Hours after dropping out of the presidential race this month, Rick Santorum fired off an e-mail to supporters asking for “one more” contribution: “I am planning to do everything in my power to bring a change about in the White House,” he wrote. “But our campaign has debt, and I cannot be free to focus on helping defeat [Barack Obama] with this burden.” Santorum maintains his campaign is less than $1 million in debt, and his adviser John Brabender says, “We feel good that in short order we’ll be able to wrap things up.” Yet if history is any indication, the candidate may be living with the financial legacy of his failed candidacy for a long time.
Running for president is exhausting and all-consuming. Putting an end to a presidential campaign can be a nightmare that lasts years. There are employees, consultants, lawyers, and ad makers clamoring to be paid, ad buys to cancel, contracts and legal disputes to settle, office space, computers, phones, and furniture around the country to unload, and a staggering pile of disclosure forms and other paperwork to complete before the Federal Election Commission will certify that a campaign is officially over. “I would often say to people: Imagine starting a $100 million business from zero, building it up, running it, and then bringing it back down to zero all within nine months or a year’s time,” says Joe Stoltz, the FEC’s former director of auditing. “You don’t see many businesses come and go that quickly. It’s not easy.”
Four years after running for president, Hillary Clinton has yet to close out her campaign (she owes $245,000 to a consultant, FEC records show). Same for John McCain (his campaign has leftover funds he still has to disburse); Rudy Giuliani (he owes various people a total of $2.6 million); and John Edwards (he has unpaid bills of $333,586). Bill Clinton last ran for president in 1996. The FEC has not closed the book on his campaign either—he’s disputing $319,630 in debts. It’s hard even to remember that Bob Barr, Al Sharpton, Chris Dodd, and Alan Keyes ever ran for president. The FEC hasn’t forgotten; each of their campaigns is officially ongoing. In all, 38 past presidential contenders going back 16 years are still candidates, if only in the eyes of the federal government.
Santorum and several of his fellow GOP contenders have joined the ranks of former contenders in limbo. Herman Cain says contributions started drying up late last year as allegations swirled about his extramarital affairs. He dropped out in part to avoid spending years putting his debts behind him. “As a businessman, I knew if I continued on as contributions started to drop off, I’d end up with significant debt,” he says in an e-mail. His campaign owes $450,000—the amount Cain lent to his presidential bid. (The FEC still counts that as money owed.) To settle up, Cain can raise money to pay himself back, or choose to forgive the debt.
Being rich definitely helps ease the burden of retiring debt. Jon Huntsman lent his campaign a total of $4.1 million. Abby Huntsman, a spokeswoman for her father, says he’s paying invoices “aggressively,” noting in an e-mail: “The roller coaster ride does not stop with the end of the campaign.”
If Newt Gingrich concedes the nomination to Mitt Romney, he’ll be staring down around $4.5 million in debt, according to his campaign’s estimates. As of the end of February, his unpaid bills included private jets, tour buses, and security guards. He also had outstanding bills from an array of consultants.
Candidates hoping to wring cash out of supporters often find that most of them already have given the maximum they can under election laws. And few people want to give money to a candidate after he’s lost. “Debt retirement money is the hardest kind of money in politics to raise,” says Michael Toner, a campaign finance attorney whose clients included George W. Bush and Bob Dole.
Officeholders often have an easier time raising money after they exit the race because at least they have a claim on donors’ attention. Michele Bachmann, the Minnesota congresswoman, dropped out in January with roughly $1.1 million in unpaid bills for everything from golf carts to photographers. Chase Kroll, a campaign spokesman, says in an e-mail that his boss recently raised half a million dollars for her reelection to Congress and that he’s “highly confident” she will also pay off her presidential debts.
One time-proven way to help dispatch campaign bills quickly: Broker a truce with the winner. Tim Pawlenty, the former Minnesota governor, racked up $435,542 in debts in his four-month-long campaign for the GOP nomination last year. Soon after he quit, he endorsed Mitt Romney—and the money started pouring in. According to USA Today, more than half the funds Pawlenty raised—he’s now debt-free—came from Romney’s family, staff, and supporters. Likewise, Hillary Clinton abandoned her 2008 presidential run with debt of $25 million. Barack Obama intervened, asking his supporters to send her donations. She sold a $50 DVD of her noteworthy speeches, raffled off a day with Bill Clinton, and offered to rent out her e-mail list. (The Clinton Foundation took her up on that.) She also wrote off $13.2 million she’d lent to the campaign.
Failure to pay off debt is an option, but it can take decades before the FEC will let a candidate off the hook. John Glenn, the first U.S. astronaut to orbit the Earth, took 22 years to escape the gravitational pull of his failed 1984 presidential bid. He used a $2 million bank loan to help finance his campaign, then withdrew from the race with the debt still on his books. He chipped away at it over the years but never raised enough to settle up. In 2006, the FEC mercifully closed out his campaign with the debt unpaid.
Four years after running for the Oval Office, Giuliani still has $2.6 million in unpaid bills for corporate jets, security details, and $1.1 million in loans to his campaign. What happens if he can’t zero it out? A campaign may ask vendors for a settlement, “sometimes pennies on the dollar,” says Stoltz, and get the FEC to approve the plan. Candidates themselves aren’t personally liable.
An odd few will leave their campaign coffers open on purpose. Former GOP Representative Bob Dornan of California, who ran for president in 1996, owes himself $150,000—money he says he’s never tried to raise and will write off when he finally closes the campaign one day. That is, if he doesn’t run again. “Hope springs eternal,” says the 79-year-old. The account’s a point of pride, he adds: People “can see that I left with all of my flags flying and owing no money to anybody but myself.”
The luckiest candidates—Howard Dean, Rick Perry—still have money left in their coffers when they call it quits. They can give it away to approved charities, party committees, and super PACs, under FEC rules. Even that can take years. McCain has given $8.6 million to charity and has $1.8 million more to dispense. Four years after he ended his 2000 campaign, Al Gore was still giving money away, including $6.5 million to various Democratic Party committees. He had enough left over to give his own charity, Climate Project, $100,000.
Yet before Gore could close the book on his campaign, he had to undergo an exhaustive government audit required of all candidates who take public financing. Gore staffer Keri Adams spent 18 months arranging contribution checks in numerical order, organizing invoices, and making spreadsheets of phone bills to help the audit go smoothly. She and a half-dozen other employees huddled among boxes and reams of paperwork in a Washington office with FEC auditors, never socializing with them for fear of being accused of developing improper relationships. “People say, ‘Oh my God, that sounds like torture.’ And it was,” Adams says. “The amount of bureaucracy was truly amazing.”