Clinton faces deadline for loan repayment

An obscure provision of the McCain-Feingold campaign finance law means Hillary Clinton has until the convention to recoup what she's lent her campaign.

Published May 12, 2008 2:11PM (EDT)

Turns out that if Hillary Clinton wants the $11 million she has lent her campaign back, she'll have to raise it by the Democratic convention at the end of August. According to Bloomberg, "a little-known provision of [the McCain-Feingold campaign finanance reform bill] prevents candidates who drop out of the race from raising money after the nominating conventions to repay themselves for personal loans."

There is a way that Clinton can pay off the money her campaign owes to other people. As Bloomberg notes, $23 million has been given to the Clinton campaign, earmarked for the general election. Clinton could ask those donors to give the money instead to her next Senate campaign -- she's up for reelection in 2012 -- and then have the Senate campaign pay off the outstanding debts. (It's not uncommon for one political campaign to donate to another, often for just this sort of purpose.) Because of McCain-Feingold, she could only recoup $250,000 herself through this maneuver, but it would likely mean paying off the rest of the campaign's debt, which is estimated at a total of $20 million, including the money Clinton herself has lent.

Even despite this deadline, Terry McAuliffe, the former Democratic National Committee head who's now Clinton's campaign chairman, recently said Clinton has told him she'd be willing to lend more to her campaign.

All this, of course, will only add fuel to the speculation that Barack Obama's campaign may help the Clinton camp retire its debt, something that's not uncommon at the end of a primary run.

Update: Given the reticence some Obama supporters -- including those in our letters section, apparently -- would have about money they've donated to his campaign being used to help Clinton pay off her campaign's debts, Salon's very own Walter Shapiro makes an interesting point in an article on the site today. He writes:

If money matters to the Clintons (and despite Bill's buck-racking that remains a questionable proposition), a quick exit would allow the Obama campaign to step in to erase Hillary's campaign debts, which could be as much as $20 million. There is an easy way to do this without taking a penny from the Democrats' efforts against John McCain. And that would be for Obama to urge his high-roller donors who have "maxed out" (that is, given the legal limit of $2,300 to the Illinois senator for the primaries) to do the same for Clinton, which would be permissible until the Democratic Convention.

By Alex Koppelman

Alex Koppelman is a staff writer for Salon.

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