Repaying campaign debt hard for losing side
WASHINGTON -- Hillary Rodham Clinton faces some tough choices on erasing more than $20 million in campaign debts if she doesn't become the Democratic Party's presidential nominee.
Clinton had $10 million in unpaid bills — ranging from consultants' fees to catering costs — at the end of March. The New York senator also has loaned her struggling campaign more than $11 million.
"The problem is: Who wants to give money to a candidate who's not the nominee?" said Dennis Johnson, who teaches political management at George Washington University.
Campaign-finance experts say her key could be rival Barack Obama, who has shattered fundraising records as he has collected contributions from more than 1.5 million donors.
"It's not atypical for a winning candidate to assist financially in relieving some of the opposing campaign's debt," said Anthony Corrado, a campaign-finance expert at Colby College in Maine who is not affiliated with a campaign. "I would expect Sen. Obama to extend support."
Federal law bars Obama from transferring millions from his campaign coffers to Clinton's, but he "could point his donors toward her or headline a fundraiser on her behalf," said Michael Toner, a former chairman of the Federal Election Commission. For instance, dozens of Clinton's contributors donated money to help former Iowa governor Tom Vilsack reduce the debt he incurred before he dropped out of the Democratic presidential race in February 2007, citing money woes. Vilsack endorsed Clinton.
Another option open to Clinton: She could transfer $23 million she collected for the general election to her Senate campaign account, as long as the donors to her presidential race agree. Clinton, who is up for Senate re-election in 2012, then could use the Senate funds to help repay her presidential debts.
Clinton's aides have said that any talk of how to pay her outstanding bills is premature.
"When she's the nominee, we'll be in a position to retire our own debt," Clinton spokesman Howard Wolfson said on Fox News Sunday.
Clinton "hasn't asked for help, and we haven't offered," Obama campaign strategist David Axelrod said.
A 2002 campaign-finance law bars candidates who drop out of the presidential race from collecting more than $250,000 after their party's conventions to recoup personal loans.
If Clinton doesn't raise the cash by the time Democrats meet Aug. 25-28 in Denver, her $11 million in campaign loans could become donations to her campaign.
Tax records show she and her husband, former president Bill Clinton, earned about $109 million in the past eight years.
Another wealthy candidate, Republican Mitt Romney, is poised to convert his presidential campaign loan into a contribution.
The former Massachusetts governor, who is worth between $190 million to $250 million, loaned his campaign more than $42 million before dropping out of the race in February.
"His focus right now is not on retiring his debt, but on raising money for other Republicans," spokesman Eric Fehrnstrom said. Those efforts include a May 28 fundraiser at Romney's Utah vacation home to benefit the Republican National Committee and the party's presumptive nominee, John McCain.
Paying bills is the not-so-glamorous underside of running for the presidency, and some campaigns never quite finish the job.
Federal campaign-finance laws don't set a deadline for paying off the bills owed to others.
Former astronaut and Ohio senator John Glenn, for example, spent 22 years trying unsuccessfully to raise enough money to pay off bank loans and other debts from his 1984 campaign for the Democratic presidential nomination.
"It's very difficult to raise money to pay bills that are past due rather than raising money for the campaign ahead," Corrado said. "It's the difference between saying, 'Help us pay for television ads that we are going to run in Pennsylvania' vs. 'We still need to pay off a party supply store in Iowa.' "
Contributing: Associated Press