Could Gov. DeSantis use $100M reelection money in presidential race?
MIAMI - Few people noticed when the Federal Election Commission deadlocked last month over whether US Rep. Byron Donalds of Florida in 2020 had broken a law intended to keep money raised for a state campaign out of federal elections.
But election lawyer Brett Kappel closely followed the case, and he immediately thought of one person who could benefit greatly from the outcome: Ron DeSantis.
The Florida governor is shattering national fundraising records as he seeks a second term, attracting gobs of money from Republican donors eyeing DeSantis as a potential presidential candidate in 2024. At the end of May, DeSantis was sitting on $111 million -- more money than any candidate has ever needed to win an election in the Sunshine State. More donations come in almost every day.
Kappel believes that the FEC's inaction against Donalds could give DeSantis a blueprint for how to raise money for a prospective presidential campaign while still running for governor.
"Every time the FEC deadlocks on one of these innovative financial structures, it's a big neon sign saying, 'Do this! You can get away with it!'" Kappel said.
Publicly, DeSantis has dismissed questions about his future political ambitions. "Nice try," DeSantis recently told "Fox & Friends" when asked if he would mount a campaign against former President Donald Trump.
But the governor's political team has already identified ways to turn the massive war chest DeSantis has raised for his reelection race into money that could be spent in a federal campaign, a source with knowledge of those conversations told CNN.
"It can be done," the source said.
As momentum builds for DeSantis to run for president as soon as next year, he is collecting donations from every corner of the Republican Party, from the wealthiest donors to everyday watchers of Fox News in each state. He has received millions in donations from Trump's biggest financiers, such as Home Depot co-founder Bernie Marcus, powerhouse Republican backers Richard and Elizabeth Uihlein, and retired venture capitalist William Buckley, but also from megadonors who have never financially supported Trump, such as Ken Griffin, the billionaire who recently announced he was moving his investment firm Citadel from Chicago to Miami.
An individual involved in Republican fundraising in Florida said the expectation is DeSantis will raise about $200 million this cycle, and he will need less than half of it for his reelection campaign. That will leave DeSantis with at least $100 million in seed money for a super PAC to support a White House bid, giving him a financial head start that at the moment is only rivaled by Trump's own fundraising machine. Trump's Save America PAC had $106 million in its coffers as of May.
"I think that's totally the plan," the individual said. "It would be ludicrous of anyone to try to dissuade you that it's not what's happening."
DeSantis' campaign did not respond to a request for comment.
'DeSantis will be able to do what he wants'
Unlike donations to a candidate's campaign, there are no caps on contributions to super PACs. As it is, super PACs have become a key cog in the election efforts of most serious presidential contenders. There are still some limitations on super PACs (for example, they can't raise money from federal contractors or foreign nationals), but the laws are tested and stretched each election cycle.
On paper, the law discourages candidates from turning money raised for a state race from supporting a federal campaign. But the FEC, divided between three Republican commissioners and three Democrats, hasn't demonstrated an appetite for pursuing complaints against super PACs that violate the spirit of that law, said Daniel Weiner, a former lawyer for an FEC commissioner and now at the Brennan Center for Justice.
"A lot of this falls into the gray area, and the rules are only as strong as the people enforcing them," Weiner said. "For the last decade plus, enforcement has been pretty weak. ... As long as he does not blatantly violate the law, DeSantis will be able to do what he wants."
The particulars of Donalds' case before the FEC are strikingly similar to the situation DeSantis could find himself in next year.
In Florida, candidates often choose to fundraise through state-registered political committees. Much like super PACs, there are no limits to how much a state political committee can receive from any single entity, be it a person, corporation or dark money group.
In 2019, Donalds formed a state political committee called Friends of Byron Donalds and started raising money. Early in 2020, Donalds resigned as chairman of the committee and three days later filed to run for an open US House seat in southwest Florida.
Around that time, a super PAC called Trusted Conservatives registered with the FEC. When Friends of Byron Donalds closed its doors in June 2020, it sent its remaining reserves, about $107,000, to Trusted Conservatives. For the next three months, Trusted Conservatives spent most of that money on ads supporting Donalds or tearing into his Republican primary challengers. Donalds ultimately won the race by just 777 votes and was elected to Congress that November.
