Using presidential primary matching funds and paying for qualified campaign expenses
Under the Presidential Primary Matching Payment Account Act, all contributions received by an individual from the date he or she becomes a candidate and all federal matching payments received by the candidate shall be used only to defray qualified campaign expenses or to repay loans or otherwise restore funds (other than contributions which were received and expended to defray qualified campaign expenses) which were used to defray qualified campaign expenses.
Qualified campaign expenses vs. nonqualified campaign expenses
A "qualified campaign expense" is a purchase, payment, distribution, loan, advance, deposit, or gift of money or of anything of value:
- Incurred by a presidential candidate or the candidate’s authorized committee from the date on which the individual becomes a candidate through the last day of the candidate’s eligibility;
- Made in connection with the candidate’s campaign for nomination; and
- Neither the incurrence nor payment of which constitutes a violation of any law or regulation.
- Hiring campaign staff;
- Hiring a consulting firm to handle public relations and media coordination;
- Hiring legal counsel;
- Ballot access expenses;
- Testing the waters (if an individual becomes a candidate);
- Federal income taxes paid on non-exempt function income (interest, dividends and sale of property);
- Travel expenditures relating to the campaign by any individual. See separate section for more information; and
- Unreimbursed transportation, ground services or facilities (including air travel, ground transportation, housing, meals, telephone service, typewriters and computers) provided to media personnel, Secret Service personnel or national security staff.
The candidate has the burden of proving that expenditures are qualified campaign expenses. Where required documentation is lacking, the candidate has not met that burden of proof.
Payments by multicandidate political committees
A payment by a multicandidate political committee for goods and services used by the presidential candidate committee is an in-kind contribution to, and a qualified campaign expense by, a presidential candidate, even though made before the individual becomes a candidate if:
- The expenditure is made on or after January 1 of the year immediately following the last presidential election year;
- The candidate accepted or received the goods or services, requested or suggested their provision, was materially involved in the decision to provide them, or was involved in substantial discussions about their provision; and
- The goods or services are:
- Polling expenses;
- Administrative expenses and compensation paid for services rendered in connection with establishing and staffing state offices, other than offices in the candidate's home state and in or near the District of Columbia; or
- Expenses of individuals seeking to become delegates in the presidential nomination process.
When the candidate’s authorized committee reimburses the multicandidate political committee within 30 days of becoming a candidate, the payment shall not be deemed an in-kind contribution, and the reimbursement by the presidential committee shall be an expenditure and a qualified campaign expense of the candidate. Note that these rules for multicandidate committees apply to leadership PACs as well as to other types of multicandidate political committees.
Travel expenditures relating to a presidential campaign by any individual, including the candidate, are considered qualified campaign expenses and must be reported by the candidate's authorized committee as expenditures.
Determining if travel is campaign-related
If any campaign activity, other than incidental contacts, is conducted at a stop, that stop is considered campaign-related. "Campaign activity" includes soliciting, making, or accepting contributions, and expressly advocating the election or defeat of the candidate. Other factors, including the setting, timing and statements or expressions of the purpose of an event and the substance of the remarks or speech made, will also be considered in determining whether a stop is campaign-related.
Allocating travel expenditures
For a trip which is entirely campaign-related, the total cost of the trip is a qualified campaign expense and a reportable expenditure. If a trip includes both campaign-related and non-campaign-related stops, the portion of the cost of the trip allocable to campaign activity is a reportable qualified campaign expense. Such portion shall be determined by calculating what the trip would have cost from the point of origin of the trip to the first campaign-related stop, and from that stop through each subsequent campaign-related stop back to the point of origin.
Candidate’s spouse and family
Travel expenses of a candidate's spouse and family when accompanying the candidate on campaign-related travel may be treated as qualified campaign expenses and reportable expenditures. If the spouse or family members conduct campaign-related activities, their travel expenses will be treated as qualified campaign expenses and reportable expenditures.
Presidential candidate committees are required to maintain appropriate records for non-commercial travel. Commission regulations also require candidate committees to obtain and keep copies of any shared-ownership or lease agreements, as well as the pre-flight certifications of compliance with those agreements. See 11 CFR 9034.7(b)(3)-(5).
Presidential primary candidates who receive matching funds may engage in joint fundraising with other candidates, political committees or unregistered committees or organizations.
Contributions received as a result of a candidate's participation in a joint fundraising activity may be:
- Submitted for matching purposes in accordance with the requirements for matchable contributions and the Federal Election Commission's Guideline for Presentation in Good Order;
- Used to pay a candidate's net outstanding campaign obligations;
- Used to defray qualified campaign expenses;
- Used to defray exempt legal and accounting costs; or
- If in excess of a candidate's net outstanding campaign obligations or expenditure limit, used in any manner consistent with the general rules for using campaign funds, including repayment of funds to the U.S. Treasury.
The following are examples of disbursements that are not qualified campaign expenses:
- Expenditures in excess of any of the public funding spending limits;
- General election and post-ineligibility expenditures;
- Expenses incurred before the candidate’s date of ineligibility for goods, services or property to be received after the date of ineligibility or to benefit the candidate’s general election campaign;
- Civil or criminal penalties paid pursuant to the Federal Election Campaign Act;
- Payments made to the candidate (other than to reimburse advances);
- Payments (including transfers and loans) to other committees authorized by the same candidate for a different election;
- Payments for expenses subject to allocation against a state spending limit that lack documentation to permit the allocation to that state; and
- Lost, misplaced or stolen items. Factors considered by the Commission in making this determination include, but are not limited to, whether the committee demonstrates that it made conscientious efforts to safeguard the missing equipment; whether the committee sought or obtained insurance on the items; whether the committee filed a police report; the type of equipment involved; and the number and value of items that were lost.
Statutory provisions require candidates to repay matching funds used to restore amounts spent on nonqualified campaign expenses. After the campaign, the Commission audits each candidate's committee to ensure that funds were not misused A repayment may be required if the Commission determines that a committee incurred nonqualified campaign expenses by spending in excess of the limits, by using public funds for expenses not related to the campaign or by insufficiently documenting the expenditure of public funds.