June 12, 2008
How Will Clinton Pay Off Her Debt?
Politico: At Her Disposal Are A Handful Of Accounting Options — Some Never Before Tried In Presidential Politics
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Life after the Clinton Campaign
Now that Hillary Clinton's presidential campaign has ended, the press, who have been following her since the beginning, has to find a new subject. Fernando Suarez has the story.
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Hillary's Run Makes History
Sen. Hillary Clinton's historic bid for the White House has left an indelible mark on presidential politics and paved the way for a female commander-in-chief. Harry Smith reports.
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Will Clinton Help Obama?
Howard Wolfson, Hillary Clinton's Communications Director, and Rep. Charles Rangel (D-N.Y.) discuss the former Democratic presidential candidate's next potential steps in her support for Barack Obama.
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To pay off her campaign debt, Hillary Clinton's has at her disposal a handful of accounting maneuvers -- some never before tried in presidential politics -- that would render her political debt practically insignificant. (AP Photo/Susan Walsh)
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Hillary Clinton
A look at a life and career full of firsts.
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Timeline
Democratic Campaign Trail
Notable events in the race for the 2008 Democratic presidential nomination.
Though Hillary Rodham Clinton racked up more than $30 million in debt during her Democratic primary campaign, she could emerge from her loss with a bundle of campaign cash to either play kingmaker or mount another campaign of her own.
At her disposal are a handful of accounting maneuvers - some never before tried in presidential politics - that would render her political debt practically insignificant, while at the same time freeing up $24 million in currently off-limits cash, according to interviews with her lawyer and outside campaign finance experts.
Enhancing her flexibility is that all but $1 million of her $9.5 million in unpaid bills at the end of April was owed to allies and political firms unlikely to cause her legal or political headaches by demanding prompt payment.
In fact, their assumed - but unspoken - cooperation is a key part of the New York senator’s most likely path to robust campaign finances.
That financial path would go something like this: Reclassify as a contribution most of the $11.4 million or more she loaned her campaign, which would be a personal financial hit because she wouldn’t be able to recoup much of it. Ask her donors to redirect $23.7 million they gave for her presidential general election campaign to her Senate campaign committee.
Meanwhile, try to raise some fast cash - possibly with assistance from her vanquisher, presumptive Democratic nominee Barack Obama - to pay off vendors who might sue her presidential campaign, leaving “friendly” debt to be paid down gradually as she raises money from her Senate perch.
A riskier route would be to ask her general election donors to redirect - or “redesignate,” in campaign finance parlance - their general election contributions to Obama’s presidential campaign as part of a deal under which the Illinois senator would ask his donors to give to Clinton to help her pay down her debt.
The most aggressive approach would be to redesignate the general election contributions to her Senate committee, transfer her debt to the same account, and then use the general election contributions to pay off the debt.
There’s a budding debate in the campaign finance bar about the legality of such of a maneuver. Some contend it would amount to illegally “laundering” general election contributions to pay off primary election bills. But others assert a 30-year-old Federal Election Commission decision regarding “surplus” campaign cash allows flexibility in the brave new world of privately financed presidential campaigns.
Clinton’s own campaign finance lawyer, Lyn Utrecht of Ryan, Phillips, Utrecht & MacKinnon, declined to discuss Clinton’s plans. But Utrecht’s legal analysis, set forth in e-mails to Politico this week, seems to suggest the campaign will take a cautious financial approach.
“The contributions to the presidential general election can’t be used to pay presidential primary debt, because those donors already maxed out to the presidential primary,” Utrecht wrote. She also asserted Clinton could not transfer her presidential debt to her Senate committee, an interpretation with which some election lawyers disagree.
But Utrecht said there’s nothing stopping Clinton from asking donors to redesignate their general election contributions to the Senate account.
There’s no precedent for that, however, because all previous major-party presidential nominees have participated in a public financing system that bars acceptance of general election contributions.
And there are conflicting opinions about whether Clinton can seek to redesignate general election cash to her Seate campaign.
Michael Toner, a former Federal Election Commission chairman who was the lawyer for Republican Fred Thompson’s aborted presidential campaign, and Paul Ryan, a lawyer for the Campaign Legal Center, agreed with Utrecht that Clinton can redesignate general election cash to her Senate campaign.
But others question the legality of such a maneuver. Craig Holman, a campaign finance lobbyist for Public Citizen, and Jason Torchinsky, a lawyer for the failed presidential bid of Republican Rudy Giuliani, both pointed to Connecticut Sen. Chris Dodd’s situation as potentially clearing or barring Clinton from steering general election cash to her Senate committee.
Dodd ended his own bid for the Democratic presidential nomination in January and has asked the FEC (which currently lacks the quorum needed to render official opinions) for permission to redesignate $1.7 million in general election contributions to his 2010 Senate campaign.
“If the FEC rules ‘no’ for Dodd, they would have to also invalidate it for Hillary Clinton,” said Holman, who called politicians’ ability to operate two or more campaign committees a “loophole.”
