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Sunday, January 15, 2012

Few rules control super-PAC donations after a candidate withdraws from a race

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Influence IndustryDan Eggen & T.W. FarnamFew rules control super-PAC donations after a candidate withdraws from a race

View Photo Gallery — The Iowa caucuses shook up the GOP presidential race.

Text SizePrintE-mailReprints By T.W. Farnam,

When presidential candidates drop out of the race, what happens to the million-dollar contributions sitting in their super PACs?

As it turns out, no precedent exists for this situation, since this is the first campaign in which the independent groups known as super political action committees have formed to help just one candidate.

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New rules for money in the presidential race have created some unexpected quirks in an already confusing system of regulations and practices.

The groups are spending millions of dollars to help many of the presidential candidates. The PACs are not subject to the $2,500 cap on donations to candidate campaigns, and a few super PACs have already accepted single contributions of $1 million or more.

The catch is that super PACs can’t coordinate spending with the candidate or the campaign they’re trying to help, even though the groups are often run by former advisers to the candidate.

Mitt Romney’s super PAC, Restore Our Future, is typical of the close ties between the nominally independent organizations: It’s run by three former aides to his 2008 campaign, and a top fundraising official jumped from the campaign to the PAC earlier this year.

Created as a result of the Supreme Court’s landmark Citizens United v. Federal Election Commission decision in 2010, super PACs have reported spending $13 million on this year’s Republican nomination contest. They have probably raised much more, but the details of their recent financial activity will not be disclosed until Jan 31.

But what happens when the candidate drops out? Who controls the money in the super PAC? It seems the law has few restrictions on what can be done with the money.

“The bottom line is the folks running these things can do whatever they want,” said Paul Ryan, a lawyer with the Campaign Legal Center, which advocates for tighter regulation of money in politics. “They can buy themselves yachts and close up shop if they chose to do so.”

Legally, spending responsibilities rest with the PAC’s treasurer, who reports to whomever is running the group.

Candidates are prohibited from using campaign money for their personal expenses, but there’s no such restriction for PACs, several campaign lawyers said in interviews.

The Federal Election Commission, which regulates campaign money, has repeatedly asked Congress to amend the law to prohibit PACs from spending donations on non-political expenses. Lawmakers, who often use political contributions for personal expenses through vehicles known as leadership PACs, haven’t followed through on the request.

Once the presidential contenders are no longer candidates, they could take over for their former aides and spend the million-dollar contributions as they wish — for a political purpose or anything else.

It’s unclear under the law how long former candidates would have to wait before taking control of their super PACs. It’s possible they would have to settle all their own campaign accounts before they could spend big contributions raised by super PACs. And any federal officeholder is prohibited from spending it altogether, so, for example, Rep. Ron Paul (R-Tex.) couldn’t take control of a super PAC until he left Congress.

Even though it’s legal, it’s still a stretch to think that any candidate would actually go for that yacht.

“I think if you wanted to have any political future you wouldn’t do that,” said Bradley Smith, founder of the Center for Competitive Politics, which advocates for less regulation of political money.

The most likely outcome would be that the super PAC goes on to support whomever their candidate endorses in the race, assuming there is an endorsement. Major donors to the group would also have a big say in which candidates would get support with their donations.

Several of the current GOP candidates could use financial help, especially former senator Rick Santorum of Pennsylvania, who won a close second place in Tuesday’s Iowa caucuses. ¦

¦Romney’s in good shape — it’s the other candidates who could use the help,” said Michael Toner, a campaign lawyer who represented Tim Pawlenty’s campaign. “There’s a clear need by a few of these candidates for super-PAC help, and the opportunity exists both politically and legally to make that happen quickly.”

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