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Cain left with millions after withdrawing from presidential race
Question of the Day
When a bid for the presidency fails, the typical politician can roll over any leftover campaign donations to efforts to maintain a seat in Congress or place at the governor’s mansion. But Herman Cain is not your typical politician, as the voters were often reminded; he’s a businessman.
Twenty-first century politics, too, is a big business, and the political novice’s months-long flirtation with the presidency leaves him with potentially millions of voters’ dollars he could spend with few limitations for years to come.
Mr. Cain said Saturday he was withdrawing from the race and establishing an issue group called the Cain Solutions, indicating that the presidential campaign is likely to be converted into a political action committee or nonprofit that can pay for a website and other platforms for Mr. Cain’s ideas - as well as staff, meals and expenses.
There are few restrictions on what former candidates may do with remaining funds except that they may not pocket them directly.
“Returning it seems like the easiest way to prevent any questions about their intent” but that is not likely, said Sheila Krumholz, executive director of the Center for Responsive Politics, which has monitored campaign finance since 1983. Since that time, the cost of elections has ballooned to the extent that running for office can be a vocation in itself, and years after the national spotlight fades, massive chests of money raised from ordinary citizens have remained with failed candidates, consultants and political committees.
Other permitted alternatives are to “contribute it to charity or establish their own charities, which is what they often do so they can control it. They can give to parties and other politicians, which they often do if they want to become lobbyists,” Ms. Krumholz said.
Mr. Cain’s decision to “suspend” his campaign rather than terminate it gives additional leeway, allowing him to continue to raise funds without disruption. Secretary of State Hillary Rodham Clinton’s presidential campaign used the term in 2008 and has continued to collect cash, even generating income by renting its donor list to Massachusetts Senate candidate Elizabeth Warren.
Cain spokesman J.D. Gordon declined to say whether donors could expect refunds.
The campaign could also become the first former candidate committee to morph into a “super-PAC,” a new type of group that can raise unlimited funds and run ads supporting or opposing candidates. The move would allow Mr. Cain to remain relevant, and in control of large sums of money, while making himself valuable to whichever candidate he endorses.
Newt Gingrich, a possible recipient of a Cain endorsement, used an older type of political fund to maintain an active - and pampered - public life for years after leaving Congress, with a name, American Solutions, not dissimilar to the new Cain Solutions. That group raised $28 million last year and spent $3.3 million on chartered air travel.
Mr. Cain raised more than $5 million through September. Information on the financial activity since that time won’t be disclosed until January, but the campaign said it raised $9 million over a few weeks alone.
The funds allowed Mr. Cain and associates to dine and travel in style, using $350,000 on private chartered air in a few weeks, spending thousands at hotels such as the Ritz-Carlton and the Four Seasons, and eating largely steak dinners, records show.
One of the campaign’s top recipients was T.H.E New Voice, a company set up to sell Mr. Cain’s books and motivational talks, which was paid $100,000.
In many respects, meanwhile, Mr. Cain’s expenditures on actual campaigning for the presidency appeared anemic. Well after the initial and unexpected spike in attention to Mr. Cain in late September, a reluctance to ramp up resources meant his staff was unable to receive emails for days at a time because the organization’s meager computer servers were overwhelmed with traffic. There was little evidence of major ad buys.
Donors also sent checks to outside groups dedicated to sending Mr. Cain to the White House, including one, Americans for Herman Cain, that appeared to spring up in part due to concerns about the campaign’s inactivity.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Luke Rosiak is a projects reporter on The Washington Times’ investigative team. He formerly covered lobbying and campaign finance for two watchdog groups as well as transportation for The Washington Post. Luke can be reached at email@example.com.
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