While campaigns have wide discretion in deciding how to spend their funds, the Federal Election Campaign Act (“FECA”) and Federal Election Commission (“FEC”) regulations do place certain restrictions on the use of campaign funds. In general, campaign funds may be used only for campaign-related expenses, and campaign funds may not be used for the personal use of a candidate or federal officeholder.
FECA and FEC regulations state that an authorized committee may use its funds for several specific purposes, including “ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office,” and “any other lawful purpose” that does not otherwise constitute conversion of campaign funds to “personal use.” FEC regulations define “personal use” as “any use of funds in a campaign account . . . to fulfill a commitment, obligation or expense of any person that would exists irrespective of the candidate’s campaign or duties as a Federal officeholder.” The FEC refers to this determination as the “irrespective test,” used to differentiate legitimate campaign and officeholder expenses from personal expenses. Simply put, if the expense would exist even in the absence of the candidacy or even if the officeholder were not in office, then the personal ban use applies.
FEC regulations provide an enumerated list of expenses that are automatically considered personal use, including household food items or supplies, funeral, cremation and burial expenses, clothing, tuition payments, mortgage, rent and utility payments, investment expenses, entertainment, dues, fees and gratuities, and salary payments to a member of the candidate’s family (unless the family member is providing bona fide services to a campaign). For other expenses, the FEC determines on a case-by-case basis whether the expense constitutes a “personal use” expense. Perhaps most notably, in recent years the FEC has considered whether expenses for childcare, personal security, and legal fees are permissible under the “irrespective test.”
Childcare
In May 2018, the Federal Election Commission ruled that Liuba Grechen Shirley, a congressional candidate from New York, could use campaign funds to cover her campaign-related childcare expenses. A year later, in 2019, the FEC issued a similar ruling, concluding that MJ Hegar’s campaign committee may use campaign funds to pay for childcare expenses that are the direct result of campaign activity. Most recently, the FEC concluded that Congressman Swalwell may use campaign funds to pay overnight childcare expenses that he would incur when he travels for his own campaign.
At the state level, approaches vary on the issue of allowing campaign funds for campaign-related expenses. As of April 2024, 31 states (plus DC) currently allow or have allowed campaign funds for childcare. Of the 31 states that have allowed the use of campaign funds for childcare, 9 states also allow candidates to use their campaign funds on broader dependent care and 12 states allow officeholders to use their campaign funds to pay for childcare costs directly related to official duties.
Personal Security
Over the past decade, the FEC has loosened restrictions on campaign spending for personal and home security, issuing advisory opinions allowing for campaign money to pay for personal security personnel, home security, and other expenses related to residential security systems. In each advisory opinion, the FEC concluded that the expenses for security would not exist irrespective of the requestor’s duties as federal officeholders or candidates.
On April 9, 2024, the FEC published a Notice of Proposed Rulemaking (NPRM) that seeks public comments on a proposed rule to amend its regulations regarding the use of campaign funds to pay for security measures for federal candidates and officeholders. Consistent with the FEC’s advisory opinions, the proposed rule would provide that the use of campaign funds to pay for the reasonable costs of security measures for a federal candidate or officeholder is not personal use as long as the payments are made for security measures that address ongoing dangers or threats that would not exist irrespective of the individual’s status or duties as a federal candidate or officeholder and would require that the disbursements be for the usual and normal charge for such goods and services. The proposed rule also identifies several categories of permissible security measures, including non-structural security devices; structural security devices; professional security personnel and services; and cybersecurity software, devices and services.
Legal Fees
In several advisory opinions (see e.g., AO 2013-11, AO 2011-07), the FEC has said that campaign funds may be used to pay for up to 100 percent of legal expenses related to campaign or officeholder activity, where such expenses would not have occurred had the individual not been a candidate or officeholder. For example, legal expenses in seeking ballot access in an upcoming election, expenses incurred in connection with investigations pertaining to the candidate/officeholder’s role as a candidate or officeholder; and litigation expenses where the candidate/officeholder was the defendant and the litigation arose directly from campaign activity or the candidate’s status as a candidate would all be permissible.
In specific situations, the FEC has concluded that campaign funds may be used to pay for up to 50 percent of legal expenses that do not relate directly to allegations arising from campaign or officeholder activity if the candidate or officeholder is required to provide substantive responses to the press regarding the allegations of wrongdoing. This may include activity prior to becoming a candidate or officeholder or activity of a business owned by the candidate/officeholder.
It is also important to note that while federal law has its own regulations relating to permissible use of campaign funds, state laws differ on whether childcare, personal security, and legal fees may be paid for using campaign funds. Steptoe’s Campaign Finance & Political Law group is here to assist with navigating federal and state campaign finance law.
