Senators and House Members Can Keep Campaign Funds on the Way Out

March 26, 2010— -- Sen. Evan Bayh, D-Ind., dropped a political bombshell in February when he announced he would not seek re-election to another term. Among the biggest questions in the immediate aftermath: What would this mean for the Democrats?

Another big question: What would become of his $13 million campaign war chest?

Turns out that despite strict Federal Election Commission rules, Bayh and other exiting elected officials do have ways to keep unspent political contributions.

According to the Center for Responsive Politics, there are 25 senators and representatives this year who have announced their retirement and who are collectively sitting on $31 million in authorized campaign committee cash.

While the F.E.C. clearly says campaign committee cash can't be tapped for personal use, there are no such stipulations for certain political action committees, most controversially "leadership PACs" that elected officials can use to support various political causes other than their own.

Of the 25 members of Congress who have said they are stepping down, 18 have leadership PACs with a combined $850,000, according to CRP analysis.

"There's a wide gap, if not a gulf, between what lawmakers can do with regular campaign money versus leadership PAC money," said Dave Levinthal, communications director for the Washington, D.C.-based CRP. "The question comes up: What can politicians do with the leftover PAC money, and the answer is pretty much whatever they want."

Last March, the F.E.C. formally recommended to Congress that the loophole regarding personal use of leadership PAC money be eliminated, said Julia Queen, an F.E.C. spokeswoman. "Congress should amend [the F.E.C.'s] prohibition of the personal use of campaign funds to extend its reach to all political committees," the commission wrote.

In 2007, the Department of Justice reported "a dramatic rise in the number of cases in which candidates and campaign fiduciaries steal money that has been contributed to a candidate or political committee for the purpose of electing the candidate or the candidates supported by the political committee," according to the F.E.C.

There was a time, three decades ago, when elected officials could permissably tap unspent campaign funds for personal use after they left office. Starting in 1979, though, there have been continued efforts to outlaw unfettered personal spending of war chest money.

In 1989, Congress passed an Ethics Reform Act that was to close the door for good, repealling one last prior provision that allowed some funds to be tapped by lawmakers covered by a grandfather provision.