Winding down publicly funded presidential candidate committees
For publicly funded presidential candidate committees, winding down costs are "qualified campaign expenses." They include costs associated with the termination of political activity related to a candidate's seeking his or her nomination for election, such as the costs of complying with the post-election requirements of the Federal Election Campaign Act (the Act), the Presidential Primary Matching Payment Account Act (primary public funding), and the Presidential Election Campaign Fund Act (general election public funding). They also include other necessary administrative costs associated with winding down the campaign, such as:
- Office space rental
- Staff salaries
- Legal expenses
- Accounting expenses
- Telephone expenses
- Office supplies
Gifts and monetary bonuses
Gifts for committee employees, consultants and volunteers in recognition for their campaign-related activities or services (provided that such gifts do not exceed $150 total per individual and the total of all gifts do not exceed $20,000) are qualified expenses.
The regulations require that monetary bonuses paid after the date of ineligibility (primary election candidates) or after the date of the election (general election candidates) for committee employees and consultants in recognition for campaign-related activities or services be awarded pursuant to the following:
- A written contract made prior to the date of ineligibility (primary election candidates) or prior to the date of the election (general election candidates); and
- Are paid no later than thirty days after the date of ineligibility (primary election candidates) or are paid during the expenditure report period (general election candidates).
Sale of assets
A minor or new party candidate may sell assets donated to the candidate's authorized committee(s) or otherwise acquired for fundraising purposes, subject to the limitations and prohibitions of the Act.
A major party candidate may sell assets acquired for fundraising purposes in connection with his or her GELAC account or acquired to make up for any deficiency in payments from the Presidential Election Campaign Fund.
A candidate whose outstanding debts exceed the candidate's cash on hand after the end of the matching payment period may dispose of assets acquired for fundraising purposes in a sale to a wholesaler or other intermediary who will in turn sell such assets to the public, provided that the sale to the wholesaler or intermediary is an arms-length transaction. Sales made under this subsection will not be subject to the limitations and prohibitions of the Act.
Primary election candidates
Candidates accepting matching funds for the primary election must limit the total amount of winding down costs that may be paid for, in whole or part, with matching funds to the lesser of: (1) 10 percent of the expenditure limitation; or (2) 10 percent of the total of: (A) the candidate’s expenditures subject to the expenditure limitation as of the date of ineligibility; plus (B) the candidate’s expenses exempt from the expenditure limitation, such as fundraising expenses, as of the date of ineligibility. The limitation can be no less than $100,000.
Ineligibility and net outstanding campaign obligations
If on the date of ineligibility a candidate has net outstanding campaign obligations, that candidate may continue to receive matching payments provided that on the date of payment there are remaining net outstanding campaign obligations. The candidate's net outstanding campaign obligations equal the difference between the total of all outstanding obligations for qualified campaign expenses as of the candidate's date of ineligibility, plus estimated necessary winding down costs, less the total of cash on hand, capital assets, other assets and receivables. The amount submitted as the total of outstanding campaign obligations will not include any accounts payable for non-qualified campaign expenses. Matching payments received after the date of ineligibility, as defined in 11 CFR 9033.5, may be used to defray the candidate’s net outstanding campaign obligations. 11 CFR 9034.1(b). Matching fund payments may not be used to continue to campaign unless the candidate reestablishes eligibility.
Ineligible candidates attending the national convention
The expenses incurred by an ineligible candidate to attend, participate in, or conduct activities at the national nominating convention generally may not be treated as qualified campaign expenses. However, certain activities that would otherwise be considered qualified campaign expenses retain that status even if the activities are conducted at a national convention. See AO 2000-12 for examples of such activities. If the candidates and their staff divide their time at the convention between such activities and attendance at, and/or participation in, other aspects of the convention, the candidates may be required to allocate their expenses accordingly.
General election candidates
Winding down expenses for publicly funded general election candidates paid for using public funds must be limited to the lesser of: (1) 2.5 percent of the expenditure limitation; or (2) 2.5 percent of the total of: (A) the candidate’s expenditures subject to the expenditure limitation as of the end of the expenditure report period; plus (B) the candidate’s expenses exempt from the expenditure limitation, such as fundraising expenses, as of the end of the expenditure report period. The limitation can be no less than $100,000.
The general election legal and accounting compliance fund (GELAC fund) may be used to pay 100% of salary and overhead expenses incurred after the end of the expenditure report period. These expenses are presumed to be solely to ensure compliance with the Act and the Presidential Election Campaign Fund Act.
Allocation of primary and general election winding down costs
A candidate who runs in both the primary and general election may divide winding down expenses between his or her primary and general election committees using any reasonable allocation method. An allocation method is reasonable if it divides the total winding down costs between the primary and general election committees and results in no less than one third of total winding down costs allocated to each committee. A candidate may demonstrate that an allocation method is reasonable even if either the primary or the general election committee is allocated less than one third of total winding down costs.