Virginia Candidates Raked in Millions. What Can They Do With What’s Leftover?
This month’s General Assembly elections brought in huge fundraising hauls for candidates. Now November 5th’s winners and losers are left with a difficult decision: how to spend the leftover cash.
Virginia election law gives the former candidates lots of options, ranging from work-related meals at Arby’s to five-figure donations to a favored political action committee.
Winners can dish donations to statewide leaders or key lawmakers who might help their political careers, according to Larry Sabato, director of the University of Virginia’s Center for Politics. Or they can spend it on non-campaign ads, staffing, charity, or Assembly-related meals -- just about anything that doesn’t constitute personal use for the candidate or their family, and that is vaguely related to their work in the General Assembly.
Election law allows similar latitude to candidates who lose. There’s no requirement for candidates who lose to close their accounts, though most do so within a few years to avoid reporting requirements.
“Look, it's a piggy bank,” Sabato said. “And even if you can't use it to benefit yourself directly, you can certainly find uses that benefit you indirectly.”
The last major shift in rules occurred after Democratic Gov. Douglas Wilder’s 1990 inauguration. Wilder refused to say what he did with a $1 million inaugural fund surplus -- a perfectly legal tactic at the time.
“And that's when people realized there was a gigantic loophole with regard to inaugural funds,” Sabato said. Before then, “I don't think anybody paid much attention. I know I didn't.”
Later, when the Internal Revenue Service sought back taxes on the money, Wilder said he spent some of it on his son, Larry. In 2007, the younger Wilder pleaded guilty to unrelated charges stemming from his mismanagement of $170,000 in leftover money from his father’s gubernatorial campaign fund.
In the 1990 session following Wilder’s inauguration, lawmakers revised election laws to explicitly prohibit lawmakers from personally pocketing inaugural or campaign funds.
A handful of Republicans who lost in 2017 have chosen to keep their accounts open.
Former Del. Jackson Miller (R-Manasas), who lost to Democrat Lee Carter that year, dished outover $50,000 to state and local candidates from his campaign and leadership PACs, in addition to paying off $5,500 on Verizon wireless bills since he left office in January 2018.
Former Del. John O’Bannon (R-Henrico), who lost to Debra Rodman in 2017 and was appointed to the State Board of Elections in March, spent $125,000 of his PAC’s money on candidates this year. That includes $40,000 for his wife, Pat O’Bannon’s successful bid for Henrico County Board of Supervisors, and a $50,000 check for GOP Speaker of the House Kirk Cox’s successful re-election campaign.
State law bars Board members from running for office, serving as party chairs or paid campaign staff, but doesn't limit their ability to contribute to political candidates.