Can President Biden Transfer His Campaign Warchest To Another Candidate?

Answering a Paid Subscriber Question

Recently, a paid subscriber asked “Can you explain whether Biden’s war chest is transferable to another candidate? I’ve read conflicting things.”

This is an important question. One of the main discussion points in the debate over whether President Joe Biden should be replaced as the Democratic Presidential nominee is the issue of fundraising.

At his last report to the Federal Elections Commission, President Biden had raised $220,328,658.36 into his committee overall and had $91,566,115.96 cash on hand.¹ According to news reports, President Biden raised over $127,000,000 in June alone.²

With an election less than five (5) months away, would new Democratic nominee for President have to start from scratch?

Some are suggesting that the money raised by Biden’s Presidential campaign could simply be transferred to a new Presidential nominee of the Democratic Party.

While President Biden cannot transfer his campaign funds to another Presidential candidate, there are options that would allow a new Democratic nominee to either utilize his campaign funds or benefit from them.³

I. Federal Candidates Typically Cannot Transfer Their Campaign Funds to Other Federal Candidates

Each candidate for federal office, excluding the Vice President, must have their own principal campaign committee for election to that office.⁴ While a candidate can have additional authorized committees, they still are required to have a principal campaign committee.⁵

Candidates for federal office are allowed to transfer funds, subject to limitations, between committees that they personally control but not to committees of other candidates.⁶ Federal candidates cannot share their campaign funds with other candidates except for those committees created for joint fundraising ventures.⁷

President Biden is a candidate for federal office.⁸ Biden for President is his principal campaign committee for President.⁹ Any new Democratic candidate for President would also be a candidate for federal office and have to create their own principal campaign committee for President upon raising $5,000.00.¹⁰

While individuals are limited to making a $3,300.00 maximum contribution per federal candidate per cycle,¹¹ the Federal Elections Commission further limits contributions from one federal candidate’s committee to another federal candidate’s committee to just $2,000.00.¹²

Thus, President Biden could contribute no more than $2,000.00 from his current Presidential committee to another Presidential campaign.

The candidate campaign fund transfer rules impact the decision on a potential replacement candidate. While a non-federal candidate might be best positioned politically, a federal candidate might be best positioned financially.

Consider potential suggested federal candidates to replace Biden such as Senator Amy Klobuchar (D-Minnesota), Senator Elizabeth Warren (D-Massachusetts), Senator Mark Warner (D-Virginia), Congressman Eric Swalwell (D-California), or Senator Michael Bennet (D-Colorado). These individuals could permissibly transfer campaign funds saved up from their other federal campaign committees into a new Presidential campaign committee.¹³

However, consider potential suggested non-federal candidates to replace Biden such as California Governor Gavin Newsom, Kentucky Governor Andy Beshear, Maryland Governor Wes Moore, Michigan Governor Gretchen Whitmer, or Pennsylvania Governor Josh Shapiro. These individuals could not use campaign funds saved up from their state campaign committees in a Presidential election.¹⁴

II. An Exception for Vice President Kamala Harris as the New Nominee

An exception to the transfer rule exists for Vice President Kamala Harris or a potential new Vice Presidential running mate who President Biden selects.

A Presidential candidate and their nominated Vice Presidential candidate both share an authorized committee.¹⁵ Campaign contributions made to Biden’s current Presidential committee are considered contributions made to Kamala Harris.¹⁶ Campaign expenditures made by Biden’s current Presidential committee are considered expenditures made on behalf of Kamala Harris.¹⁷

Biden once used these provisions himself as Vice President when he sought and received permission from the Federal Elections Commission to have the Obama for America campaign transfer $138,000 to his 2008 Presidential campaign to cover a debt that his 2008 Presidential campaign owed.¹⁸

When he nominated Kamala Harris as his Vice Presidential running mate in 2020, she was added as an additional candidate to his principal campaign committee.¹⁹ Thus, if Biden dropped out and Kamala Harris became the Presidential nominee of the Democratic Party, she would be able to use the funds in his current principal campaign committee.²⁰

This complicates matters somewhat for the Democratic Party. There are many Democrats who would like Biden to step aside but do not want him replaced with Kamala Harris.

However, Biden could drop Kamala Harris as the Vice Presidential nominee and nominate a new running mate for Vice President. After naming that individual to his authorized committee, Biden could then drop out of the race and the Democratic Party could nominate this new Vice Presidential candidate as President. This new candidate would have the same ability to use the campaign funds as Kamala Harris.

III. Another Potential Option for Transferring Campaign Funds

Federal campaign finance law allows transfers of campaign funds between affiliated federal committees, including a Presidential campaign and a political party committee.²¹ A nominated candidate for President is allowed to designate the national committee of the party that nominates them as their principal campaign committee.²²

Under the current rules, President Biden could transfer the funds from his principle campaign committee to the national Democratic Party. He could then drop out of the race. A new Presidential candidate nominated by the Democratic Party could then designate the Democratic Party as his or her own principal campaign committee and have access to the existing campaign funds.

IV. An Alternative if a Transfer of Campaign Funds is Prohibited

One might be wondering. Is there an alternative to transferring funds from Biden’s campaign committee if the transfer is not allowed?

Yes.

It seems likely that President Biden’s campaign committee, with its own funds, could make independent expenditures on behalf of whoever a new Democratic Presidential nominee is.²³ Although the issue has, to my knowledge, not come up before, it seems unlikely that there would be a limitation to a Presidential campaign committee making independent expenditures on behalf of another Presidential candidate.²⁴

Such independent expenditures would be unlimited and could be made through any time before the election.²⁵ The expenditures could not be coordinated with the new Presidential campaign team, which would ultimately hinder the effort on behalf of that candidate.²⁶ However, the campaign funds could still have an outsized impact on the race as an independent expenditure.²⁷

V. A Final Word

The conversation about fundraising is one that is generally icky for most Democrats. We don’t like thinking about the chances of a candidate being able to win being based upon how much money they can raise and spend.

Also, in this context, it can feel almost vulture-likes, especially if there is a legitimate health reason that forces President Biden to withdraw from the race.

However, it is a discussion that needs to happen because in facing the threat of Trumpism, Democrats have to take reality into account. Furthermore, as the discussion of campaign funds as a reason for President Biden to stay in the race or drop out, Democrats need to be informed of what the campaign finance options are.

Democrats should know that:

1. President Biden will not simply be able to give his current campaign committee to anyone who is not his Vice Presidential nominee.

2. The campaign funds that President Biden has raised will not necessarily all go to waste if he decides that he no longer wants to be the nominee.

While President Biden will not be able to simply transfer the record amounts of campaign funds he has raised to another Democratic replacement candidate, there are options that could enable a replacement candidate to use President Biden’s campaign funds for their own election in November or at least benefit from them.

Hope that answers the question!

Do you have a question for Off Script? Send to maxkanin@substack.com!

1. https://docquery.fec.gov/pdf/407/202406209652384407/202406209652384407.pdf

2. https://www.cbsnews.com/news/biden-campaign-june-fundraising-127-million/

3. The author of this article is an attorney licensed to practice in the State of California and the District of Columbia. This article and all of the works on this Substack page are statements of the opinions of the author, only, and do not constitute legal advice; they are not intended to be relied upon by any individual or entity in any transaction or other legal matter, past, pending, or future. A paid subscription to this Substack page supports the author’s scholarship and provides access to research that the author has compiled, but does not establish an attorney-client relationship. The author does not accept unsolicited requests for legal advice or representation, and this Substack page is not intended as legal advertising. The opinions expressed on this Substack page reflect the personal views of the author only.