Rep. Braun repeatedly loaned his campaign amounts to identical to previous debt retirement payments in method that’s been referred to as a “legal form of money laundering”
INDIANAPOLIS – In addition to lying to Hoosiers for months about not loaning his campaign additional funds after the May primary, Rep. Braun appears to have used some of those loans to skirt campaign contribution laws in a practice that’s been described as a “legal form of money laundering.”
Rep. Braun made debt retirement a focus of early fundraisers when he insisted he was done self-funding, and as the Indianapolis Business Journal reported today, Rep. Braun did make several debt retirement payments from his campaign to his personal account, totaling approximately $93,000. But within a week of each payment, Rep. Braun made loans to his campaign that were the exact same amount as the debt retirement payments.
It’s illegal to use funds intended for debt retirement to pad a candidate’s campaign accounts, but Rep. Braun appears to have used his personal wealth to get around the law. Using such a loophole allowed him to raise double the maximum contribution limit from wealthy donors who, in addition to maxing out to his campaign, could also write a $2,700 check towards his debt retirement – which he could then immediately loan back into his campaign account.
From the Indianapolis Business Journal: Braun appears to use finance gimmick to free up more money for campaign
Republican U.S. Senate candidate Mike Braun continues to pump his own money into his campaign, and appears to be engaging in the controversial but legal practice of using donations for retiring debt from his primary race to boost his general election campaign.
Since the May 8 primary, Braun has indicated that he has shifted from that strategy and has been attending out-of-state political fundraisers. In a press release sent earlier this month, Braun touted raising $2.5 million in the second quarter,including $1.5 million since the primary “without personal contributions or loans.”
Braun indeed raised nearly $1.5 million since the primary, but he has also loaned the campaign about $350,000 since then. From April 19 to June 30—the dates of the latest campaign finance report—he has loaned the campaign nearly $1 million.
In the same time period, Donnelly raised $1.7 million without any personal loans or contributions. Donnelly has nearly $6.4 million cash on hand, while Braun has about $1 million.
About $270,000 of the donations Braun received from individuals and political action committees in this time period were intended for primary debt retirement.
Federal campaign finance law allows donors who did not max out their primary election contributions to donate up to $2,700 for debt retirement in addition to the $2,700 they are allowed to give for the general election. PACs are allowed to give up to $5,000 for debt retirement if they didn’t already max out during the primary, and an additional $5,000 for the general election.
The Federal Election Commission requires that donations made for debt retirement be used for that purpose, but Braun may be working around that rule.
Braun reported paying a total of about $93,000 in donor contributions intended for his primary debt in four payments made between May 29 and June 25, and then within several days he personally issued his campaign new loans for the same amounts.
On May 29 and June 4, Braun repaid $53,104 in debt in two payments, and then on June 5, he loaned the campaign $53,104.
On June 14, he repaid $15,809.10 in debt, and then loaned the campaign the same exact amount four days later on June 18.
On June 25, he repaid $24,432.25 in debt and on the same day loaned the campaign the same exact amount.
The accounting gimmick could allow wealthy donors to effectively double their contributions for the general election from $2,700 to $5,400 if they give the maximum amount for primary debt retirement and the maximum amount for the general election—and many donors have done so.
Braun spokesman Josh Kelly declined to comment on fundraising strategies.
Michael Feldman, spokesman for the Indiana Democratic Party, criticized Braun for the practice.
“Not only has Rep. Braun been lying to Hoosiers for months about not-self funding in the general election, but it appears he’s skirted campaign contribution laws to raise double the legal limit per election from his special interest donors,” Feldman said in a statement. “It’s simply the latest example that he’ll do whatever he can to extract every last dollar for himself with complete disregard for rules or ethics.”
The move is similar to what Matt Rosendale, the Republican U.S. Senate candidate in Montana, recently did.
Brendan Fischer, an attorney with the nonpartisan Campaign Legal Center, told the AP that Rosendale’s actions were “a legal form of money laundering in order to help a handful of wealthy donors get around federal contribution limits.”