What presidential losers do with millions in unspent campaign cash

There’s millions in campaign cash out there, sitting in limbo without a presidential campaign to call home.

It’s the money raised by candidates such as Sens. Bernie Sanders, a Vermont independent, and Ted Cruz, R-Texas, who did not win their party nominations, and left behind when they had to drop out.

So what happens to it? Can the candidate use it to buy a beach house? Give it to Hillary Clinton or Donald Trump? Or use it for another campaign themselves?

“My suspicion is that some of them are sitting on the money,” said Larry Noble, former chief counsel of the Federal Election Commission and general counsel for the Campaign Legal Center.

Any presidential loser with money left in the bank can use it for a future bid for office, donate it to a charity or political party, or contribute it to another candidate.

Cruz transferred nearly $3 million from his presidential campaign to his Senate campaign committee. Sanders used leftover money to send delegates to the Democratic National Convention in late July.

“They can also use it to wind down political operations,” said Viveca Novak, editorial and communications director at the Center for Responsive Politics.

Sanders has by far the most money in the bank of the defeated candidates – more than $6 million as of July 31. Despite conceding to Hillary Clinton early in the month, Sanders raised more than $1.1 million from July 1 to 31, FEC records show.

While Sanders can “go out and speak for other candidates” such as Clinton, Noble said, he cannot simply transfer his campaign war chest to the Democratic nominee’s account.

While some candidates end up with cash left over, many run into debt by the time they choose to drop out of the race.

Jeb Bush, Rand Paul, Marco Rubio and Scott Walker all racked up debt since halting their presidential bids, although all except Bush are currently holding office, which makes it easier to raise funds.

“They can try to raise contributions after they dropped out, but that’s very hard to do,” Noble said. “What a lot of them do is carry the debt, and if they decide to run for another federal office they transfer the debt.”

Clinton had nearly $25 million in debt after her failed presidential run in 2008. That sum was paid off in 2013, about 18 months before she formally declared her candidacy for 2016. Another presidential loser, Republican Newt Gingrich, will never pay $4.6 million in debt from his 2012 campaign. Gingrich will not face any civil or criminal action for stiffing businesses that provided services to his campaign like yard signs and phone-banking.

“It’s a rough situation for vendors,” Noble said. “If you have a losing campaign you may not get paid.”

None of the 2016 candidates has as much debt as Clinton or Gingrich.

Campaign committees are unable to accept contributions from super PACs, political entities that can raise unlimited amounts of money from well-heeled donors, to cancel their debts. That leaves millions of dollars floating around without any candidate to support.

Jeb Bush’s super PAC, Right to Rise, had over $3 million left in the bank as of July 31. It wouldn’t be against the law for Bush’s super PAC to throw a $3 million party for itself, but then the PAC’s founders would have to face the wrath of donors.

“Some of them probably sit on the money,” Noble said. “They cannot give money to federal candidates but can give to state candidates. In some circumstances they can give it to other party committees or they can keep the money in the super PAC.”

For example, Rubio’s presidential super PAC transferred $800,000 – and most of its staff – to a separate super PAC supporting his last-minute Senate bid in July.

In addition to Bush’s super PAC, two super PACs supporting Paul have over $2 million combined and seven other super PACs supporting other presidential also-rans each have at least six figures to spend.

Due to the rancor of the Republican primaries and candidates like Bush publicly saying they won’t support nominee Trump, Noble said that lots of super PAC money would sit around until the next election cycle, or go to super PACs not affiliated with the presidential race.

Vanquished candidate committees and their associated super PACs have one other option for unspent campaign donations.

“They can always return it to the donors,” Noble said.

This story was originally published September 14, 2016 at 7:00 AM with the headline "What presidential losers do with millions in unspent campaign cash."