Few Special Interest groups believed Larry Stutts would beat Democrat Rodger Bedford, but when he did, the PACs lined up to say "sorry" with their money. And through a Campaign Finance loophole, they gave him a lot.
Under the Alabama Fair Campaign Practices Act, fundraising is supposed to end on Election Day. But there is an exception: If a candidate has debt at the end of a campaign, the candidate gets another 120 days to raise money to pay that debt off.
Reasonable enough, right?
But here's where it gets screwy. There's nothing to stop candidates, the day before the Election, from lending their campaigns huge personal loans, claiming that as campaign debt, then using that three-month window to raise an identical amount, even if the money that was lent to the campaign is still sitting in the campaign account.
In short, manufacture a debt that you then ask special interest groups to "repay."
Which is exactly what Stutts did. The day before the election, Stutts donated $125,000 to his campaign, on top of another $90,000 he had loaned the campaign already.
I don't want to drown you in math, so this might be a good time to put on a life preserver.
Altogether, the day after Election day, he had $215,296.52 of "debt", to himself, at the same time he had $170,000 in his Campaign account.
Just raise another $45,000 and he's square, right?
Wrong. Under the law, it's legal for Stutts to raise another $215,296.52, even though he has most of the money already he needs to repay the loans he made from his own pocket.
Which is exactly what he did.
Before the election, Stutts had received four PAC contributions totaling about $10,000. After the election, he received 55 PAC donations totaling $172,150. In addition to that, he received almost $33,000 directly from businesses. The rest came from individual donors.
Let's be clear what was happening here. Special interest groups, through their Political Action Committees, had made the wrong bet on Bedford and now they were trying to jump back on the winning side by donating money to Stutts after the race was over. This loophole doesn't just work for candidates, but also the Special Interest groups that want to buy their favor.
Of the PAC money Stutts received after the election, $119,593.53 came from PACs that had donated to Bedford before the Election. This is how Special Interest groups say, "We're sorry we doubted you."
And it's all legal under Alabama Campaign Finance law.
Stutts raised more than $220,000 after the election, although legally he could raise only $215,296.52. Stutts not only raised money to repay his manufactured Campaign debt, he also charged his campaign $4,580 in interest. The Alabama Ethics Commission was asked whether it's legal to charge your Campaign interest on a personal loan. The answer was, and I'm paraphrasing here, probably not.
So what's the bottom line?
If today, Stutts paid himself back everything the campaign owes him. He'd still have $109,230 left over in his Campaign account. That's money he has because he manufactured debt for Special Interest groups to help him repay.
And that's money he can spend on his next Campaign, on Charitable contributions to Little League teams and garden clubs, or if he follows State Sen. Gerald Dial's lead, car payments on a luxury automobile.
Within limits, but not many, it's his to spend as he wants.
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