Introduction
According to some commentators, it is a tradition for the winner to assist in "retiring the debt" of the loser. Others argue that it could form part of a reconciliation gesture, yet others disagree. It’s time to dispel these rumors before they become a major concern.
If you read below, I will try to outline some of the issues and propose a solution which might be controversial for some, but may help to bring the party together for the election.
Background
Previous filings by the Hillary Clinton campaign indicated a combined loan and creditor debt on the books of over $10M. Reports in the media indicate that her campaign has confirmed a further personal loan by the Senator of $6.4M.
Assuming that some or all of the previous debt remains unpaid, and that the recent loan indicates a further assumption of debt by the campaign, there will likely remain a considerable debt owing should Hillary Clinton decide to concede the nomination to Barack Obama.
Precedent and the Present
Some comments I have read, indicate that there is a tradition for the winner in a hotly contested primary to assist in "retiring the debt" of the other candidate. I wasn’t able to prove this to be the general case, nor did I find evidence to the contrary.
However, regardless of tradition, this election has seen a remarkable transformation in the way funds are raised. Instead of a few wealthy hardcore donors maxing out their contributions, we have seen unprecedented mass financial support from "real people".
In addition to legal regulations, candidates have a moral obligation to ensure the donations are used in a manner for which they were intended. As this has been a close and hard fought battle, there have naturally been those who fervently support one candidate over another. There is a danger that using funds already donated to support another candidate could disappoint some donors.
Legal Arguments
I was originally going to outline the legal arguments surrounding such contributions under Chapter 11.Part 116 of the Code of Federal Regulations(2007), the Federal Election Campaign Act (1971), the Bipartisan Campaign Reform Act (2002) and an interpretation of a series of Advisory Opinions by the FEC regarding debt retirement. If you do wish to read all 900 pages or more of legal gobbledygook, a good place to start is http://www.fec.gov/... However, in the end, I felt the legal position is somewhat moot.
A Possible Solution
There are times when a hug is better than a rebuke. For all the seeming bitterness that has surrounded the nomination contest, many suspect this is but a drop in the ocean to what lies ahead for the general election.
Despite some disagreements, Hillary and Obama supporters are united in their belief that we cannot afford another Republican administration furthering the war in Iraq and destroying the economy.
I have listed a few of the options facing Hillary, should she concede the nomination:
Option 1:
Hillary terminates her campaign committee, effectively ceasing to raise further funding and agreeing with her creditors to write off the outstanding debt on the books.
Option 2:
Hillary does not terminate her campaign committee until the election and spends considerable time raising additional funds from her wealthy donors to help pay off some of the debt.
Option 3:
The Obama campaign agrees to assume Hillary’s debt as a reconciliation gesture.
A straight fund or debt transfer between campaign committees is fraught with issues and liable to strict maximums imposed by the FEC. It would have been easier if the sums were around $200K, but $10M+ may be too much. Even if democrats agreed, Republicans could mount a legal challenge just to throw a spanner in the works.
Option 4:
Hillary does not terminate her campaign committee until the election but after conceding the nomination to Obama, raises funds across all democrats (including Obama supporters) to help repay the debt.
Think about it. What better gesture could be made to show the unity of the party than to help one of its own? It would also send a strong message to any Republicans who are no doubt counting on exploiting divisive attitudes in the party to boost their ranks and promote their candidate.
Could it work?
Legally: From my inexpert interpretation of the FEC rules, as long as her campaign committee is not officially terminated, it is able to continue to raise funds to pay of outstanding debts until the election.
Technically: The donations could be made directly to either Hillary’s site, through a dedicated page on Obama’s site, or perhaps through a respected intermediate site. There are people on Kos and elsewhere far better than I who could advise on the best option.
Financially: Let’s assume that between Obama and Hillary there are over 2M individual donors to date. Assume also that 25% of Obama and Hillary supporters were willing and able to participate in helping Hillary. That makes over 500,000 democrats contributing a small sum for the good of the party.
As a symbolic gesture, the sum to be donated each could be $20.08.
$20.08 x 500,000 = $10M.
Conclusion
Though it may not be enough to cover all the debt, the symbolic gesture is priceless and it covers the majority of what she owed up to NC & IN, where if she’d won convincingly, she might have had a chance at the nomination.
I am not suggesting this concept should be used in any way to entice Hillary to concede, that is her decision alone. If she wishes to continue campaigning until June, so be it.
However she should know that despite any differences in political outlook, we recognize the valuable contribution she has made in helping to grow the Democratic Party base and consider her a vital asset in helping to win the General Election for the Democrats.
CT
P.S. Since I started writing this there have been 3 other diaries that included mentions of this in some form, so it's obviously on people's minds. I hope this diary adds something valuable to the discussion.
P.P.S
This diary is intended as a serious and constructive consideration of an issue that is surfacing on the boards. Please refrain from using the comments section for ad-hominem attacks on either candidate. Unless you have a worthwhile comment to make, I’d prefer you create your own diary or comment elsewhere.