Utrecht said Dodd’s request is “irrelevant” because it pertains to his accepting public financing in the primary election, which Clinton declined.
If Utrecht is right, Clinton would have 60 days from the end of her campaign (it’s unclear if the clock started ticking when she suspended her campaign Saturday) to either return general contributions or ask donors to redesignate them to another campaign.
Redesignating cash between committees controlled by a candidate can be quick, since the money never actually has to change hands. But donors can also decline and instead request a refund. So there’s no guarantee donors would oblige if Clinton asks them to redesignate their contributions to Obama’s presidential campaign, instead of to her Senate campaign or even a potential Obama-Clinton joint campaign, unlikely though that is.
Clinton has until the end of the Democratic convention on Aug. 28 to pay back the $11.4 million or more she loaned her campaign. After that, the bulk of it would become a contribution, and repayment would be limited to $250,000 plus interest (her campaign reported owing $16,000 in interest to her at the end of April).
During the race, Clinton’s campaign indicated it would pay off vendor debts before her personal loans, but it also asserted she intended to repay her loans.
The latter transaction is looking increasingly unlikely. Still, the hit might not sting too badly, because Hillary and Bill Clinton have earned $111 million since leaving the White House.
As for the vendor debts, it’s common for big campaigns, particularly losing ones, to let unpaid bills linger, sometimes for years.
“I don’t think the debt is as big of an issue as the media seems to be making it out to be,” Torchinsky said. “Yes, it’s debt, but there are many campaigns that have carried debt for years without paying it back. Her debt has no effect on her future campaigns.”
Bill Clinton’s 1996 reelection campaign this year reported $219,000 in debts, though all of it was disputed. At the end of April, Giuliani’s presidential campaign owed $3.6 million, while Delaware Democratic Sen. Joe Biden’s owed $1.2 million.
There’s no deadline to pay back vendor debts. But campaigns have to be careful not to let debts stand for too long without paying interest or partial payments, lest they be considered illegal corporate contributions.
Firms that do a lot of work for campaigns understand that complaining to the press or suing over lingering bills are big no-nos sure to get them blacklited, said David Louis Plevan, an official with Electrum Productions. (http://www.electrumproductions.com/)
The company staged more than 500 events for Clinton’s campaign, including her Saturday concession speech at the National Building Museum, and was owed $193,000 at the end of April.
“You try to take as many precautions to protect yourself,” Plevan said, “but you have to be flexible with it.”
Among Clinton’s top creditors are the firms of a number of her inner-circle allies.
At the end of April, pollster and strategist Mark Penn’s firm was owed $4.8 million, ad-maker Mandy Grunwald’s was short $695,000, strategist Minyon Moore’s was due $216,000, Utrecht’s was owed $85,000 and lawyer Bob Barnett’s was due $25,000.
Moore and Barnett were among three Clinton liaisons reportedly set to meet this week in Chicago with Obama campaign representatives to discuss how the former adversaries could assist one another, including what Obama might do to help Clinton retire her debt.
Contribution limits bar Obama from giving Clinton more than the $2,300 maximum donation. So his main recourse would be appealing to his supporters to contribute to Clinton, and it’s not clear how they’ll respond after the brutal primary.
Cash for debt retirement is among the toughest money to raise in politics. But Clinton’s position in the Senate and as a party leader could make things easier. She’s reportedly hauled in $1 million since the final primaries last week.
As her campaign rounded the final bend with dwindling hopes of winning, campaign chairman Terry McAuliffe characterized the mounting debts as a cost of doing business.
“I’ve been involved in a lot of debt situations with the Clintons for a long time,” he told a handful of reporters late last month. “It’s never bothered us before, and it won’t bother us in the future.”
By Kenneth P. Vogel
Copyright 2008 POLITICO
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See all 98 CommentsI''m sorry things turned out for Hillary the way they turned out, although I never intended to vote for her. But, running for political office is like contracting for risky surgery. The Dr. and Hospital and other expenses have to be paid, even if the patient dies.
And so, Hillary, you and Bill liquidate some family assets and pay the debt.
I don''t understand why she didn''t STOP campaigning when she knew she was LOSING! To continue GOING FURTHER INTO DEBT was stupid and her own fault! If she thinks Obama''s supporters will help her out of this fix now, I would not bank on it since we HATED HER ATTACKS on him! see how this is true! If she owes "vendors" or small businesses and does NOT pay, no matter what future campaign, they will NOT do business with her again.
I know! She could start a website and for $1.99, she can tell all the salacious details of being married to der slick meister! :)
Great minds think alike! LOL
I''m sure Hillary will find every loophole there is and invent a few more along the way!
http://klintons.com
Jack at $5 a clack its going to take a long time LOL :-)
It was clear once Obama won 11 contests in a row that she had no chance left to win. She, selfishly, chose to continue to rack up millions of dollars in debt to keep herself in the news and build her national fame.
Why should the taxpayers pay these debts for her?
Makes sense to me.
Tax and spend. Tax and spend...
