As Biden drops out of race, who gets $96 mn in his campaign account?

By Bill Allison and Amanda Gordon

President Joe Biden is out of the race, but his campaign still has nearly $96 million left in the bank.
 

Vice President Kamala Harris, who has mounted her own White House bid under what used to be the Biden-Harris campaign, has access to that cash. If another candidate emerges, that person would likely have to start fundraising from $0.

But the recent disarray within the Democratic Party means that any candidate will enter the race at great financial disadvantage to Republican nominee Donald Trump, who’s seen a surge of billionaire interest while deep-pocketed Democrats had frozen their money to force Biden out.

 

Here’s how the campaign cash flows now that Biden has bowed out of the race:

How much money does the Biden-Harris campaign have on hand?

The Biden-Harris campaign, the Democratic National Committee and state parties collectively had $240 million in the bank at the beginning of July, with $96 million of it directly under control of the campaign, according to the most recent filings. That committee has officially rebranded as “Harris for President,” according to a Federal Election Commission filing.

Harris now has access to that money, but she’ll need to ramp up fundraising that has slowed to a trickle in recent weeks. In June, the campaign spent 93 per cent of what it brought in, a sign that the Biden-Harris strategy of expensive field offices and large advertising buys may be more than the campaign can afford.

How can that money be used?

It depends on who emerges from this chaotic situation created by Biden’s departure. As the vice presidential nominee when the campaign began, Harris is on the official campaign paperwork and can use the funds for her own run. If a different nominee is ultimately chosen, what’s left in the account could be transferred to the Democratic National Committee, or donated to an outside spending group like a super political action committee. 

Candidates have more leeway to work with their political parties to direct spending on advertising. Candidates can’t coordinate ad spending with super PACs, but they can consult on get-out-the-vote efforts.

What would a new candidate have to do?

If Democrats choose a candidate other than Harris, such as a governor, that individual would have to start his or her campaign from scratch. If a member of the House or Senate is chosen, leftover campaign funds from prior elections could be transferred to a presidential committee. Anyone else would have start running with a bank balance of zero, complicating efforts to stand up a campaign and hire staff.

Campaigns are allowed to borrow money provided that they disclose the lender and the terms of loan. The DNC could loan a new candidate’s campaign money. The Amalgamated Bank, which serves as the main banker for the Democratic Party, has given loans of as much as $20 million to party committees. It too could offer a loan that would allow a campaign to get up and running more quickly.
 

What do donors want?

For donors, the bottom line has been beating Trump. Democrats poured more than $1 billion into Biden’s campaign coffers in 2020, and hundreds of millions more into super PACs to get Trump out of the White House. The problem for deep-pocketed donors is how they go about that with a little more than four months left before election day.

Mike Novogratz, the billionaire founder of Galaxy Digital Holdings who was among the first round of donors calling for Biden to step aside, said he wants an open nominating process. He also has started an effort to raise money for a Biden successor.

“This is a good step in the process, and it had to happen,” he said in an interview Sunday. “I put some money in already, and we will see what comes out of the next 10 days.”

If there’s an open convention, donors might split in the run-up to it over who should be the successor. George Soros, one of the biggest donors to Democrats, will back Harris, according to a spokesman.

Donors don’t have much time to unite behind a candidate: the Democratic National Convention to nominate the ticket starts in Chicago in less than a month.

How does this compare to Trump and the Republicans’ financial status?

Trump and super PACs supporting have seen a surge of support in recent weeks, with major donors including billionaires Elon Musk and Paul Singer and investor Timothy Mellon either donating or pledging support. The Trump campaign and the Republican National Committee had $285 million in the bank at the end of June, $45 million more than Biden’s operation.

Republican donors have unified around Trump, who’s also drawing support from individuals who’ve previously donated to Democrats. Pershing Square’s Bill Ackman has endorsed him, while Jacob Helberg, a Palantir executive who donated $250,000 to a pro-Biden super PAC in 2020, is now donating to Trump.