The Campaign Legal Center, an election watchdog, filed a complaint arguing federal committees could not spend money raised for state races. The arrangement also seemed to violate federal rules that prohibit coordination between a super PAC and a candidate, the organization said. The FEC's general counsel agreed and recommended action. Donalds' legal team argued that he had left the political committee months before it disbanded and that he was not involved in directing the money to Trusted Conservatives.
The FEC split 3-3, and the case was closed.
Like Donalds, DeSantis operates a state-registered political committee called Friends of Ron DeSantis. It has raised $115 million this campaign cycle.
Saurav Ghosh, who spent seven years in the FEC's Office of General Counsel, previously thought it would have been "really brazen" for DeSantis to build a super PAC with money collected by his political committee.
"But in view of the Donalds (case), I think certain FEC commissioners have left open a major loophole for that to happen," said Ghosh, who is now a director at the Campaign Legal Center.
The Republican FEC commissioners did not respond to requests for comment.
DeSantis' political team includes Phil Cox, a veteran political operative who ran the super PAC supporting former New Jersey Gov. Chris Christie's bid for the GOP presidential nomination in 2016. DeSantis' campaign, his political committee and the Republican Party of Florida have also combined to spend $21,000 in the past eight months at Dickinson Wright, a Washington, DC, law firm that specializes in advising super PACs.
"DeSantis has built a team that knows how to do this," the individual involved in Republican fundraising in Florida said.
A super PAC named Ready for Ron launched earlier this year to encourage DeSantis to run for president. The committee, formed by longtime Republican consultant Ed Rollins, is unaffiliated with DeSantis, but it is already airing ads on Fox News.
"The most important thing for a presidential candidate is who is running your campaign, but the second-most important issue is who is going to run the super PAC in a legally competent manner," said Scott Reed, the former top strategist for the US Chamber of Commerce. "DeSantis being up this cycle allows him to do a dry run on fundraising. And he's been wildly successful."
Millions coming in, little out the door
Fueling speculation that Desantis is raising money for two campaigns at the same time is the reality on the ground in Florida: He is building an unprecedented cash advantage and so far hasn't tapped into it much.
DeSantis has brought in more money than any gubernatorial candidate in US history that wasn't self-funded, CNN first reported earlier this year, a record that grows each month when fundraising totals are updated. Since the start of June, his political committee has collected hundreds of donations, ranging from $1 to six figures, including $400,000 from the facility management company Florida Care, Inc.; $200,000 from former Illinois Gov. Bruce Rauner; and $100,000 from New Jersey investment company The Portopiccolo Group.
The $130 million his campaign has accumulated in the past four years far exceeds the $90 million that his predecessor, then-Gov. Rick Scott, spent to win reelection in 2014, a record at the time.
Scott, though, was one of the country's least popular governors by the end of his first term and was a primary target of national Democrats, who still saw Florida as a tossup state. Scott needed every dollar he raised plus $18 million of his own money to narrowly win a second term against Charlie Crist, the Democratic nominee.
DeSantis, meanwhile, is the heavy favorite in his bid for another four years in office. National Democrats so far have focused their energy and resources on governor's races in other states such as Georgia, Pennsylvania and New Mexico. No Democratic entity has so far reserved space on Florida's airwaves. DeSantis won't know who is opponent is until after the Democratic primary in late August, and neither challenger, Crist or state Agriculture Commissioner Nikki Fried, have come close to matching DeSantis' fundraising.
At this point in 2014, Scott had already racked up more than $18 million in expenses. DeSantis has spent $7 million this year between his campaign and political committee. He has purchased a modest $1.8 million of commercial time for the fall, but has mostly relied on the free exposure he receives from local and national news outlets and conservative media organizations that often promote his agenda and brand. "Fox & Friends" recently featured the "Top Gun"-inspired campaign merchandise the DeSantis campaign is selling on its website.
It remains possible that by November, DeSantis will have used more money than expected. The source close to his political team said DeSantis wants "a big, blowout election win,"which could be costly to achieve.
The source added that DeSantis has not committed to challenging Trump in a GOP presidential primary. CNN previously reported that the former President has considered announcing his intention to run again from Florida as soon as October, in part to preempt DeSantis and bigfoot his former protege.
"We've heard all of that," the source said. "It does not change our deliberations."
Reed said many donors want to "turn the chapter on Trump" and are placing their early bets on DeSantis as the GOP's best chance in 2024.
"It's clear that DeSantis is building a national finance organization, with great success," Reed said. "Your two best friends in politics are money and message, and he's positioning himself to be in pole position when the gun goes off."
The-CNN-Wire
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