Mitt Romney’s presidential campaign has no shortage of money, but a Federal Election Commission filing to be released on Thursday will show the campaign $15 million in debt, according to news reports.
The Romney campaign needed a $20 million loan last month to get through the primary season because the bulk of its remaining funds were earmarked for the general election and could not be spent until Romney accepted the Republican nomination on Aug. 30. The campaign quickly repaid $5 million to the Bank of Georgetown after Romney’s nomination, but its end-of-August report to the FEC will still reflect $15 million in debt.
Romney’s campaign has paid back another $4 million this month and will pay off the remainder soon, according to the National Review Online, the first outlet to report the loan.
The loan is one example of how campaigns can legally work around FEC spending limits. Romney’s campaign, flush with cash it could not yet spend, used its general-election money as collateral to secure a massive loan that it could spend during the primary.
“We realized that we could collateralize this debt with $20 million of general-election funds that were already sitting in our bank account,” a Romney aide told the National Review Online.
An FEC spokesperson confirmed there is no regulation prohibiting the use of general-election money as collateral on primary-election loans. Campaigns can use general-election money to repay such loans, provided they receive permission to redesignate general-election contributions from donors who did not reach their legal limits during the primary. Alternatively, the Romney campaign could pay off the loan by raising new money that donors designate for the primary, even though the primary election is over.
Romney’s joint fund-raising committee has raised more than $100 million in each of the last three months and had $168.5 million on hand at the end of August. President Obama’s joint committee has not disclosed its cash on hand, but it had $62 million less than Romney’s at the end of July.
Romney was not free to use the extra cash as he pleased, however. An individual donor can give as much as $5,000 to a presidential candidate but can direct no more than $2,500 to either the primary or the general election.
Such divisions of large gifts apparently left Romney, near the end of the primary, unable to use much of the money he had raised.