2020 Candidates Delayed Paying Staff to Look Richer on Paper

By Lachlan.Markay@thedailybeast.com (Lachlan Markay) Sam.Brodey@thedailybeast.com (Sam Brodey)
Drew Angerer/Getty

For months, Sen. Amy Klobuchar’s (D-MN) presidential campaign made regular payments to its staff and vendors, with varying daily expenditures that never exceeded $335,000. But on April 1, 2019, the campaign’s spending exploded.

Whereas Klobuchar’s campaign spent an average of about $55,000 per day through the end of June, according to FEC filings, it dropped a whopping $624,000 on the first day of April, including a $300,000 payment to the campaign’s digital vendor.  

That massive uptick in expenses was likely due to the fact that April 1 marked the beginning of the new fundraising quarter. By putting off the payments until then, Klobuchar was able to put the best possible spin on her presidential campaign’s financial position during the previous three months. If those expenses had come a day earlier, Klobuchar’s cash on hand figure would have been roughly $6.35 million. Instead, the campaign was able to claim roughly $7 million in reserves—a sum that placed her among the better-positioned Democrats in the presidential race. 

A Daily Beast review of campaign finance records indicates that the delayed-expenses strategy has continued through the just completed cycle, and has involved payments to campaign staffers as well.

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Klobuchar, whose campaign did not respond to multiple requests for comment, is one of at least four Democratic presidential candidates who appear to have skipped a staff payday at the end of June, putting off that pay period until the beginning of the following month and hence transferring the expense to the next quarter’s balance sheets.

Virtually every campaign engages in forms of accounting gimmicks in order to enhance their financial standings. Veterans of past and current races say that it is common to try and delay spending to future quarters in order to bolster cash reserves that have to reported at filing deadlines. That pressure is particularly acute in elections with crowded fields (such as the 2020 Democratic primary) when reporters, donors, and voters are ever attuned to any signs of momentum or lack thereof.

For some campaigns, the ability to put off a payroll payment—whether by design or coincidence—made a substantial difference. That’s most true for the Klobuchar campaign, which reported $186,000 in salary expenditures on its last reported pay day, June 15.

Federal Election Commission records indicate that the campaign was otherwise paying staffers on the 15th and last day of each month. But no paychecks went out at the end of June, according to its second quarter financial filing. 

Klobuchar didn’t simply eliminate those expenses by postponing the last payroll payment of the second quarter. That’s because her campaign appears to have put off its last pay period of the first quarter as well after writing salary checks on February 20, February 28, and March 15, the next payments went out on April 1. But her staff, and accompanying payroll expenses, were larger in June than in March. And at some point, she will either have to make all wage payments or simply not pay her staff. And by kicking the can down the road, she has been able to avoid taking the hit on a campaign finance filing for the time being. 

Three other campaigns also departed from previous payroll schedules by skipping end-of-month paychecks last month, according to a review of campaign finance records. 

Rep. John Delaney’s (D-MD) campaign said the change in schedule was simply a product of switching to a new payroll management service that restructured that schedule.

Sen. Michael Bennett (D-CO) and Gov. Jay Inslee (D-WA) both attributed it to the fact that June 30 was a Sunday, so checks went out the following day. But it’s common practice for employers to send out paychecks on the preceding Friday when paydays fall on a weekend. The decision to do so the following Monday served, intentionally or not, to boost apparent cash-on-hand figures at the end of the quarter in a way that shrouded the campaigns’ actual liabilities.

There’s nothing improper or problematic with structuring campaign payments in order to present the best possible picture of its financial situation. But an understanding that campaigns do so, and how they do so, can give the public a better grasp of the financial standing of the various political camps vying for the 2020 Democratic nomination.

Delayed payroll payments can be relatively small fractions of total cash on hand figures. But campaign staffers are not heavily compensated employees to begin with. And the absence of a regular paycheck—even by just a matter of days—can cause life complications. 

“I haven’t heard of this practice before but I am not surprised,” said Kim McMurray, an executive council member of the Campaign Workers Guild and a former organizer for 2020 contender Sen. Bernie Sanders (I-VT). “FEC timing deadlines are such an important moment for campaigns to show enthusiasm, support, etc. so campaigns want to show the largest number possible.”

“It is very disappointing if this came at the expense of the workers,” McMurray added.

Read more at The Daily Beast.

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