As Ohio Senate candidate J.D. Vance fell far short of his Democratic opponent Tim Ryan in recent campaign donations, one of the Republican’s chief fundraising vehicles says it prioritizes paying off the campaign’s debt from the May 3 primary he won.
The campaign’s biggest creditor: Vance himself.
He loaned his campaign $700,000 for the primary, Federal Election Commission filings show. And because of a Supreme Court decision in May, in a case brought by Texas GOP Sen. Ted Cruz, Vance and others who loan their campaigns big money have more flexibility to get contributors to pay them back, campaign finance experts said. The court case seems also to have spurred some past candidates, such as former California Democratic Rep. Harley Rouda, to inquire about paying off old loans, filings show.
The Cruz case may have sweeping consequences on the campaign trail, giving wealthy candidates a new advantage, while also stirring up old debts of candidates past and present.
Vance Victory, a joint fundraising committee that splits donations between Vance’s Senate campaign and two other committees, states in its formula for dishing out donor funds that the first $2,900 of an individual contribution would be “designated for 2022 Primary Election debt retirement.” The next $2,900 would go to Vance’s campaign for the general election, with the next $10,000 to the Ohio Republican Party and the following $5,000 to Working for Ohio, Vance’s leadership political action committee.
Vance’s campaign declined comment.
In addition to the $700,000 that Vance lent his campaign for use in the primary, the campaign owed $183,000 to campaign vendors and supporters, such as $372 in travel costs owed to the campaign fund of Missouri Sen. Josh Hawley, according to a recent FEC filing.
The joint fundraising committee “could raise funds to retire primary debt, including debt owed by the campaign to the candidate,” said campaign finance lawyer Brett Kappel.
Vance, who was endorsed by former President Donald Trump in his bid for the seat being vacated by GOP Sen. Rob Portman, had $628,000 in his campaign account on June 30 after raising $1 million from April through June. Ryan, meanwhile, had $3.6 million after raising $9.1 million, filings to the FEC last week showed.
Vance Victory sent out a fundraising appeal since those reports came in asking donors to help him close the fundraising gap with Ryan. Inside Elections with Nathan L. Gonzales rates the Ohio Senate race as Solid Republican.
Kappel noted, though, that some uncertainty remained after the Cruz decision, which declared unconstitutional a 2002 law that barred candidates from raising campaign funds to repay candidate loans in excess of $250,000 after an election, including a primary, has already happened.
“The FEC has not adopted any regulations or guidance to candidates in light of the Supreme Court case,” Kappel said.
Prior to the Cruz decision, a campaign could not seek donations to pay off mega candidate debts to themselves.
The decision “gives candidates new flexibility in lending, on fundraising and it doesn't subject them to arbitrary limits on how much they can get repaid from their own campaign,” said campaign finance lawyer Jan Baran, who represented Senate Minority Leader Mitch McConnell’s challenge to the overall 2002 campaign finance law, known as McCain-Feingold.
Joint fundraising committees are a common tool for candidates and party committees to haul in big donations for multiple entities, allowing a donor to write one large check. Then, the joint fundraising committee doles out the donations in accordance with donation limits. Such committees have a formula, like Vance Victory, but campaign finance experts say that donors may override those formulas and specify how they want their donations split, so long as it complies with federal donation limits.
Because the Cruz case took away limits on the amount of money a campaign may repay a candidate, campaign finance experts say even long-ago candidates may seek to get their personal funds reimbursed.
“Before the Cruz case, they were strictly limited to how much they could raise to repay themselves. Now there are no limits,” said former FEC Commissioner Michael Toner, who chairs the election law and government ethics practice at the firm Wiley. “There are growing indications of efforts to apply the Cruz case retroactively, from candidates who ran in 2018, 2016, 2010 or before.”
Rouda, who lost his seat in 2020 to Republican Michelle Steel, has asked the FEC to allow his campaign to repay his old loans. Former Republican Rep. John Ratcliffe of Texas, who left Congress to become director of national intelligence in the Trump administration, seems to be setting the stage to get reimbursement of an old loan. In a recent FEC filing, he said he was reversing a 2013 transaction that converted part of a $350,000 campaign loan into a contribution because that was required under the law that the Cruz decision struck down.