Using the general election grant and paying for qualified campaign expenses
Candidates are permitted to make expenditures to set up a basic campaign organization before the expenditure report period begins or before they receive public funds. For example, the candidate may make expenditures for establishing financial accounting systems and organizational planning. Such expenditures count as qualified campaign expenses and thus must ultimately be defrayed with public funds.
In the interim before public funds are available, however, the candidate may fund such expenditures from other sources. Subject to the restrictions detailed in the regulations, the candidate may borrow from the General Election Accounting and Compliance Fund (GELAC fund–major party candidates), from banks in the ordinary course of business, or from the primary campaign. Repayments of loans from these sources must occur within 15 days of receiving the general election grant. Apart from borrowing, candidates may also use personal funds up to the $50,000 limit. Minor and new party candidates may use private contributions they have collected that make up the difference between the amounts of their grants and the amount of the grants that the major party candidates receive.
Expenditure report period
“Expenditure report period” refers to the time frame during which a publicly funded general election candidate incurs qualified campaign expenses. In the case of a major party candidate, the expenditure report period begins on September 1 before the election or on the date on which the major party's presidential nominee is chosen, whichever is earlier; and the period ends 30 days after the presidential election. In the case of a minor or new party candidate, the period will be the same as that of the major party candidate with the shortest expenditure report period for that presidential election.
Qualified campaign expenses
A “qualified campaign expense” is a purchase, payment, distribution, loan, advance, deposit or gift of money or of anything of value:
- Incurred to further a candidate’s campaign for election to the offices of President or Vice President of the United States;
- Incurred within the expenditure report period, or before that period for start-up costs; and
- Neither the incurrence nor payment of which constitutes a violation of any law or regulation. (While expenses which constitute a violation of state or federal law are not qualified campaign expenses, such expenses do count against the candidate’s expenditure limitation if they otherwise meet the above two criteria.)
- Hiring campaign staff;
- Hiring a consulting firm to handle public relations and media coordination;
- Hiring legal counsel;
- Unreimbursed transportation, ground services or facilities provided to media personnel, Secret Service personnel or national security staff. See separate section for more information.
- Legal and accounting services provided solely to ensure compliance with the Federal Election Campaign Act and the Presidential Election Campaign Fund Act. Note that such services may also be defrayed with GELAC funds. See separate section for more information.
- Travel expenditures relating to the campaign by any individual. See separate section for more information; and
- Winding down costs.
The candidate has the burden of proving that all disbursements made by the candidate, the candidate’s authorized committee or any agents of either the candidate or such committee are qualified campaign expenses. The candidate’s burden of proof with regard to qualified campaign expenses consists of two elements—the candidate must show (1) that the expenditure was made, and (2) that the goods or services purchased were in connection with the campaign.
Travel expenditures relating to a presidential campaign by any individual, including the candidate, are considered qualified campaign expenses and must be reported by the candidate's authorized committee as expenditures.
Determining if travel is campaign-related
If any campaign activity, other than incidental contacts, is conducted at a stop, that stop is considered campaign-related. “Campaign activity” includes soliciting, making or accepting contributions, and expressly advocating the election or defeat of the candidate. Other factors, including the setting, timing and statements or expressions of the purpose of an event and the substance of the remarks or speech made, will also be considered in determining whether a stop is campaign-related.
Allocating travel expenditures
If a trip by a candidate or any other individuals includes only campaign stops, the total cost of the trip is a qualified campaign expense, payable by the committee. If a trip by a candidate or any other individual includes campaign and non-campaign stops, the portion of the cost allocable to campaign activity is calculated on a campaign stop to campaign stop basis. For example, assume that a candidate’s itinerary was to travel from Washington, D.C. to Detroit to San Francisco to Fort Worth and return to Washington, D.C. If the stops in San Francisco and Fort Worth were campaign-related while the stop in Detroit was not, the cost allocable to campaign activity would be determined by calculating what the trip would have cost if the candidate had traveled from Washington, D.C. to San Francisco, from San Francisco to Fort Worth, and from Fort Worth to Washington, D.C.
Candidate’s spouse and family
Travel expenses of a candidate's spouse and family when accompanying the candidate on campaign-related travel may be treated as qualified campaign expenses and reportable expenditures. If the spouse or family members conduct campaign-related activities, their travel expenses will be treated as qualified campaign expenses and reportable expenditures.
Presidential candidate committees are required to maintain appropriate records for non-commercial travel. Commission regulations also require candidate committees to obtain and keep copies of any shared-ownership or lease agreements, as well as the pre-flight certifications of compliance with those agreements. See 11 CFR 9004.7(b)(3)-(4), (5)(v).
Transportation and services made available to media personnel and Secret Service
Unreimbursed expenditures made for transportation, ground services or facilities (including air travel, ground transportation, housing, meals, telephone service and computers) provided to media personnel, Secret Service personnel or national security staff are qualified campaign expenses.
Legal and accounting compliance expenses
Legal and accounting services provided solely to ensure compliance with federal campaign finance and public funding laws are qualified campaign expenses. If public funds are used to pay for such services, the payments will count against the candidate's expenditure limitation. If payments for such services are made by a minor or new party candidate from an account containing private contributions, though, the payments do not count against that candidate's expenditure limitation. Report payments for legal and accounting services as operating expenditures.
Payments for such services may also be made from the GELAC fund (for major party candidates only). Payments are made for these services from the GELAC fund do not count against the candidate's expenditure limitation.
Finally, like other federal candidates, all publicly funded presidential candidates may take advantage of the free legal and accounting services exemption in FEC regulations.
The following are examples of disbursements that are not qualified campaign expenses:
- Expenditures in excess of any of the public funding spending limits;
- Post-election expenditures (except for accounts payable incurred before the end of the expenditure report period) and winding down costs;
- Civil or criminal penalties paid pursuant to the Federal Election Campaign Act;
- Solicitation costs incurred by major party candidates for contributions to the GELAC fund
- Payments made to the candidate (other than to reimburse advances);
- Payments (including transfers and loans) to other committees authorized by the same candidate for a different election;
- The cost of lost, misplaced or stolen items. Factors considered by the Commission in making this determination include, but are not limited to, whether the committee demonstrates that it made conscientious efforts to safeguard the missing equipment; whether the committee sought or obtained insurance on the items; whether the committee filed a police report; the type of equipment involved; and the number and value of items that were lost.
- Any net loss from an investment or other use of public funds.
Publicly funded general election candidates must repay public funds that were spent on nonqualified campaign expenses. After the campaign, the Commission audits each candidate's committee to ensure that funds were not misused. A repayment may be required if the Commission determines that a committee incurred nonqualified campaign expenses by spending in excess of the limits, by using public funds for expenses not related to the campaign or by insufficiently documenting the expenditure of public funds.