Excess McCain 2008 presidential funds went to charity, not 2012 race

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The dormant 2008 presidential apparatus of John McCain this year transferred nearly $9 million in old donations to an educational charity run by three major political supporters that bears the Arizona senator’s name, filings showed Tuesday.

The big-money move stands in contrast to President George W. Bush, who found himself in a nearly identical financial position but gave the millions instead to the Republican National Committee. Party committees are a typical destination for excess political cash, and the money would have dramatically bolstered the RNC’s position as the chief financial resource of the party’s presumptive nominee, Mitt Romney.

The money was collected from Republican donors in 2007 and 2008 to support the party’s nominee for the nation’s highest office when Mr. McCain ran alongside then-Gov. Sarah Palin of Alaska.

The $9 million in leftover funds was transferred to the McCain Institute Foundation in two disbursements in February and March, according to a quarterly filing Tuesday with the Federal Election Commission.

The institute “will benefit the Arizona State University Foundation. The McCain Institute Foundation and ASU are working together to build a nonprofit education and research center focused on world affairs,” Brian Rogers, Mr. McCain’s communications director, wrote in an email.

The three trustees who will administer the charity were all “bundlers” who brought major money to the McCain political campaign, records show.

The charity’s lead trustee, Florida-based manufacturing executive F. Philip Handy, raised from $100,000 to $250,000 for the presidential bid. He once served as chairman of that state’s Board of Education. William Post, a financier who serves as chairman of the ASU Foundation’s board, raised the same amount. The third trustee, Illinois lawyer William Richardson, raised from $50,000 to $100,000.

According to an incorporation document, the money is to be used for the “McCain Institute for International Leadership to be established by Arizona State University; and to hold … materials arising from Senator John S. McCain III’s long history of public service … as well as important collections of his personal family records.”

By comparison, the equivalent fund of Mr. Bush, who won his second term as president in 2004, gave its remaining $12 million to the RNC in October 2006 — money needed to fight back against a bruising Democratic tide in the House and Senate the next month. Mr. Bush’s campaign spent $195,000 to support a library to house his important papers.

ASU spokesman Skip Derra said any talks with the university about establishing an institute don’t appear to be very far along. “I’ve done some checking and I haven’t readily found anything about any McCain Institute,” he said. ASU Foundation officials did not reply to requests for comment.

“The McCain Institute Foundation is governed by outside and independent trustees, and is legally bound to use the transferred funds exclusively for public charitable purposes in association with Arizona State University,” Mr. Rogers said.

Transferring the funds to the RNC would have allowed the committee to pay off nearly all of its $10.9 million in debt — a heavy burden it carries as it prepares for general election mode. (The RNC had $27 million in the bank at the beginning of March.) The Republican and Democratic national party committees typically function as the piggy banks for their presidential nominees.

This weekend, Mr. Romney and the RNC established a joint fundraising committee, a sign they already are effectively consolidating their bank accounts.

An RNC official did not acknowledge any slight to the committee or to the former Massachusetts governor.

“This is McCain’s money to do what he pleases with,” spokeswoman Kirsten Kukowski wrote in an email.

Nearly four years after Mr. McCain lost the presidential election to then-Sen. Barack Obama of Illinois, the mass of donations remained unspent because unlike Mr. Obama, Mr. McCain chose to forgo running a campaign funded by donors in the general election, instead accepting public financing.

He did, however, accept donations for a special fund that could be used for unanticipated legal, compliance and accounting costs. The compliance fund became a popular way for moneyed supporters to show their desire for a Republican president.

Brett G. Kappel, an election law attorney at Arent Fox LLP in the District, said giving to a charity is one of several options available to candidates with leftover funds, including compliance committees.

“They can give it to other candidates, federal or state parties, back to contributors — you can guess how often that happens — or to a [charity],” he said.

State parties also raised funds by attaching themselves to Mr. McCain’s name in what is known as a joint fundraising committee, in which state Republican parties and the candidate’s legal fund split the proceeds of fundraising events.

The result was that despite a tense campaign in which every bit of advertising could have helped, Mr. McCain and Mrs. Palin were left with a large secondary bank account that could not be used for political purposes. The holdings were so large that nearly $1 million dollars donated to the educational charity came from interest earned over the past four years.

Mr. McCain is, along with former Sen. Russ Feingold, Wisconsin Democrat, an author of a major 2002 campaign finance law known as the McCain-Feingold Act.

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