Stuff You Should Know - Short Stuff: Unspent Campaign Money

Episode Date: April 3, 2019

Have you ever wondered what happens to all those campaign donations when a political campaign goes belly up? Or, even worse, is in debt! Wonder no more! Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

On the podcast, Hey Dude, the 90s called, David Lasher and Christine Taylor, stars of the cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're gonna use Hey Dude as our jumping off point, but we are going to unpack and dive back into the decade of the 90s.

We lived it, and now we're calling on all of our friends to come back and relive it. Listen to Hey Dude, the 90s called on the iHeart radio app, Apple Podcasts, or wherever you get your podcasts. Hey, and welcome to the short stuff. I'm Josh Clark. There's Charles W. Chuck Bryant.

There's Jerry over there. So this is short stuff from Stuff You Should Know, short edition about campaign money. Yeah. Dirty money. I think we've done some, we've dabbled around this topic before, but this is a little shorty question answered. Yeah. It's based on a How Stuff Works article

we should call out. But like I've always kind of wondered this, but didn't realize I'd wondered it. Cause I think if I had actually wondered it, I would have just gone and researched it and found out, you know, the answer. But it was like in the back of my head, like one of those questions I didn't know

I wanted to know the answer to until I saw the question. You know what I mean? Well, yeah. And I know that I've donated to political campaigns and then never said, hey, wait a minute, you lost. Did you spend my money? Right. But did it, it didn't cross your mind.

I know you never said it, but did you ever think like, did my money get spent? I just assumed that it got spent five seconds after I hit the click button, you know? I think that's frequently the case, but it is possible every once in a while that a candidate becomes so popular and raises so much money,

but then that popularity and that war chest of campaign money is disproportionate to their actual chance of becoming the nominee for the party. Case and point was Jeb Bush in the 2016 election. Oh, Jeb, he raised a lot of dough and did not, you know, I'm not sure if like the, if there's an equation for money spent and chances of winning,

which they're supposedly is, he bucked that trend. He really did. He had, I think he raised something like $152 million, $152 million, which was far and away the most of all the Republican nominees that primary season and did not get it. And that is really unusual, but the reason we're mentioning this

is because he had so much money, he got caught with some leftover and that's fine. Like that's not the end of the world, but it does raise that question. If you have millions and millions of dollars of campaign contributions and you didn't make it to the general election, what happens to all that money?

Yeah, I mean, and it kind of depends. And, you know, when you say being caught, that doesn't mean that he did anything wrong aside from, I guess, doing everything wrong to not win. But it's not like he was caught doing something bad. He was just, you know, he lost early enough to where there was a, you know, millions and millions and millions of dollars left over.

And what happens to that money, it kind of depends on where it comes from. Right, so there, now that the Supreme Court has completely ruined democracy with the Citizens United case, there are two main groups that can be funneling money toward a particular candidate's candidacy. There's the candidate, him or herself, in their campaign.

And then there's also super PACs, political action committees. And there used to be political action committees, but now they're on steroids because they can raise unlimited funds and spend unlimited funds to help a candidate so long as the super PAC and the candidate aren't coordinating how that money is spent.

They're just there to support the candidate and ideally on paper, I should say. Yeah, and earlier when I said, you know, if I gave, as in just an independent schmo, money to a candidate, it is probably likely that that money is burned through pretty quickly. This, these personal contributions,

I get the idea that they kind of spin that stuff because, you know, and it points out in this article, if it's like kind of now or never, if you're not, you're just not like, you're holding on to that stuff for a rainy day, you're trying to win an election. And one way to do that is by spending tons of dough. So that's called like cash on hand, right?

That's when like you, Chuck, wrote a check to Jeb Bush and said, go Jeb in like the memo. And Jeb's campaign went and cash that money and put it in their account. That's cash on hand. Yeah, they burn through that very, very, very frequently. But there's also like a constant flow of money coming in over time

and their campaign may stop as that money's still coming in. So the question remains, like what does Jeb Bush's campaign do with that? And there's actual rules for what they can do and can't do with it. Really the main rule is that after Jeb Bush drops out of the race or doesn't get chosen as the party's nominee for the general election,

he doesn't get to just be like, thanks for the $100 million, Chumps, I'm gonna go buy a yacht. That's basically the only rule that the FEC has. Well, one of a few rules, but that's the big one. Yes, no yachts. Right, the no yachts clause. Yeah, it's basically you can't spend anything

on your personal expenses. Right. And why don't we take a break and we're gonna come back and talk about some other FEC rules right after this. On the podcast, Hey Dude, the 90s called David Lasher and Christine Taylor, stars of the cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're going to use Hey Dude as our jumping off point, but we are going to unpack and

dive back into the decade of the 90s. We lived it, and now we're calling on all of our friends to come back and relive it. It's a podcast packed with interviews, co-stars, friends, and non-stop references to the best decade ever. Do you remember going to Blockbuster? Do you remember Nintendo 64? Do you remember getting frosted tips? Was that a cereal?

