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Since his disastrous performance in the presidential debates, there has been speculation about whether President Joe Biden will remain in the race. There have been stories circulating that senior Democrats such as Sen. Chuck Schumer (D-NY) are calling for him to drop out of the race, citing serious questions about his health and that they don’t believe he can beat former President Donald Trump.
That raises serious questions: Now that Biden has withdrawn, who will control the campaign funds raised by the official “Biden for President” campaign committee, and what can they do under federal campaign finance laws and regulations?
As of June 20, when President Biden filed his latest election report with the Federal Election Commission (FEC) outlining his campaign finances through the end of May, Biden’s campaign committee had $91.5 million in “cash on hand.” I served on the committee. Below are a series of questions and answers about what this money can and cannot do.
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If Biden drops out of the race, will donors be able to get their money back?
Federal law does not require the campaign to refund donors who request it, leaving it entirely up to the Biden campaign to decide whether to refund donors who request it.
President Joe Biden’s campaign funds could go to Vice President Kamala Harris if she becomes the nominee. FILE: The two appear on the Truman Balcony at the White House in Washington, DC, Thursday, July 4, 2024. (Tierney L. Cross/Bloomberg via Getty Images)
If Kamala Harris becomes the Democratic presidential nominee, will she be able to receive campaign contributions?
Yes, because when the Biden Campaign Committee filed its registration return with the Federal Election Commission, the committee registered as the “principal campaign committee” for both Joe Biden and Kamala Harris.
If someone other than Kamala Harris becomes the presidential nominee, will that person have access to the $91.5 million for their presidential campaign?
No, due to FEC regulations, the new candidate does not have access to or control over Biden’s presidential campaign funds, and the Biden presidential campaign cannot contribute more than $2,000 to the new presidential candidate’s campaign committee.
Could the funds be transferred to the Democrats?
Yes, under FEC rule 11 CFR 113.2, there are no limitations on the transfer of funds from candidate committees to political party committees. Thus, Presidential candidate Biden may transfer all of his funds to the Democratic National Committee, the Democratic Congressional and Senate committees, and state and local political party committees, which may then use the funds to support federal, state, and local candidates. In addition, under this rule, he may also donate to “state and local candidates, as provided by state law.”
But because party committees have spending limits — a legacy of federal campaign finance reforms after the Watergate scandal of the 1970s — there are limitations on how much the Democratic National Committee can spend in coordination with a new candidate’s campaign committee.
For the 2024 election, the cap is $32.4 million. Party committees can spend on their own in presidential elections, but they cannot coordinate unlimited spending of the newly transferred funds.
Will this money be used to fund a Super PAC?
Yes, the funds transferred to the new Super PAC can only be used for independent expenditures, without coordination with the new candidate. As explained by the Federal Election Commission, a Super PAC “cannot use its funds to make contributions directly, in-kind, or through coordinated communications to any federal candidate or committee.” While the Democratic National Committee is allowed to make coordinated expenditures with the new candidate, a Super PAC cannot make coordinated expenditures.
What about becoming a regular political action committee that can donate to candidates?
Biden could convert to a regular political action committee, subject to federal contribution and donation limits, but because Federal Election Commission rules require a six-month waiting period before the new PAC is eligible to donate at the higher level ($5,000 per election), it would then only be able to donate $3,300 to the new presidential candidate.
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Could Joe Biden simply retire and use all that money for his own personal use?
No. Federal law prohibits the personal use of campaign funds under 52 USC §30114. However, campaign committees can make charitable donations of any amount to any organization that meets the qualifications under 26 USC §170(c).
The future of President Joe Biden’s campaign has been in question since the presidential debate. (Getty Images)
The federal law includes “religious, charitable, scientific, literary and educational” institutions and foundations, which means that if Joe Biden wanted to transfer $91.5 million (after paying all remaining campaign expenses) to the Biden Center for Diplomacy and International Engagement at the University of Pennsylvania, he could.
It should also be noted that funds from the campaign committee retain their character as candidate funds until they are spent, and therefore cannot be used for “personal use” on Biden’s behalf.
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After all, Democratic officials face a looming deadline to certify their presidential candidate’s name to state election officials for inclusion on the general election ballot, plus the potential problem of not being able to spend any political donations the Biden campaign has raised unless Vice President Kamala Harris becomes their presidential nominee.
If the new candidate in line is someone else, it will be an entirely new situation on campaign finance issues, an area riddled with legal peril and arcane restrictions that Democrats and their left-leaning allies have insisted on and imposed on campaigns, candidates and parties for more than 50 years.
Click here to read more articles by Hans von Spakovsky
