receive public funds if they agree to limit spending and not accept private contributions. |
| Sources of campaign contributions | Large donors, political action committees (PACs), dark money groups, and individual taxpayers. |
| Spending and victory | Spending a lot on a campaign does not guarantee victory, but it usually increases the chances of winning. |
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What You'll Learn
Candidates can't use leftover funds for personal expenses
In the United States, candidates are prohibited from using leftover campaign funds for personal expenses. This prohibition has been in place since the passage of the Ethics Reform Act in 1989. The Federal Election Commission (FEC) provides guidelines and regulations to differentiate between legitimate campaign expenses and personal expenses.
The FEC's "`irrespective test'" defines personal use as any expense that would exist irrespective of the candidate's campaign or responsibilities as a federal officeholder. In other words, personal use refers to expenses that are not directly related to the campaign or the duties of the officeholder. Examples of prohibited personal expenses include salary payments to the candidate's family members who are not providing bona fide services to the campaign, food purchased for daily consumption, and household supplies.
Campaign funds may, however, be used for certain expenses related to the candidate's security, as long as these measures address ongoing dangers or threats that arise specifically due to their status as a candidate or officeholder. Additionally, funds can be used for funeral, cremation, and burial expenses for a candidate or campaign worker whose death occurs during campaign activity.
Candidates must keep diligent records of their campaign finances and ensure that any leftover funds are properly dispersed. They can donate unlimited amounts to charities or political parties and, within specified limits, make contributions to other candidates. Leftover funds can also be saved for future campaigns or returned to donors.
While there is limited FEC oversight, former lawmakers are still expected to adhere to the rules regarding personal use of campaign funds. The FEC is responsible for enforcing these rules and taking action against any violations.
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Leftover money can be used to pay off campaign debts
When a political campaign ends, candidates are often left with leftover money. While candidates cannot use leftover funds for personal use, they can use the money to pay off campaign debts. This includes expenses incurred while winding down a campaign, such as rent on office space, fees for services like polling and transportation, and staff salaries. Candidates may also use leftover funds to pay off loans or credit card debt accumulated during the campaign.
In some cases, candidates may need to continue fundraising after they have dropped out of the race to pay off these debts. For example, Newt Gingrich and Rick Santorum were still working to pay off their campaign debts six months after dropping out of the 2012 Republican presidential nomination race. Similarly, former presidential candidates Rudy Giuliani, Dennis Kucinich, and John Edwards took years to pay off their campaign debts.
Leftover campaign funds can also be used to support future campaigns. For example, Cory Booker can use money left over from his presidential campaign to run for reelection to the Senate. Once his presidential campaign debts are paid off, he can transfer the remaining funds to his senatorial reelection campaign fund. If he wants to run for president again in the future, he can easily transfer the funds to a committee for the next campaign season.
Candidates can also use leftover funds to create a "leadership PAC," which they control but do not use to support themselves. They may also donate surplus funds to charity or to other political candidates, depending on state campaign finance laws.
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Candidates can donate leftover funds to charity
According to FEC guidelines, candidates for federal office, including presidential candidates, can donate an unlimited amount to a charity or political party. They can also, within limits, make contributions directly to other candidates. A campaign committee can give up to $2,000 per election to each candidate, while a former candidate can donate up to $5,000 per year to a political action committee (PAC).
Candidates may also choose to use the leftover funds to support their next campaign or a future run for office. This could involve transferring the funds to a committee for a future campaign season or creating a "'leadership PAC,' a political committee controlled by the former candidate but not used to support their campaigns.
In addition, leftover funds can be used to pay any outstanding bills or debts incurred during the campaign, including expenses for office space, polling, transportation, and staff salaries. Candidates may also use the money to issue refunds to individual donors or pass it on to national, state, or local political party committees.
While candidates have a range of options for disposing of leftover campaign funds, it is important to note that they cannot use the money for personal expenses, such as mortgage payments, groceries, clothing, or vacations.
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Candidates can transfer funds to a committee for a future campaign
In general, funds can be transferred without limit between authorized committees of the same candidate, such as from a previous campaign to a current campaign committee. This includes transfers to a future election campaign committee of the same candidate. An authorized committee may also transfer unlimited campaign funds to a party committee or organization, and there are no restrictions on the frequency of these transfers.
It's worth noting that contributions transferred from a previous campaign to a current campaign must be aggregated with contributions by the same contributors to the current campaign. Additionally, the transferor committee must be able to demonstrate that their cash on hand contains sufficient funds to comply with the limitations and prohibitions of the Federal Election Campaign Act to cover the amount transferred.
While candidates can transfer funds to a committee for a future campaign, personal use of these funds is prohibited. This includes using the money for expenses that exist independent of the campaign, such as salary payments to the candidate's family, unless they provide a bona fide service to the campaign and the payment reflects the market value of the service.
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Candidates can convert their campaign committee into a PAC
Candidates can choose to convert their campaign committee into a Political Action Committee (PAC) instead of terminating it. This is an option for candidates who do not plan on seeking public office again but want to retain some influence in politics. To do this, the committee must amend its Statement of Organization, Form 1, and change the committee's name to one that does not include the candidate's name. The committee remains responsible for resolving outstanding obligations, such as debts and unrefunded impermissible contributions, and must continue to address any Requests for Additional Information received before the conversion.
There are different types of PACs, including connected committees, nonconnected committees, Super PACs, and Hybrid PACs. Connected committees are typically sponsored by and connected to a corporation, labour organization, or other organization, while nonconnected committees are not and are free to solicit contributions from the general public. Super PACs are independent expenditure-only political committees that can receive unlimited contributions from various entities to finance independent expenditures and other independent political activity. Hybrid PACs maintain two separate bank accounts, one for making unlimited independent expenditures and the other for making contributions that are subject to statutory amount limitations and source prohibitions.
To be established as a PAC, a committee must have been in existence for at least six months, have received contributions from 50 donors, and have made contributions to five recipients. Once established, a PAC must register with the Federal Election Commission (FEC) within 10 days, providing the PAC's name and address, the name of its treasurer, and any connected organizations. PACs are subject to FEC rules and regulations, and they must file regular financial reports disclosing their donors and expenditures.
As PACs, former campaign committees can give up to $5,000 to a candidate committee per election (primary, general, or special) and up to $15,000 annually to any national party committee. They can also give $5,000 annually to another PAC and receive up to $5,000 from any one individual, PAC, or party committee per calendar year. It is important to note that PACs cannot use their funds for personal expenses, and any leftover money from the campaign committee days must be used for outstanding bills and debts first.
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Frequently asked questions
Candidates can use leftover funds to pay off any outstanding bills or debts incurred during the campaign. They can also donate an unlimited amount to a charity or political party, or contribute directly to other candidates within certain limits.
No, candidates cannot use leftover funds for personal expenses such as mortgage payments, groceries, clothing, or vacations.
Yes, candidates can keep leftover funds in the bank for future campaigns.
Yes, candidates can donate leftover funds to political action committees (PACs), but only up to a certain amount per year. They can also use leftover funds to create a "'leadership PAC,' a political committee that can be controlled by the former candidate but is not used to support their own campaigns.
