Herman Cain Quit Race, But Can Still Spend Funds With Little Restriction
WASHINGTON -- On Saturday afternoon embattled presidential candidate Herman Cain announced the suspension of his campaign amid allegations of sexual harassment, assault and adultery. The suspension raises immediate questions about what the candidate can do with the millions of dollars in campaign funds that the Cain campaign claimed to have raised in the past two months.
The Cain campaign only raised $4.6 million through the first six months of his candidacy, but as he rose in the polls in October, the campaign announced major fundraising success. The campaign claimed that it raised upwards of $9 million in October and millions more when the first allegations of sexual harassment surfaced.
Now that he is withdrawing from the race, there are few limits on what Cain can do with this money.
"There's a couple of things [former candidates] can do with [leftover funds]," Paul S. Ryan, the FEC director for the Campaign Legal Center, told The Huffington Post. "They could refund them to contributors if they want to. They could convert their principal campaign committee into a non-standard candidate-type PAC."
Cain indicated his intention to play a role as a political figure in the future and announced the launch of TheCainSolutions.com during his suspension announcement. The most likely route to do this would be through converting his presidential campaign into a PAC. Cain could continue to pay for buses, consultants, websites, travel and lodging expenses through a PAC. He could also make contributions and independent expenditures to support like-minded candidates for office. There are also few restrictions on continued fundraising by Cain's campaign, particularly if he converts it into a connected PAC.
"The only restriction on what he cannot do is he cannot convert [funds] to personal use," Ryan said. "He can't say, 'I'm gonna buy myself a new beach house.' He cannot do that." And this personal use restriction would still apply to funds transferred from a presidential campaign committee to a PAC.
Cain's campaign previously came under fire for buying copies of his book and paying campaign funds to a company that he controls called T.H.E. New Voice. Most of these payments would be acceptable so long as they are for market value.
Ryan explained that purchasing books requires the candidate to work out a deal with their publisher to avoid the receipt of royalties from books purchased with campaign funds, however: "The bottom line is you cannot get any royalties from the purchases of your book with funds from your campaign."