Advertisement

Kevin De León has millions in state political accounts that he can't use for U.S. Senate campaign

Kevin De León has millions in state political accounts that he can't use for U.S. Senate campaign
State Senate leader Kevin de León greets supporters during an event held to formally announce his run for U.S. Senate on Wednesday in Los Angeles. (Robert Gauthier / Los Angeles Times)

When California Senate leader Kevin de León launched a run for the U.S. Senate last week, he had $3.8 million in campaign cash and a big problem: The money was raised for state contests and can’t just be rolled into his effort to replace Sen. Dianne Feinstein in 2018.

Federal law prohibits transferring funds raised for state committees into a campaign for U.S. Senate.

Advertisement

Legal experts and political strategists say there are legal, though heavily restricted, ways that some money raised for state campaigns could end up helping De León (D-Los Angeles) with his quest for Washington, but the path is fraught with potential controversy as opponents will scrutinize every move for a possible complaint to the Federal Election Commission.

What he can and can’t do

De León acknowledges there are obstacles and says he is focused on raising new contributions to the campaign he just launched.

He starts from scratch while Feinstein has raised some $4 million for her reelection and has personal wealth that would allow her to spend millions of dollars of her own money if she decides it is needed.

“I have to do my due diligence, and I’m going to have to raise money,” De León told reporters after he kicked off his campaign with a rally Wednesday. “I’m going to have to rely on folks who want to invest in my campaign. I do not have the ability to pick up a pen and write myself a personal check, obviously.”

Contributions to state campaigns cannot be used in races for Congress, in part because federal laws have a very strict prohibition on corporate money where state laws do not.

There are also different limits on how much can be given by individuals. A campaign for U.S Senate can accept no more than $2,700 from each individual supporter, but a campaign committee De León had set up for an abandoned race for lieutenant governor accepted contributions of up to $14,600 annually from individuals.

Feinstein campaign officials have already sought their own legal opinion indicating the restrictions on De León’s existing money and are watching his handling of campaign fundraising with an eagle eye.

“He is in a horrible box of his own creation,” said Bill Carrick, Feinstein’s longtime political advisor.

There is wiggle room

Until De León became a federal candidate, he also was able to use money from his lieutenant governor campaign to conduct polling on his statewide popularity, send out mail, create databases of supporters and pay for travel all over the state to speak to groups and voters. His state committee has reported tens of thousands of dollars paid to polling firms and for travel expenses during the last year.

“Presumably he tested his name ID and his strengths and weaknesses, and that’s going to benefit his Senate campaign,” said Jim Sutton, a campaign finance attorney whose clients have included Sen. Kamala Harris when she ran for state attorney general.

De León also could generate goodwill for his candidacy by giving leftover funds from his abandoned lieutenant governor campaign to civic groups and charities.

He had $886,000 left in a state Senate reelection campaign account at the last filing period, and that money could be used to cover expenses of holding state office until he leaves at the end of 2018. Such expenses include mailers on issues and hosting workshops. He just has to make sure expenses cannot be seen as promoting his candidacy for federal office. Sutton warned that such spending would be scrutinized for its true purpose.

Though there are no such plans currently in the works, De León could use funds from his Believing in a Better California ballot measure committee to launch a proposition that highlights one of his priority issues, such as climate change or healthcare. That would raise his visibility with voters.

There are restrictions on such ballot measures — the candidate cannot be promoted in ads for the measure, for example — but many other politicians, including former Govs. Gray Davis, George Deukmejian and Arnold Schwarzenegger, have used ballot measures to boost their own political stock.

Advertisement

Lt. Gov. Gavin Newsom formed a ballot measure committee called Safety For All that last year spent $4.5 million for Proposition 63, a gun control initiative. That spending, and the press coverage he got from sponsoring the proposition, introduced him to millions of Californians who might not have known him before.

De León would be restricted to only using funds from individuals that were raised under the federal contribution limits, and federal officials may limit his financial role to qualifying the measure for the ballot, some experts said.

“That money is not going to go to waste,” campaign finance attorney Fred Woocher predicted of De León’s state funds. “I would think it will end up being used in a way that is helpful to his candidacy, even if it is not the most helpful way of supporting his candidacy.”

Super PAC question

Meanwhile, political strategists Maclen Zilber and Dave Jacobson have created a super PAC called A Progressive California that supports De León and already is raising money as a parallel but uncoordinated effort from liberal donors.

The super PAC, which does not face the $2,700 limit on individual contributions, has already produced a video ad and sent it to delegates of the state Democratic Party who may vote on endorsements. The video’s message echoes De León on the campaign trail: “Washington’s status quo has failed” to sufficiently fight back against President Trump.

Jacobson said it is unclear whether the super PAC can accept money from De León’s state committees. The legal issue may have to be resolved by federal authorities or courts, some attorneys said.

Federal law restricts contributions by candidates to super PACs that support them with an eye toward making sure each committee keeps “its independence, which is required by law,” said Corey Goldstone, a spokesman for the nonpartisan Campaign Legal Center based in Washington.

A legal opinion drafted for Feinstein’s campaign by attorney Jonathan Berkon concluded De León must divide his leftover funds into “federally permissible funds” — those lacking corporate money and meeting contribution limits — and “non-federal funds.” Only the federally permissible funds may be donated to a super PAC, subject to limits, Berkon concluded.

Jacobson said the political action committee is getting plenty of support without taking any of De León’s state-raised cash.

Advertisement

Feinstein is supported by a separate super PAC, formed by the consulting firm SCN Strategies, which has worked for Gov. Jerry Brown.

“As we’ve seen in California, historically it’s not necessarily the one with the most money at the end of the day who wins,” said De León campaign spokesman Roger Salazar. “It’s who can get traction with voters. Otherwise we’d be sitting here with [billionaire 2010 gubernatorial candidate] Meg Whitman’s second term.”

Times staff writers Christine Mai-Duc and Seema Mehta in Los Angeles contributed to this report.

Advertisement
Advertisement