Friday, May 09, 2008

Hillary Clinton and the big refund

If Senator Hillary Clinton seems unusually reluctant to read the handwriting on the wall and withdraw gracefully from the presidential race, the reason might be money.

Specifically, the money she raised for the general election.

You might remember that in the long-ago days of early 2007, Senator Clinton asked her donors for $4,600, even though federal law limits an individual's contributions for the primary election to $2,300. The second $2,300 was for the general election, the Clinton team explained to the donors, and why not collect it early and show the political world some real financial muscle?

The trouble is, the Clinton campaign is required by federal law to return those $2,300 checks for the general election campaign if Senator Clinton is not the Democratic nominee.

It's possible, of course, that the general election money is locked away in a separate account and it will be no problem at all to comply with federal law and send those checks right back to the donors who wrote them.

I think we're all in agreement that this can safely be ruled out.

It's hard to believe that Hillary Clinton loaned her campaign $11 million from her personal funds while there was a single uncashed check lying around the office.

That means she has to replace those general election funds, and fast, before she gets out of the race and the nice folks from the Federal Election Commission stop by her Senate office to say hi.

This would explain her plea for funds during her election-night speech in Indiana, and the fundraiser she attended the next day, and the conference call her husband reportedly held with donors on Thursday.

It's a pain to pay campaign debt, but it's a crime to use general election donations for a primary.

How much does she have to refund? It may be difficult to determine. This is an excerpt from Kenneth P. Vogel's story in the Politico, April 2, 2007:

Things could be particularly tricky this presidential cycle, though, since it’s the first in which multiple candidates are expected to raise money for both the primary and general election. That effectively doubles the amount candidates can accept from each donor to $4,600 -- technically $2,300 for the primary and $2,300 for the general election.

Candidates may pad their fundraising hauls by including their general election contributions in proclamations trumpeting their fundraising success. But [PoliticalMoneyLine's campaign cash tracker Kent] Cooper said it will be important for reporters to separate out such contributions, since candidates who don’t win their party’s nomination will have to refund donations for the general election.

The FEC doesn’t have a system for quickly distinguishing such funds, but it’s working on one, said spokeswoman Michelle Ryan.
So there you have it. If Hillary Clinton stays in the race all the way until the convention in Denver, she can stall the day of financial reckoning until the very moment the delegates nominate Barack Obama for president.

Between now and then, you may hear teams of political experts declare that they don't know why Senator Clinton is staying in the race, they don't know why she's risking her reputation and her political future, and they don't know why she won't listen to all the advisors who are giving her such good advice.

They may not know, but you will.

Copyright 2008