In short hide all the money in loop holes and tax breaks and... only for the elite that the rest of us would get a life sentence for.
What!? Fat chicks need love too, but they gotta pay!
SHE MIGHT HAVE TO SLOW HER DUNKIN DONUT APPETITE FOR A LITTLE WHILE UNTIL HE PILFERS SOME MORE.
HA-HA-HA!!
SHE LOST.
Why is this the TOP story on CBS''s political tab?
Let''s focus on real campaign issues and LEAVE HILLARY ALONE (I see a youtube video in the making).
SHE LOST.
Why is this the TOP story on CBS''''s political tab?
Let''''s focus on real campaign issues and LEAVE HILLARY ALONE (I see a youtube video in the making).
Posted by zoroeltoro at 03:01 PM : Jun 12, 2008
I tried to go to zoroeltoro.com to get my news information but got nothing. How about instead of bashing this news site, start one of your own & we''ll see how well you do.
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Posted by cryhavoc2 at 03:03 PM : Jun 12, 2008
Arf!Arf! ;)
Posted by cryhavoc2 at 03:03 PM : Jun 12, 2008
With the cash & life style the Clinton''s enjoy, 95% of Americans would love to be as "down" as the Clintons.
Oh yea, they''re suffering.
Tupperware partys?
Avon?
Candle-Lite Partys?
Posted by dmw1167
She will have to wait until a Republican wins the Whitehouse again, that could be decades.
WELL LETS DOUBLE IT AND GIVE HER EVERY THING SHE WASTED AS A REPUBLICAN DISTRACTION EXERCISE!!
LETS GIVE HER 51% OF DUNKIN DONUTS WHILE WERE AT IT!!
ANYTHING FOR THE PETITE SIZE 25 WHO LIKES ROUGH VULGAR WOMEN FOR APPETIZERS!!
Posted by dmw1167"
Uh huh...run for his THIRD term, right...you''re not from around here are you.
Why just pick up the Wall Street Journel and trade futures. Remeber? She made $100k in a day she''s so good at it.
You mean something like . . .
Honest bookkeeping?
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Posted by Questionnews at 04:56 PM : Jun 12, 2008
ACTUALLY SHE''D BE LEFT WITH 80 MILLION.
"How Will Clinton Pay Off Her Debt?"
*** HERSELF OUT??
When I look at John McCain, I see that he admittedly is not knowledgeable about the Economy. What I do know is that John McCain wants the Republican Spending, Spending, Spending on the War in Iraq to continue longer than I do. The economy will not get any better until we stop throwing our money in the deep black hole of the Iraq War. After 8 years of Republican leadership our country is NINE TRILLION IN DEBT.
When I look at John McCain, I see a man with a plethora of health problems who has yet to pick a running mate. It is very possible that Senator McCain''s running mate will be come President. McCain could have a heart attack or stroke at any time. To me, the choice of his running mate will be extremely important.
When I look at John McCain, I see a man deeply anti-abortion and it makes me wonder, what John McCain thinks about stem cell research.
As between Senator Obama and Senator McCain, I believe Senator Obama is the least lousy solution. Sometimes in politics, that is the best you can get.
AND IN 2012, I''LL BE A HILLARY SUPPORTER AGAIN IN THE PRIMARY ONLY.
HILLARY KNOWS HOW TO STEAL MONEY FROM THE GOVERNMENT REAL GOOD FOR REPUBLICANS, WITHOUT EVEN SAYING 3 COHERENT SENTENCES IN A ROW.
SHE MAY BE MCCAINS VP CANDIDATE THIS TERM. GW BUSH IS KICKING IN 1/2 MILLION DOLLARS A DAY FOR THAT LOSING CANDIDACY. WAY TO GO HILLARY!!
1, No on Equal Pay for women
2. No on Family & Medical Leave
3. No on Prevention of Unintended Teen Pregnancies
4. No on Abstinence Only Programs be medically accurate and scientifically based.
5. No on opposed Title X, the nation''s family planning program.
6. No on requiring insurance coverage of prescription birth control
7. No on comprehensive *** education
8. No on repealing the "global gag rule."
9. Yes on overturning Roe v. Wade
I here the Gap is hiring floor help..........
Tupperware partys?
Avon?
Candle-Lite Partys?
Posted by ianlou at 04:21 PM : Jun 12, 2008
Phone se*x operator?
Bake sale?
Bikini car wash?
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Posted by SgtRDS-E4 at 07:48 PM : Jun 12, 2008
-DryWashing is not for cars! I guess.
Posted by HARDBALL222 at 07:10 PM : Jun 12, 2008
TRANSLATION: I''M STILL AN IDIOT, UNTIL THE GENERAL ELECTION, AND THEN I''LL BE AN EVEN BIGGER IDIOT.
Speed bump?
S and M Mistress?
Banana spider hunter?
Pantsuit tester?
Stripper?
Banana spider hunter?
Pantsuit tester?
Stripper?
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Posted by SgtRDS-E4 at 08:15 PM : Jun 12, 2008
Hummer salesman?
Mohel?
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