Short Stuff: Unspent Campaign Money

Have you ever wondered what happens to all those campaign donations when a political campaign goes belly up? Or, even worse, is in debt! Wonder no more!

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Episode Transcript

Speaker 1 (00:04):
Hey, and welcome to the Short Stuff. I'm Josh Clark,
There's Charles W. Chuck Bryant, there's Jerry over there. So
this short stuff from Stuff you Should Know Short edition
about campaign money money. I think we've done some we've
dabbled around this topic before, but this is a little
shorty question answered. Yeah, it's a based on a how

(00:27):
stuff works article we should call out um. But like,
I've always kind of wondered this but didn't realize i'd
wondered it, because I think if I had actually wondered it,
I would have just gone and researched it and found out,
you know, the answer. But it was like in the
back of my head, like one of those questions I
didn't know I wanted to know the answer to until
I saw the question. You know what I mean? Well, yeah,

(00:48):
and I know that I've donated to political campaigns and
then never said, hey, wait a minute, you lost did
you spend my money? Right? But didn't it didn't cross
your mind. I know you never said it, but did
you ever think, like, did my money get spent? I
just assumed that it got spent five seconds after I
hit the click button. You know, I think that's frequently

(01:09):
the case, but it is possible every once in a
while that a candidate becomes so popular and raises so
much money, but then that popularity and that that war
chest of campaign money is disproportionate to their actual chance
of becoming the nominee for the party. Case in point

(01:30):
was Jeb Bush in two thousands, the two thousand and
sixteen election. Jeb he raced a lot of dough and
did not. You know, I'm not sure if like the
if there's an equation for money spent and chances of winning,
which they're supposedly, is he bucked that trend? He really did.
He had UM. I think he raised something like a

(01:53):
hundred and fifty two million dollars, a hundred and fifty
two million dollars, which was far and away the most
of all the Republican UM nominees that primary season UM
and did not get it, and that is really unusual.
But the reason we're mentioning this is because he had
so much money, he um got caught with some left over.

(02:15):
And that's fine, like that's not the end of the world.
But it does raise that question if you have millions
and millions of dollars of campaign contributions and you didn't
make it to the general election. What happens to all
that money? Yeah, I mean, and it kind of depends.
And you know, when you say being caught, that doesn't
mean that he did anything wrong aside from I guess

(02:35):
doing everything wrong to not win. But it's not like
he was caught doing something bad. He was just you know,
he lost early enough to where there was a you know,
millions and millions and millions of dollars left over, UM,
And what happens that money, It kind of depends on
where it comes from. Right, So there there now that UM,

(02:55):
the Supreme Court has completely ruined democracy with the Citizens
United case UM. There are two two main groups that
can be fundeling money towards a particular candidates candidacy. There's
the candidate him or herself in their campaign, and then
there's also superpacks political action committees. And they used to

(03:15):
be political action committees, but now they're on steroids because
they can raise unlimited funds and spend unlimited funds to
help a candidate. So long as the superpack and the
candidate aren't coordinating how that money has spent. There just
there to support the candidate in ideally on paper, I
should say yeah, and earlier when I said, uh, you know,

(03:37):
if I gave, as in just an independent schmo um
money to candidate, it is probably likely that that money
is burned through pretty quickly. Um. This this these personal contributions.
I get the idea that they kind of spend that
stuff because you know, and it points out in this
article if it's like kind of now never, if you're

(04:00):
not you're not like you're holding onto that stuff for
a rainy day. You're trying to win an election. Uh.
And one way to do that is by spending tons
of dough So that's called like cash on hand. Right,
that's when like you Chuck wrote a check to Jeb
Bush and said go Jeb and like the memo, and
Jeb's campaign went and cash that money and put it
in their account. That's cash on hand. Yeah, they burned

(04:23):
through that very very very frequently. But there's also like
a constant flow of money coming in over time, and
their campaign may stop as that money still coming in.
So the question remains, like what does Jeb Bush's campaign
do with that? And there's actual rules for what they
can do and can't do with it. Really the main

(04:43):
rule is that after after Jeb Bush drops out of
the race or doesn't doesn't get chosen as the party's
nominee for the general election, he doesn't get to just
be like, thanks for the hundred million dollars, chumps, I'm
gonna go buy a yacht. That's basically the only rule
that the FEC has, well, one of one of a
few rules, but that's the big one. Yes, no yachts, right,

