Correction: This article originally stated that Rep. Steve Buyer is under federal investigation. It is unknown whether this is true. While the Office of Congressional Ethics acknowledged it has received the complaint filed against Buyer by Citizens for Responsibility and Ethics in Washington, a spokesman declined to confirm or deny whether an active investigation is taking place. When asked if the Office of Congressional Ethics or the Internal Revenue Service (with which CREW also filed a complaint) had contacted Buyer’s office about an investigation, Buyer spokeswoman Anjulen Anderson stated: “Not that I know of. Not to my knowledge.”

The recent retirement announcement of U.S. Sen. Evan Bayh (D-Ind.) shook Capitol Hill.

Bayh had been polling strong and was expected to win re-election to a third term. He has also been fund-raising like he was running for re-election, generating nearly $9 million since his last election in 2004. His campaign committee boasts nearly $13 million in cash on hand. But Bayh had had enough of electoral politics, he said.

So now that Bayh is leaving elected office when his term ends early next year, where does all that money go?

“The bottom line is no personal use, obviously,” Judith Ingram, a Federal Election Commission spokeswoman, told Capital Eye. “In addition, he can donate it to charity, or contribute it to the national party committee. He can contribute up to $2,000 to another candidate’s committee, put it into a PAC, convert his campaign committee into a PAC. He could do nothing with it … if he decided to run again he could dip back into it.”



After retiring — or losing an election — politicians are not required to close down their campaign committees; they may keep them running indefinitely. Sometimes they do this to pay off campaign debt, or, to keep their war chest full if they were to ever seek office again. After paying down any debts, money is often spent to “wind down” the committee and pay off any office expenses.

For those who still have cash on hand, the FEC sets guidelines regarding how candidates’ committees may spend campaign funds. Other than the prohibition on personal use, there are few limitations. Punishments for violating the prohibition on personal use range from substantial fines to possible prison time.

“The overarching rule is that it can’t be converted to personal use, but that it can be used for any other lawful purpose,” Campaign Legal Center attorney Paul Ryan explained.

Despite the many options open to retiring members, national party committees will almost certainly pressure Bayh and other retirees to transfer a significant portion of their leftover campaign funds to the party coffers. The law allows candidates to transfer unlimited amounts of money to national party committees such as the Democratic National Committee and the Republican National Committee, as well as party campaign committees such as the Democratic Congressional Campaign Committee and National Republican Congressional Committee.

Such money can be substantial.

According to a Center for Responsive Politics analysis, the 25 senators and representatives who have so far announced their retirement have a combined $31 million in cash on hand: The 11 retiring senators have $24 million, while 14 representatives hold the remaining $7 million.

Democrats control far more of this “leftover” money than Republicans, $25.4 million compared to $5.5 million. A large portion of the Democrats’ advantage, however, comes from Bayh’s impressive $13 million war chest, though even without it they beat the GOP in cash by more than 2-to-1.

In contrast to the clear restrictions on campaign committee funds, rules regarding Leadership PACs are far less restrictive.

Of particular note: the issue of personal use.

“The ban on personal use does not apply to Leadership PACs once the individual leaves Congress,” Ryan said. The law “only applies to principle campaign committees, not Leadership PACs. The FEC for years has been saying the personal use ban should be expanded to all committees. House and Senate rules arguably ban any use of personal funds, but once they leave…they are not subject to House or Senate rules.”

According to a written legislative recommendation by the FEC to Congress, “no corresponding provision covers individuals who convert contributions received by party committees, separate segregated funds, leadership PACs and other political committees, to their own personal use.”

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The FEC recommended an amendment to “remedy this growing problem.”

“It [the law] is not explicit …Our regulations don’t cover all possible violations … All these things we would look at on a case-by-case basis. If someone files a complaint the commission would look into it,” the FEC’s Ingram said.

This lack of clear regulation raises major questions surrounding the use of Leadership PACs.

“They have become just big slush funds … A very small amount of the money in leadership PACs is passed on to other candidates. They have been abused in this manner since the mid to late 1990s,” said Ryan.

Of the 25 congressional retirees-to-be, 18 have leadership PACs, which when combined, today have $850,000 in cash on hand, according to the Center’s analysis.

The biggest PAC by far is Bayh’s All America PAC, with $439,500 in cash on hand. The second largest PAC, the White Mountain PAC belonging to Sen. Judd Gregg (R-N.H.), has $72,722 cash on hand.

The House member with the most PAC money on hand is Rep. Steve Buyer (R-Ind.). His Storm Chasers PAC has nearly $43,500 remaining.

As Capital Eye previously reported, Buyer has had ethics complaints filed against him.

Bayh’s press office declined to comment on what the senator may do with his surplus campaign cash, referring Capital Eye to Bayh’s public statements regarding his remaining campaign money:

“Well, I haven’t decided yet. I’m going to take some of it to help whoever our nominee is in Indiana. I think we have got a good chance to win that election. And so I’d like to be very supportive financially … Number two, I would like to help like-minded Democrats,” Bayh told CNN’s Wolf Blitzer soon after announcing his retirement. (Read the transcript here).

Another of Blitzer’s questions — and Bayh’s response — demonstrate how complicated and convoluted the campaign cash issue is:

“How much can you give that nominee legally?” Blitzer asked.

“Well, I don’t know. That’s a job for the lawyers,” Bayh replied.

Phone messages and e-mails left with the offices of Buyer and Gregg requesting comment for this story were not returned.



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