Buzz
As of February 2020, over 1000 people had entered the race for the U.S. presidency, though only a small number of their names are widely recognized. As Election Day approaches and state primaries narrow down the contenders, several high-profile candidates will drop out of the race. But what happens to their unused campaign funds when they exit?
One thing is certain: disgruntled candidates can't simply use the remaining funds to buy a luxury yacht and sail off into the sunset. The Federal Election Commission imposes strict regulations on how leftover campaign funds can be used. The primary rule is that these funds cannot be used for personal purposes.
Campaign committees have several options for handling leftover funds: they can donate them to charitable organizations or political parties, contribute up to $2000 per election to other candidates, or keep the funds in reserve for a potential future campaign. However, these rules do not apply to super PACs, which have only been active for three elections, and there are no specific guidelines for how they must handle remaining funds, other than the prohibition on using them for another federal candidate. Typically, super PACs return the money to donors, use it to wind down the failed campaign, or donate it to support state-level candidates. The general goal is to ensure that all of the funds are spent.
Running a campaign is costly—Barack Obama spent nearly $750 million on his 2008 White House campaign, and in 2012, he spent $985 million on reelection, while his opponent Mitt Romney spent $992 million. Often, a lack of funds is the reason campaigns fail.
As for victorious (or sometimes defeated) politicians, they often allocate leftover campaign funds for their next race. If they decide not to run, they must follow the same FEC regulations. Wonder why this rule exists? Before 1993, U.S. Representatives who were elected before January 8, 1980, could keep any unspent campaign funds when they retired. However, a study revealed that a third of Congress members used these funds for personal expenses like clothing, jewelry, artwork, travel, and dry cleaning. This caused embarrassment, and Congress passed a law prohibiting this practice for the House, as the Senate already had regulations in place to prevent such misuse.
In practice, however, officials often find ways to still put those funds to use (and state laws may differ from federal ones). For instance, after Chris Christie was reelected as New Jersey's governor in 2014, his campaign received approval to use some of its leftover funds to cover the legal expenses he faced due to the Bridgegate scandal. This was even before he spent $26.7 million on his unsuccessful 2016 presidential bid.
An earlier version of this article originally ran in 2012.
