Secretary of Debt

by Amanda Silverman | November 19, 2008

With Hillary Clinton likely to be appointed as Secretary of State in the coming days, what happens to the $22 million in debt she accrued during her run for president? One of her best options for whittling down the debt was rolling it over to her 2012 Senate reelection campaign--an option that would seem to be off the table if she accepts the cabinet post. While she could still file for debt settlement with the Federal Election Commission (FEC), that would forbid her from ever running for public office. So how will she go about settling the “largest presidential campaign debt in history”?

 

Clinton has already swallowed the $13 million that she loaned her campaign from her own money, according to a Clinton aide in a recent Politico report. (In order to get paid back in full, she would have had to pay herself back with the campaign’s money by November 4--which she hasn’t--after which she has up to 20 days to be reimbursed $250,000, according to FEC regulations.) And according to her most recent FEC report, filed October 22 for the month of September, she seems to have taken care of the smaller businesses, like caterers and dry cleaners, that were listed on reports from the summer and early fall. Steven Bledsoe, owner of Dakota Pizza in Wynnewood, PA, who was still owed $5, 933 in June for catering Clinton events, told me last week that he has been paid in full and that it only took “a couple months,” which was no longer than they had expected. “We were thrilled to do it,” he says. “We’re honored to get the work for Senator Clinton. There’s no complaints.”

 

That leaves $8 million in debt, which is mostly owed to big DC consulting firms like the Dewey Square Group ($235,974.28) and Mark Penn’s firm, Penn, Schoen & Berland Associates ($5,279,535.40). Dave Plevan, owner of Electrum Productions, told me last week that the Clinton campaign has already paid back a significant amount of the $301,198.11 listed as owed to his firm on the October monthly report. “A lot of people keep asking me where the money is coming from and I really have no idea,” Plevan says.

 

So where is that $8 million coming from? The campaign, according to the October monthly report, had only $1,127,541 in cash-on-hand. During the September period, the committee received $1,015,161.60 in contributions from individuals and $100,204 from political committees. There doesn’t seem to have been any big Hillary fundraisers since her concession, other than two thrown in August by New Mexico governor Bill Richardson, who boasted to NPR that they raised almost $250,000 for her war chest. Her plan, then, according to an aide I spoke to last week, is to slog along and keep trying to raise the money until all the debt is settled.

 

Though Obama pledged to help Hillary reduce her debt, it doesn’t seem like he has planned any new events or an Internet campaign to help her since she conceded, save when he called on his donors in June to help his former rival. “I don’t think there’s a whole lot of hard feelings, it’s more like mild annoyance,” an anonymous Clinton aide recently told Politico. “There’s just not a lot of expectation they are going to lift a finger for us.” Another Clinton aide, however, expressed their hope that Obama would help now that the campaign is over: “I think everyone was so focused on the election and accomplishing what we needed to do on November 4,” the aide told me last week. “There’s no hard and fast evidence that there isn’t going to be help or that this isn’t going to happen. I can understand the anxiety. I don’t see any big red warning signs that they’re not going to help us.”

 

Without a boost from Obama, and with excitement about her candidacy sure to continue to diminish over the next few months, it looks like Hillary will need a long time to pay back her debts while donations hopefully trickle in. She may even face the same fate as John Glenn, who spent 20 years trying to pay back his $3 million after numerous fundraisers failed to reverse the debt; eventually, he was forced to ask creditors to accept less than full payment, allowing him to officially close the books in 2006. Gary Hart, who also ran unsuccessfully in 1984, sold 92 lithographs by the artist Robert Rauschenberg to try to pay off his debts ($1.3 million for his ’84 campaign and another $313,000 for his run in ’88). Jesse Jackson was able to pay back his 1984 debts by holding a series of appreciation dinners and other small fundraising events--although Clinton’s level of debt far surpasses Jackson’s $350,000.

 

Other 2008 hopefuls like Rudy Giuliani are looking at some debt as well. This summer he agreed to appear at RNC fundraisers to help pay his $3.6 million, but his debt hasn’t diminished much since then, and he still seems to be asking for contributions on his website, as is Chris Dodd. Richardson is steadily chipping away his 2008 presidential campaign debt, still gathering thousands in donations as late as this summer.

 

If Glenn’s experience is any indication, hopefully Hillary has a plan that extends beyond selling DVDs of her convention speech. While being secretary of state could make her a bigger attraction at fundraisers, the job will certainly hinder her availability to coral donors. According to FEC spokesperson Bob Biersack, though there is no campaign finance law that prohibits her from raising money while in a cabinet position, “there may be rules in ethics and government.… There may be all kind of reasons you may not want to be raising money when you’re secretary of state.” And as her husband’s financial dealings come under intense scrutiny this week, Hillary could be asked to suspend all such fundraising for the duration of her potential cabinet tenure just to avoid any appearance of ethical impropriety. If all else fails, she could always pay the rest of the $8 million out of her own pocket--which, in addition to the $13 million she has already dropped, is a hefty price tag for living American history.

 

Amanda Silverman is an editorial web intern at The New Republic.

 

By Amanda Silverman

Source URL: http://www.newrepublic.com//article/politics/secretary-debt