What happens to political donations
The number of people running for the Democratic nominee for president has shrunk over the last week as John Hickenlooper, Jay Inslee, and Seth Moulton have dropped out of the race.
Moulton’s campaign was marred by an inability to connect with voters nationwide, but he’s returning to his home district in Massachusetts to compete against primary challengers. The other two candidates, meanwhile, will move on to high-profile contests. Hickenlooper will try to flip a Republican-held Senate seat in Colorado, and Inslee will once again seek to occupy the governor’s mansion in Olympia, Washington.
Just because their goals are shifting doesn’t necessarily mean their campaigns are starting over. Their donor and support networks have expanded, certainly, and some of the presidential dropouts to follow may even “fail up” to a cabinet position. Wherever candidates find themselves in January 2021, they can plan to keep the money donated to their presidential run.
“Once a campaign ends, the Federal Election Commission is supposed to monitor leftover contributions,” says Brendan Quinn, outreach and social media manager for the Center for Responsive Politics. “However, there is not much that the FEC can do to keep track of this excess money. There aren’t that many limits on what you can do with that money, anyway.”
The ‘zombie campaign’ epidemic
Defunct campaigns frequently have hundreds of thousands of dollars (and sometimes more) sitting in bank accounts for years after a candidate loses, or retires entirely. The FEC dictates that all leftover campaign funds must be used for elections or charitable giving. However, recent investigations have found that there is no shortage of politicians who willfully misspend these donations.
This trend was put in stark relief last year after The Tampa Bay Times published an investigation into campaign expenditure violations they dubbed “zombie campaigns.”
“Since that exposé came out and buzzed around the money-in-politics world, the FEC has started paying a little bit more attention to this stuff and handing out some fines to the people that are blatantly using these funds for the wrong purposes,” says Quinn.
The article uncovered about 100 instances of campaigns spending money long after their candidate had given up politics. In some cases, the spending went on after the politician’s death.
For example, there was Rep. Mark Foley of South Florida, who was forced out of office in 2006 after the story broke that he sent explicit texts to teenagers. Despite his disgraceful exit from Congress and politics, Foley was using campaign contributions to pay for lunches that cost hundreds of dollars in swanky Palm Beach clubs. The campaign for Rep. Mark Takai of Hawaii shelled out $100,000 to an adviser over the course of a year following the congressman’s death.
Many candidates used donations to provide salaries to family members for menial labor. The report is further marked by blatantly personal expenses like club memberships, limo rides, and, in one case, $4,555 for college football tickets.
The FEC has an enforcement problem
While FEC guidelines should preclude rampant zombie campaign spending, the makeup of the commission’s current leadership hampers regular enforcement of even its most explicit rules.
The FEC is led by six bipartisan commissioners appointed by the president and confirmed by the Senate for six-year terms. That process, however, has broken down in recent years.
Currently, there are only four commissioners, and all of them are serving on expired terms. Recent public documents show that a schism exists between the commissioners that makes it difficult for the group to execute their duties.
“They have a very hard time coming to any decision because they famously do not get along. So, there’s just not much the FEC can do right now because all four of them need to agree in order for there to be a quorum and a vote. That very rarely happens anymore. It’s gridlocked,” says Quinn.
Public outcry over recent egregious campaign expenditure violations has led to action on a few notable cases. Ongoing litigations against Rep. Duncan Hunter, a Republican from California’s 50th District in San Diego County, provide a recent high-profile example.
Hunter and his wife Margaret are accused of using more than $200,000 of campaign funds to supplement their personal expenses. Margaret has pleaded guilty and is cooperating with prosecutors. Her plea acknowledges the family willfully charged personal expenses on the campaign’s credit card, using contributions to pay for private school tuition, transporting the family bunny from California to Washington, D.C., and other frivolous ends.
Duncan Hunter pleaded not guilty and maintains that any illicit spending was an error, and has paid back tens of thousands of dollars to his own campaign. While the Hunters’ behavior could result in jail time, that sort of punishment is atypical.
Quinn says, “Most often, when someone gets in trouble with the FEC they get a fine. The fine will vary from one case to the next.”
Elections expected to keep getting more expensive
While the FEC is effectively paralyzed, elections keep getting more and more expensive. Money continues pouring into the system regardless.
Inflation, of course, naturally makes every cycle more expensive than the last. Recent changes to policy have also had an effect. The 2013 Supreme Court case McCutcheon v. FEC, for example, removed the cap on how much an individual can spend across all elections in a cycle.
Quinn says, “Now, someone could, if they wanted, give the max donation to everyone running for House, Senate, and Presidency in this election cycle. That’s why there’s such a huge spike in spending post-2014, and why 2016, 2018, and now 2020 are becoming the most expensive elections ever.”
Donor engagement has also changed in the last few years, specifically in response to the candidacy of Donald Trump. Huge swaths of grassroots donors activated in response to Trump’s 2016 campaign and the policies of his administration. These donors give more frequently and to a greater variety of candidates than seen in earlier elections. Women on the left, in particular, have started engaging in politics at heretofore unseen rates.
The internet has facilitated a larger and more intricate ecosystem of donation mechanisms. Sites like ActBlue — and its new conservative counterpart WinRed — allow people to contribute to and participate in elections far from their homes.
Another source of change rests with the Democrats. The party added qualifying polling and donation requirements that get stricter with each passing debate. These new rules forced candidates to pivot toward new advertising models that focus on procuring donations as small as $1. Donors have, as a result, experimented with giving tiny amounts to multiple candidates rather than pooling all their contributions for their top choice.
“It’s all converged into this environment where donating is less about just who a voter thinks should become president,” says Quinn. “People feel like they can and should donate to ensure certain ideas remain a part of the conversation, even when the candidate isn’t likely to win the nomination.”
As the 2020 political cycle keeps revving up, a series of record-breaking donations and expenditures appears likely. It’s vital that Americans understand how money is spent at all stages of the political process. Donations don’t disappear after an election ends, but they can be misspent if entrusted to the wrong candidate.
Quinn says, “When the people at large aren’t informed about who’s funding our elections, the people that benefit are the people who spend the greatest amount of money on those elections. Transparency is the key to holding our politicians accountable.”