FEC Asked About Use of Pence’s State Campaign Funds

By Kenneth P. Doyle

The Federal Election Commission is set to rule on a new request regarding how Vice President-elect Mike Pence can use more than $1.4 million in contributions left over in his Indiana state campaign committee following the November election.

Pence, who was elected as Indiana’s governor in 2012, abandoned a bid for re-election to that post last summer, when he was named as Donald Trump’s running mate on the Republican presidential ticket.

After Pence joined the ticket, Pence’s state campaign committee refunded much of the more than $12 million in contributions received before that event, but it still has cash on hand that was raised under state campaign finance rules, according to the new advisory opinion request (AO 2016-25). The state rules are far more permissive than federal “hard money” rules.

The request to the FEC came from the state campaign committee’s attorney, Matthew Morgan of the law firm Barnes & Thornburg in Indianapolis. Morgan asked how Pence’s state campaign money can be used without violating federal campaign finance law.

‘Soft Money’ Ban

The FEC is required to respond to an advisory opinion request within 60 days after the request is reviewed and accepted by the agency for a ruling. The Pence request is expected to receive a response by mid-February. The votes of at least four of the six FEC commissioners are required to approve any final ruling.

Federal law and FEC regulations restrict a federal candidate or officeholder from raising and spending unlimited “soft money”—including large individual contributions and money from corporations and unions.

Pence’s state campaign account has received millions of dollars in contributions from the RGA Right Direction super political action committee funded by the Republican Governors Association, as well as individual contributions of $100,000 or more from billionaire David Koch and several others. Individual contributions to a federal candidate, meanwhile, were limited to $2,700 per election in the 2016 election cycle.

In addition to refunding money to the RGA Right Direction super PAC and some other contributors, Pence’s state campaign committee also contributed to other state campaigns. These included the campaign of Indiana Lt. Gov. Eric Holcomb, who replaced Pence as the Republican gubernatorial nominee and won the election in November to be the next governor of Indiana.

Relying on Schock Advisory Opinion

Morgan’s advisory request to the FEC on behalf of Pence’s state campaign committee said that, in refunding contributions the committee received and in making contributions to other campaigns, Pence’s campaign relied on the guidance of a previous FEC advisory opinion (AO 2007-26) issued in 2007 to former Rep. Aaron Schock (R-Ill.).

Schock had asked the FEC about how he could use funds from a state legislative campaign committee after he was elected to Congress. He later resigned his U.S. House seat amid a scandal involving alleged personal use of campaign and official funds.

While the Schock advisory opinion answered some questions about distribution of money from a state campaign committee, it left other questions unanswered, according to new request on behalf of Pence’s campaign.

The Schock advisory opinion does not address the continued management of retained assets in a state campaign account, the new request said. It said Pence’s state campaign committee would like the FEC to clarify whether it may use “non-federal funds” raised under state campaign rules to pay for the storage of assets owned by the state campaign committee, such as files, furniture and a vehicle. The request said none of the assets would actually be used by any active state or federal campaign, but would instead be placed in a storage unit “until disposed of properly” under campaign finance rules and FEC precedents.

The request also asked if Pence’s state campaign committee could use its funds to pay for either legal or accounting expenses necessary to comply with Indiana campaign disclosure requirements.

Finally, the request asked if the state campaign committee could use its funds raised under state law to pay for legal and accounting expenses “typically associated with winding down a campaign committee following the distribution or disposal of assets.”

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.