Debt Disclosure, Part 3: Understanding Net Debts Outstanding

This is the third of our monthly tips on proper reporting of debts owed by committees. In the middle of primary season, campaigns are reminded that they may only accept contributions to retire debt from an election if they have net debts outstanding for that election -- that is, more debts outstanding than cash-on-hand for that particular election. For example, a campaign wins its primary on March 10, but has $150,000 in cash-on-hand raised for the primary, and $300,000 in debts remaining from the primary. The campaign has a net debt outstanding for primary 2008 of $150,000 ($300K in debts - $150K in cash on hand). As a result, the campaign may raise $150,000 in contributions specifically designed for "primary debt 2008," but only from contributors who have not already given the maximum amount for the 2008 primary election. Note that the campaign must continually adjust the net debts outstanding calculation to adjust for funds raised and bills paid, and it must retain this documentation in its records. Click here for more examples and information on how to comply with the net debts outstanding requirements.