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Listen to Frosted Tips with Lance Bass on the iHeart radio app, Apple podcast or wherever you listen to podcasts. All right. So you can't spend that stuff on yourself. You can't say like, geez, I'm raised all this money. I'd love to pay off my mortgage while I'm at it. That's kind of like the main thing. There are things you can do.

They're called permissible uses. You can donate that money to charity, which would be kind of nice, I think. Sure. Especially if it's like a nice charity, everybody can get behind like the savepuppies.org or something like that. Yeah, exactly. This is the one I don't quite get it says, because we pull from two sources. One says, you can just donate it to another candidate, but I think that's limited to $2,000

if it's just a personal donation, but you can, can you transfer everything to like a pack? I believe so. I think the thing that was wrong here is that the person didn't say, the person from opensecrets.org didn't say that they can give it to another candidate up to two grand. They can give the whole thing to the party or yeah, they can transfer it to a super pack. So the candidate can apparently take that money and give it to a super pack, but a super pack can't give their money to a candidate.

But the impression that I have is that that super pack would have to spend that money on that candidate either in a future election or if the candidate also is like, well, I'm just going to run for Senate instead. They would be, that super pack could fund that candidate's campaigns no matter what kind of election they were running for. Right. And it's also highly likely that there's an understanding that if a pack or super pack donates a ton of money and that candidate loses or is out, especially if they're out

early on, then there's like a, hey, you give that back to us now. Yeah, especially with a super pack because super packs from the impression I have from researching this are basically like a handful of extraordinarily wealthy billionaires who are saying, yeah, this is our guy. We want to back this person for their presidential campaign. And then if it doesn't work, they get their money back eventually that was unspent. That happened with Rick Perry. He got, I think he had like $13 million in unspent funds, which that was his super pack.

And the reason that they knew that he didn't even make it to the primaries and the big disparity between Rick Perry's campaign and super pack was that he couldn't raise more than like a million, a million and a half dollars. His campaign couldn't, which is bad news for your campaign. His pack raised a bunch of money because there were a couple of billionaires in Dallas who were basically funding the pack. So when it came down to the wheels hitting the pavement and Rick Perry's campaign couldn't raise that kind of money, he knew it was time to get out and his super pack contributors

got their money back. And then, you know, how I was talking about people spending, like a lot of times a candidate will actually be in debt. So like not only do they spend, Scott Walker is a good example of this, Wisconsin governor. He, when he dropped out in September 2015, he had a million dollars in debts. So he burned through that money. So it's not like that was anyone he could, there was no money to return. Yeah.

And that's the thing, man. So like you can be in debt, your campaign can be in debt. And if you're wealthy, that's okay. There's ways for you to make that money back to retire that debt. You can create fundraisers over time, but that's really difficult to get people to contribute to your campaign that's already lost so that you can retire debt. But if you're not wealthy, you might have taken out like personal loans along the way from banks.

Right. And that means that you, the candidate, have personal loan obligations for the rest of your life from this campaign that was unsuccessful. So it can be really nerve wracking to run for office and not win or not become the nominee because if you are in debt, you can get caught with that and it gets written off. Getting over $250,000 that you loan to your campaign gets written off as a donation. It's gone forever after 20 days after the election. Yeah.

And in the case of like a Donald Trump, or I guess rather anyone in the first term of what they hope is going to be a two-term fair, if you've just got all this money raised and then you didn't spend it, your campaign is still an entity. It's still an ongoing entity. It's not like they dissolve that while you're in office and then you have to restart at the end of your term again. Like he just basically, like anyone would, keep that money in the coffers for the second term's campaign.

So that's what happens to the unspent money. It just evaporates if you really want to think about it. And thank you for joining us on Short Stuff. We'll see you next time. For more on this and thousands of other topics, visit HowStuffWorks.com.