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Politicians’ $100M Private Slush Funds

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Politicians’ $100M Private Slush Funds
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Politicians’ $100M Private Slush Funds

As Sen. Evan Bayh prepared to quit Congress, he called on all Americans to embrace a “spirit of devotion to the national welfare beyond party or self-interest” and declared his “passion for service to our fellow citizens is undiminished.”

Four years later, the Indiana Democrat controls nearly $10 million in surplus campaign cash he could, by law, invest in charities—something other former politicos have done.

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Instead, his old campaign money generates thousands of dollars in interest each week while sitting (PDF) in a Raymond James & Associates investment account.

Bayh, in this regard, is hardly alone.

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Nine former congressional members and congressional candidates who are no longer seeking federal office each retain $1 million or more in leftover campaign cash, a Center for Public Integrity analysis of federal campaign finance disclosures and Center for Responsive Politics data indicates.

Dozens of other former members and congressional also-rans, both Democrats and Republicans, are squatting on six-figure surpluses.

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The former congressional candidates have several options for their accumulated campaign cash, and no law requires them to divest of this money even close down their committees.

But their collective hoard is now approaching $100 million at a time when numerous charitable organizations could surely use some of it.

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For example, a fraction of that amount—$1 million—could feed 12,000 Syrian refugees for a month, by Oxfam America’s estimate.

“Fairly transformative” is how Janet Baker, vice president of development for Keep Indianapolis Beautiful, described what $1 million from Bayh or any other former politico could do for her $3.5 million-per-year charity that spruces up neighborhoods, plants trees and runs youth programs

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“Donating surplus money of this nature to a credible, charitable organization only makes sense,” said Randi K. Law, a spokeswoman for Veterans of Foreign Wars. “Unused funds, sitting idle, do nothing to perpetuate the cycle of support that America relies on.”

Added Joyce Raezer, executive director of the National Military Family Association: “The congressmen, they could have a huge impact. Their money would be direct support that has immediate benefit.”

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The former politicians offer a variety of reasons for idling their campaign riches instead of giving them away.

Bayh, who today works as an adviser at law and lobbying firm McGuireWoods and asset management firm Apollo Global Management, alluded to re-entering electoral politics, although he has no current plans to do so.

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His campaign account expenditures (PDF) during the year’s first three months primarily went toward political consulting fees, taxes, computer software and a “Christmas card mailing.” He made a $2,000 contribution to the re-election campaign of Sen. Mark Begich, D-Alaska.

“Because the future is difficult to predict, I don’t want to foreclose any possibilities at this time,” Bayh said by email.

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Same goes for former Rep. Mark Foley, R-Fla., who resigned in 2006 after he was found sending sexually explicit messages to a congressional page.

Now a lobbyist and political consultant whose clients include the Washington Nationals baseball team, Foley says he has “no immediate plans” to run for Congress again but has learned to “never slam a door on the future.”

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He’s made some charitable contributions in recent years from unused campaign funds—$10,000 last year to the Compass Gay & Lesbian Community Center in Florida, for one—and has more than $1.26 million remaining as of March 31.

“After the resignation, I would have given it slim odds that I’d ever run again,” he said. “But I’ve had people tell me since, ‘Your public service was sterling aside from a bump in the road.’ There’s no easy answer, although I’m going to be 60 this year, so any decision I make would be in a reasonable, short period of time.”

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Former Rep. Bart Gordon, D-Tenn., who left office in 2011, has more than $626,000 remaining in his still-technically-active campaign account.

In a phone interview, Gordon, now a lobbyist at the K&L Gates firm, categorically ruled out running for elected office again. He joked that after 26 years, “my wife feels like it’s been enough.”

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What will he do with his remaining campaign stash, then?

“I really don’t have any game plan for it,” he said.

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Nor does former Sen. Ken Salazar, D-Colo., who also served as President Barack Obama’s Secretary of the Department of the Interior from 2009 to 2013. His Senate campaign account had nearly $1.3 million in it as of March 31.

“He just doesn’t have any plans at this time for it,” Salazar’s longtime aide, Ken Lane, said of the campaign money.

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Former Rep. Joseph Kennedy II, a Massachusetts Democrat who hasn’t served in Congress in 15 years, has almost $2.6 million remaining in his “Citizens for Joe Kennedy 1988” campaign account, as of March 31.