(05:06):
no yachts cla. Uh yeah, it's basically, you can't spend
anything on your personal expenses. Um, And why don't we
take a break and we're gonna come back and talk
about some other FEC rules right after this. All right,

(05:42):
So you can't spend that stuff on yourself. You can't say, like, geez,
um brace all this money. I'd love to pay off
my mortgage while I'm at it. Um. That's kind of
like the main thing. There are things you can do,
they're called permissible uses. Uh. You can donate that money
to party, which being especially if it's like a nice

(06:04):
charity everybody can get behind, like the Save Puppies dot
Org or something like that, you know exactly, Um, this
is what I don't quite get it. Says, because we
pull from two sources. One says, you can just donate
it to another candidate, but I think that's limited to
two thousand dollars if it's just a personal donation. But
you can can you transfer everything to like a pack,

(06:29):
I believe. So. I think the thing that was wrong
here is that that the person didn't say the person
from Open Secrets or didn't say that they can give
it to another candidate up to two grand, they can
give the whole thing to the party, or yeah, they
can transfer it to to a superpack. So the candidate
can apparently take that money and give it to a superpack,

(06:52):
but a superpack can't give their money to a candidate.
But the impression that I have is that that superpack
would have to spend that money on that candidate, either
in a future election or if the candidate also is like, well,
I'm just gonna run for Senate instead, they would they
would be that superpack could fund that candidates um campaigns,
no matter what kind of election they were running for. Right.

(07:13):
And it's also highly likely that there's an understanding that
if a pack or superpack donates a ton of money
and that candidate loses and is out, especially if they're
out early on, then there's like a hey, you give
that back to us now, Yeah, especially with a super pack,
because super packs, from the impression I have from researching this,
are basically like a handful of extraordinarily wealthy billionaires who

(07:37):
are saying, yeah, this is our guy, we want to
back this person for their their presidential campaign, and then
if it doesn't, if it doesn't work, they get their
money back eventually. That that was unspent um that happened
with Rick Perry. Uh he got he I think he
had like thirteen million dollars and unspent funds, which um,
that was his superpack and the reason that they knew

(07:59):
that he he didn't even make it to the primaries.
And the big disparity between Rick Perry's UM campaign and
Superpack was that he he couldn't raise more than like
a million a million and a half dollars. His campaign couldn't,
which is bad news for your campaign. His pack raised
a bunch of money because there were a couple of
billionaires in Dallas who were basically funding the pack. So

(08:21):
when when it came down to the wheels hitting the
pavement and Rick Perry's campaign couldn't raise that kind of money.
He knew it was time to get out, and his
superpack contributors got their money back. And then you know
how I was talking about people spending uh, Like a
lot of times a candidate will actually um be in debt,

(08:41):
so like not only did they spend um. Scott Walker
is a good example of this, Wisconsin governor. He when
he dropped out in September two thousand fifteen, UM, he
had a million dollars in debts. So he burned through
that money. So it's not like there was anyone he
could there was no money to return. Yeah, And that's
the thing. And so like you can be in debt,

(09:02):
your campaign can be in debt, and if you're wealthy,
that's okay. Um, there's ways for you to to make
that money back to retire that debt. You can create
fundraisers over time, but that's really difficult to get people
to contribute to your campaign that's already lost so that
you can retire debt. UM. But if you're not wealthy,

(09:22):
you might have taken out like personal loans along the
way from banks, and that means that you the candidate
have personal loan obligations for the rest of your life
from this campaign that was unsuccessful. So it can be
really nerve racking to run for office and not win
or not become the nominee. Because if you are in debt, Uh,

(09:42):
you can get caught with that, um and it gets
written off. Anything over two hundred fifty dollars that you
loan to your campaign gets written off as a donation.
You're it's gone forever um after twenty days after the election. Yeah.
And in the case of like a Donald Trump or
I guess rather anyone in the first term of what

(10:04):
they hope is going to be a two term fair. Uh.
If you've just got all this money raised and then
you didn't spend it, your campaign is still an entity.
It's still an ongoing entity. It's not like they dissolved
that while you're in office and then you have to
restart at the end of your of your term again.
Like he just basically like anyone would keep that money

(10:25):
in the coffers for the second terms campaign. So that's um,
that's what happens to the unspent money. Uh, it just
evaporates if you really want to think about it. Uh.
And thank you for joining us on short stuff We'll
see you next time. For more on this and thousands

(10:46):
of other topics because it how stuff works. Dot com