On July 21, President Biden exited the presidential race, leaving uncertainty about what will happen to his campaign funds, totaling $232,436,391.
While it might seem possible for him to transfer these funds to another candidate, doing so would breach donor trust and violate Federal Election Commission (FEC) regulations. The FEC permits a federal candidate committee to contribute no more than $2,000 per election to another candidate’s committee.
Furthermore, there is no new candidate yet. Biden has endorsed Kamala Harris, but his endorsement does not automatically make her the party’s new candidate.
The Democratic National Committee (DNC) is set to start virtual voting from August 1 to August 7. This process was initially intended to conclude with Biden’s official nomination before his recent withdrawal.
By withdrawing at this late stage, Biden has significantly disadvantaged other candidates, who now have just 10 days to secure funding and launch their campaigns for the nomination.
Alternatively, the DNC could rescind their decision to start virtual nominations on August 1, giving candidates more time until the convention on August 19.
With Biden out of the race, the Democrats will need to hold an open convention to select their nominee. Delegates who were previously committed to voting for Biden are now free to support any candidate of their choice.
In some states, candidates must secure their spots on the ballot by as early as August 7. Biden’s late exit leaves the new nominee with only three months to raise funds and campaign against Trump, who, despite being widely criticized by the left, is arguably one of the most recognized figures in the world.
That said, let’s get back to the money.
Campaign funds must first be used to pay off any outstanding debts. Once those debts are cleared, any remaining funds can be refunded to donors or used for allowable activities, such as charitable donations or transfers to party committees, within legal limits.
The legal loophole in the Biden campaign is that the money was officially given to the Biden-Harris team. Technically, this means Harris could use the funds for her own campaign.
Legal scholars have noted that due to this loophole, despite the switch to Kamala, donors could only get their money back if the party agreed.
If Kamala drops out or fails to secure the nomination, the funds could be transferred to the DNC, but these funds cannot be used directly to support a new candidate’s campaign.
The DNC can use the funds for general party activities, including promoting the party’s platform, conducting voter outreach, and supporting various candidates. However, they are not allowed to transfer the funds directly to another candidate’s campaign committee.
So, while it may be legal to pass the donor money on to Harris, this raises serious ethical issues. Donors who contributed to Biden’s campaign did so with the intent to support his candidacy.
Automatically transferring these funds to another candidate, even with an endorsement, may not align with the donors’ original intent, especially if they do not support Harris. This action could undermine donor trust and lead to long-term damage to the party’s credibility.
Ethical considerations require transparency and donor consent. Ideally, donors should be informed and given the choice to approve the transfer of their contributions to another candidate or to receive a refund. This approach honors donor intent and upholds ethical standards.
Maintaining trust and integrity is vital in political fundraising. Misusing funds in ways donors did not intend can damage the trust between candidates and their supporters, potentially harming the party’s credibility in the long run.
Campaigns should openly communicate with donors about any changes and offer options for refunds or the reallocation of their contributions.
Biden’s late departure will make it difficult, but not impossible, for anyone other than Kamala to get the nomination. The fact that Kamala can legally access the funds may sway some delegates to vote for her, since her campaign already has substantial funding.
Additionally, Democrats who questioned Biden’s mental fitness for another term never demanded his resignation. Meanwhile, his supporters argued that Biden was the best candidate and the only one capable of saving democracy.
Suddenly, they are fully backing Kamala, hailing Biden’s withdrawal as an act of patriotism. If they previously believed he was the only hope for saving democracy, shouldn’t they be upset with him for dropping out?
In a huge twist of irony, the same people who told us last week that age doesn’t matter are now saying Trump is too old. These people just blow with the wind, with no convictions except for the fact that they hate Trump.
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