Before closing up shop, Lautenberg campaign committee has a debt to pay


New Jersey Sen. Frank Lautenberg, who died Monday at age 89, leaves behind many accomplishments, from laws fighting drunk driving to preventing people convicted of domestic violence from obtaining guns.

But the longtime Democrat also leaves behind a campaign committee with nearly $1.1 million in debt, and the question of how that will be handled provides an interesting window into campaign finance law.

The Lautenberg for Senate committee's debts — which the Federal Election Commission says it must settle before the committee closes up shop — are for loans that Lautenberg himself made to the campaign during his 2002 race. Lautenberg, worth at least $57 million, according to the latest compilation of congressional personal financial disclosure forms by the Center for Responsive Politics, made his fortune as an executive of a payroll processing firm, Automatic Data Processing.

The right to collect the campaign debt would now fall to his estate, which would mean his beneficiaries would get to decide whether to forgive it, New Jersey trusts and estates lawyer Steven L. Friedman said. Or the senator could have specified in his will that the loans be turned into contributions. Friedman says he thinks this is likely the case.

The treasuer of Lautenberg's campaign committee would not say what its plans are and the late senator's spokesperson did not return an email.

But were Brett Kappel, a Washington, D.C. campaign finance lawyer, Lautenberg's attorney, he would urge the executor of the estate to convert the loans into contributions, effectively erasing the debt. That's what the estate of another deceased candidate, Paul Cantrell of South Carolina, agreed to do back in 1985 when the campaign owed him about $41,000. The Federal Election Commission approved of the debt cancelation then.

The Lautenberg committee would simply have to send a letter to the FEC informing the body that the estate has agreed to cancel the debt, Kappel said.

In cases where debts are owed to potentially less friendly creditors, things can get hairy. The committee would have to attempt to fundraise in order to pay off the debt (which they would likely have trouble doing for a dead candidate) and the creditors have to show that they made a reasonable attempt to secure the money, such as file a lawsuit. In the end, the creditors often have no choice but to agree to be paid a percentage of what they are owed, said Kappel.

Lautenberg had been inquiring about how he would get his money back, however. He asked the FEC in 2008 whether the committee could fundraise to repay the full amount loaned to the committee in 2002, a relevant question because a provision of the 2002 McCain-Feingold campaign reform law limited the amount the campaigns could pay back loans to candidates at $250,000. Because the loans were made just before the law went into effect, the $1.1 million could be repaid in full, the FEC commissioners advised.

And even before his death, the committee was in wind-down mode. After Lautenberg announced in February that he would not pursue reelection in 2014, the committee stopped fundraising. It has $162,000 left in the bank. The committee could donate that money to charity or transfer all of it to a political party — pretty much anything outside of converting the funds to pay for the late senator's personal expenses.

Or the committee could just continue in existence without filing an official termination, as the committee of Lautenberg's former New Jersey colleague Rep. Donald Payne, who died in office at age 77 last year.

Payne's campaign account lives on, with more than $450,000 in the bank. The committee’s treasurer, Craig Stanley, says the money will go towards a nonprofit that is "in the process of being formed” to champion causes dear to Payne such as the eradication of international hunger, poverty and disease, particularly in Africa. Meanwhile, the committee continues to pay a D.C. law firm thousands of dollars annually in legal services, $6,000 in the first quarter of the year to the company Aristotle, which provides campaigns with software to submit FEC reports, and about $400 to Amtrak for “transportation to meeting.”

(Photo credit: U.S. Congress)