AO 2007-03: Private contributions do not preclude public funding

Senator Barack Obama’s 2008 presidential campaign may solicit and receive private contributions for the general election, yet retain the option to refund those contributions and accept public financing if he receives his party’s nomination for President.

Background

Senator Obama’s principal campaign committee, Obama for America, (the Committee) has begun to solicit and receive private contributions for both the 2008 primary and general election campaigns. However, Senator Obama has indicated that he will consider accepting public financing for the general election campaign if the Republican candidate agrees or independently decides to accept public funding.

Senator Obama proposes to deposit contributions designated for the general election in a separate account. Only the Committee’s treasurer and its chief operating officer will have access to the account. Funds in that account would not be commingled with funds from other accounts and would not be used for any purpose whatsoever, until Senator Obama decides whether to accept public funds. If he decides to accept public funds, he will return all of the general election contributions in full to the contributors.

Analysis

Major party nominees accepting public funds for the general election must certify that they have not accepted and will not accept any private contributions, with limited exceptions. 11 CFR 9003.2(a)(2).

Senator Obama’s proposal is similar to the permissible practice of fundraising for the general election by candidates for the U.S. House of Representatives and Senate who have not yet won their primary elections. While candidates may raise funds prior to receiving the nomination of their party, if they do not participate in the general election they must refund all contributions designated for that election within 60 days from the date that such funds become impermissible. See 11 CFR 102.9(e)(3), 103.3(b)(3), 110.1(b)(3)(i), (b)(5), 110.2(b)(3)(i), (b)(5), and Advisory Opinion 2003-18.

The Commission concludes that Senator Obama may solicit and receive contributions designated for the 2008 general election without waiving his eligibility to receive public funds for the general election under the facts presented in the advisory opinion request, in which (1) those funds are kept in a separate account, (2) only the committee treasurer and its chief operating officer will have access to the account and (3) the funds in the account will not be used for any purpose.

If Senator Obama opts to receive public financing for the general election, he must refund all contributions designated for the general election in full within 60 days after he certifies his eligibility to receive such funds with the Commission under 11 CFR 9003.2(a)(2).

Any interest earned on funds in Senator Obama’s general election account must be disgorged to the U.S. Treasury within 60 days after Senator Obama certifies his eligibility to receive public funds under 11 CFR 9003.2(a)(2). However, interest earned may be used for bank or merchant fees related to that account.

Date Issued: March 1, 2007; Length: 7 pages.