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Wrinkle...
| quote: | Clinton Deadline Looms for Recouping $11 Million Personal Loan
2008-05-12 00:01 (New York)
By Jonathan D. Salant and Timothy J. Burger
May 12 (Bloomberg) -- Hillary Clinton may have a financial
incentive to remain in the presidential race for a while. And
she has Senator John McCain to thank for it.
Clinton loaned her struggling campaign $11 million in
recent months. A little-known provision of a 2002 campaign-
finance law cosponsored by McCain prevents candidates who drop
out of the race from raising money after the nominating
conventions to repay themselves for personal loans.
Should Clinton fail to come up with the funds by the
Democratic convention in August, she'll be out the $11 million.
If she quits the campaign before then, she may find it hard to
get people to keep giving cash just so she can retire her debt.
That may ratchet up pressure on Clinton to cut a deal with
rival Barack Obama to help her through his supporters. Obama may
oblige since he would love to get her out of the race for the
nomination so he could focus on the general election.
``Helping to pay off the debt would certainly be a clear
signal of Obama's desire to bring the two candidates together,''
said Anthony Corrado, a professor of government at Colby College
in Waterville, Maine.
Obama, 46, is keeping the door open to the possibility of
helping pay her debt, which includes more than $10 million in
unpaid bills to vendors and consultants -- including strategist
Mark Penn, who remains a flash point of criticism for backing a
trade deal she opposed.
`On the Team'
In the interest of unifying the party, Obama will seek ``a
broad-ranging discussion with Senator Clinton about how I could
make her feel good about the process and have her on the team,''
he told reporters in Oregon on May 9.
Clinton spokesman Howard Wolfson said ``there have been no
discussions along those lines'' and ``no contemplation of it.''
In the past, victorious candidates have helped their
vanquished opponents pay off campaign debts. Supporters of
Clinton, 60, aided former Iowa Governor Tom Vilsack after he
dropped out of the race last year. And McCain's backers gave to
Kansas Senator Sam Brownback, a failed Republican contender.
There is one sleight-of-hand -- though legal -- tactic
Clinton could use to pay off debts to others, though not to
herself.
Through March 31, she had collected $23 million in
donations designated for the general election.
Redirect Contributions
She could ask those donors to redirect the contributions
toward her 2012 Senate re-election campaign rather than the 2008
presidential race, said Kenneth Gross, a former Federal Election
Commission lawyer now at Skadden, Arps, Slate, Meagher & Flom
LLP. The Senate campaign could then pay off the current debt to
vendors and consultants, including Penn, to whom she owed $4.5
million through March 31.
In the past, such donations could have also gone to pay
back a candidate's personal loans. The 2002 law, which banned
corporate, union and unlimited individual contributions to
campaigns, put a stop to that. It limited such repayments to
$250,000.
``She has between now and the convention to raise money to
retire the loan or else she will have made an $11 million
contribution to her campaign,'' former Federal Election
Commission Chairman Michael Toner said.
Federal election law prohibits Obama from directly aiding
Clinton through his campaign war chest; nothing stops him from
asking his donors to do so.
Obama Donors
Yet while Obama has mostly relied on smaller contributors
to fuel his record-setting fundraising, he's unlikely to ask
them to shell out any money for Clinton, who together with her
husband earned $109 million from 2000 through 2007. And many of
those donors are unlikely to be willing to help her after this
hard-fought campaign.
Democratic consultant Peter Fenn, who is neutral in the
race, said Obama will need to call upon those donors for the
general election should he decide not to take public funding for
the campaign, or to give to the Democratic Party if he does.
``They're very loyal Obama people,'' Fenn said. ``You're
not going to raise that much money from those people for
Hillary.''
More probable sources of financial help for Clinton would
be those who have given the maximum $2,300 to Obama's campaign,
said Democratic consultant Erik Smith.
``Few campaigns would mobilize their grassroots supporters
for something like this, and Obama certainly wouldn't,'' said
Smith, an adviser to Richard Gephardt's 2004 presidential race.
``The most likely scenario would be that some of Obama's largest
donors would work discreetly and independently of the campaign
to raise money.'' |
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