In recent years, his leftover campaign money has grown in value thanks in part to dividends, interest and changes in market values in the Goldman Sachs investment accounts in which it lies. In mid-1999, the year he left office, his campaign account was worth about $1.86 million (PDF).

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Kennedy did not return messages seeking comment, nor did his campaign committee’s treasurer.

Other notable ex-congressmen with large campaign surpluses as of March 31 include Sens. Max Baucus (PDF), D-Mont. ($1.97 million) and Reps. Jerry Costello, D-Ill. ($1.38 million) and Jim Turner, D-Texas ($972,843).

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Ex-candidates cannot spend unused campaign money on themselves.

Federal Election Commission regulations (PDF) prohibit “using campaign funds for personal use,” and they specifically name mortgages, rent, tuition, country club dues, household supplies and most clothing among a litany of no-nos. They’re also barred from giving the money to friends and relatives, unless they’re doing bona fide, market-value work for the campaign committee.

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But in addition to donating excess campaign money to charity, former congressmen have several options (PDF) for spending their campaign cash once they’ve run their final campaign. Among them:

They can also hang on to the cash for future political runs—or just leave it in the bank to collect interest.

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Former Rep. Marty Meehan, D-Mass., is mixing several approaches.

So far this year, he’s made a handful of political and charitable contributions through his campaign account. Together, they totaled $18,500, with the bulk—$10,000—helping fund (PDF) an archive collection for former Rep. Barney Frank, D-Mass. The Urban League of Springfield in Massachusetts received $5,000.

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But Meehan, now the chancellor of the University of Massachusetts Lowell, still reported nearly $4.6 million remaining in his campaign coffer, even though he’s been out of Congress for seven-plus years. That’s more money than any other former U.S. House member, and second behind Bayh among all ex-congressmen.

The longer he’s out of politics, the less likely it is he’ll ever run again, Meehan said, although he hasn’t completely ruled out seeking elected office.

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“I do get hundreds of requests each year from charities, political organizations,” Meehan said. “Part of me wonders if I should put it into a charitable account.”

That’s what Frank did, at least in part. The longtime congressman, who retired from Congress in 2013, officially terminated (PDF) his campaign committee in January and donated the last of its cash—$8,698—to the University of Massachusetts Dartmouth. He had given away tens of thousands of dollars to other political committees and charities during the months after announcing he wouldn’t seek re-election.

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Same scenario for former Rep. Norm Dicks, D-Wash., who made a series of small donations to several charities—and one big one worth $25,000 to the University of Washington athletics department—in 2011 and 2012 before retiring from Congress last year. He also divested campaign cash by transferring it to other political committees, including the Washington State Democratic Central Committee, which received $20,000 from Dicks’ campaign in late 2012.

Some former members donate extra campaign cash to their own nonprofit organizations. Such is the case with ex-Rep. Allen West, R-Fla., who last year directed hundreds of thousands of campaign dollars to the Allen West Foundation, which West says is dedicated to training and educating conservative candidates who are minorities or have military backgrounds.

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For ex-congressional candidates considering donating to charities, Sandra Miniutti, vice president of nonprofit evaluation service Charity Navigator, has advice: Honor political donors’ intent by contributing to groups involved with issues they worked on while working in Congress.

There are ancillary benefits to donating extra campaign cash, too, Miniutti said.

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“It’s great exposure for the politician,” she said. “And getting a contribution from a celebrity, be it a politician or someone from Hollywood, is something that it draws a lot of attention to the charity. It could be very life-giving for the nonprofit.”

A number of outgoing congressional representatives will soon weigh whether to give away their campaign cash or keep it for future political prospects.

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It’s a group that includes Reps. Mike Rogers, R-Mich. ($1.85 million); Michele Bachmann, R-Minn. ($1.56 million); Ed Pastor, D-Ariz. ($1.31 million); Tom Petri, R-Wis. ($992,596) and Gary Miller, D-Calif. ($860,307).

Retiring Rep. Dave Camp, R-Mich., leads the pack with $3.18 million left in his account as of March 31.

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There’s no word yet on what he’s planning to do with his campaign fund.

This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

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