The move deferred more than $700,000 in payroll costs for candidates including Sens. Amy Klobuchar and Michael Bennet and Govs. Steve Bullock and Jay Inslee, federal election records show. It affected more than 200 campaign aides, from the junior-most field staff in Iowa to senior national advisers.
The delay also pushed paychecks into the third quarter of 2019, essentially keeping them off the books for three months until the next campaign finance reports are filed in October.
That does not violate campaign laws, but it is a symptom of the high stakes of the 2020 money race and a crowded field choked with candidates struggling to stay alive before this week’s second round of debates in Detroit. In a presidential primary with many Democratic hopefuls competing for campaign cash, a candidate’s viability is often judged by donors, the media and even rivals with a cursory look at campaign balance sheets.
Delaying paychecks was only one tactic employed to cast the fundraising reports delivered to the Federal Election Commission in July in the most positive form. Some collected funds they cannot legally spend in the primary, a distinction buried deep in the reports. Some racked up debts. One candidate, Mayor Bill de Blasio of New York, used a state-level political action committee for campaign expenses, which has raised legal questions.
“It’s in their interest to spin the numbers in the best light possible,” said Michael Beckel, an investigator and researcher with Issue One, which advocates campaign-finance transparency, “and using accounting gimmicks to paint an even rosier picture is one way they are going to try to sell their campaign to the donor class and the Democratic base writ large.”
Of the 2020 field, Klobuchar of Minnesota delayed the largest payroll payment at the end of June. Her previous mid-June payroll had shown roughly $275,000 in salary and taxes. By holding off payment of the next set of paychecks until July, her cash on hand was inflated by at least that amount (her staff has been steadily growing).
But that is not the only maneuver that boosted the appearance of Klobuchar’s books. She has raised more than $750,000 in funds earmarked for the general election — money from donors who gave her more than the $2,800 legal maximum for the primary. While it is technically money she has in the bank, she cannot legally spend it in the primary.
Combined with her delayed payroll, Klobuchar’s spendable cash reserves are about $1 million less than the $6.7 million figure that appears in her filing. Her campaign declined to comment.
Then there is Inslee, the Washington governor. He reported $1.2 million in cash on hand, which would appear to rank him 14th in the field. But Inslee’s actual financial position is far weaker. He had nearly $172,000 in unpaid bills. Nearly one-third of his funds, more than $400,000, was earmarked for the general election. And he did not pay June’s final payroll — another $75,000 or so — in that month, records show.
Accounting for those maneuvers, Inslee’s actual cash position was less than half of what it initially appeared — a little shy of $550,000. His campaign declined to comment.
The campaigns of Inslee, Klobuchar and others who delayed payroll had been sending their second bimonthly paychecks on the last day of the month, which fell on a Sunday in June. The campaign of Bullock of Montana was the only one to respond to a request for comment, saying the delay was simply because June 30 fell on a Sunday. But other campaigns with bimonthly payouts, such as Sen. Kamala Harris of California and former Housing Secretary Julián Castro, cut checks on Friday, June 28, the last workday of the month.
Reliance on financial gimmicks to boost the bottom line is most common among those polling toward the back of the pack. But upper-tier candidates are not immune.
Former Rep. Beto O’Rourke of Texas bragged about breaking Sen. Bernie Sanders’ 24-hour record for fundraising in March. Only later, when he filed his full financial report, was it clear his total included general election funds he could not spend in the primary. And the campaign of Harris pushed a $1 million payment to her digital consultancy until the first day of the second quarter, boosting her first cash-on-hand report. The $1 million payout was the largest single payment any campaign has made to any vendor.
Rep. Seth Moulton of Massachusetts, who did not qualify for the June or July primary debates, reported $725,000 cash on hand at the end of June, among the lowest figures in the field. The reality was even more grim.
Moulton did not pay out a final June paycheck to aides that month — obscuring roughly $96,000 in expenses. Plus, he had $98,000 in debts and more than $200,000 of his funds were earmarked for the general election. His functional cash total was closer to $325,000.
Former Rep. John Delaney of Maryland was the other candidate who pushed back the final June payday; Delaney, along with Klobuchar and Inslee, had previously pushed the final first-quarter payroll into the second quarter.
De Blasio did something entirely different to boost his financial position. He used a state-level PAC to underwrite some of his presidential activities, a move called “bewildering” by Brendan Fischer, director of the federal reform program at the Campaign Legal Center, a nonprofit watchdog group.
De Blasio reported paying the state PAC $123,000 for polling and owing another $53,000 for travel and digital ads. But he did not report the donations to the PAC to his campaign. Among the problems with the arrangement is that the state PAC received money from contributors who also gave the maximum allowed to de Blasio’s campaign, Fischer said.
“It looks an awful lot like a violation, and possibly more than one violation,” Fischer said of the arrangement, which was first detailed by Politico and The City. He added that the Campaign Legal Center was “very likely” to file a formal complaint with the Federal Election Commission.
In another unusual move, de Blasio’s campaign claimed that the costs for his presidential campaign launch video were not entirely related to his presidential campaign.
His state PAC and campaign made identical $19,964 payments to Freedomland Media, the vendor that produced the video. A campaign spokeswoman, Jaclyn Rothenberg, said it was proper for the state PAC to pay for part of the cost because it was commissioned “before he had made a decision” to run and his PAC would have made a video if he was not running for president.
De Blasio, who has faced campaign finance investigations in New York, told reporters earlier in July that “everything we’ve done is according to the law.”
While de Blasio used a state PAC, other candidates were operating federal PACs that served as de facto campaigns-in-waiting ahead of their launch. Those PACs must disclose their full finances by Wednesday.
Not every 2020 candidate resorted to raising general election funds. Some actively refunded such donations, including former Vice President Joe Biden and Sen. Kirsten Gillibrand of New York. Mayor Pete Buttigieg of South Bend, Indiana, raised the most, about $825,000, but that accounts for only a small fraction of his $22.7 million war chest.
While campaigns can push off costs besides payroll into future quarters, those can be impossible to track until months later, when the next quarterly filing is made. In the first quarter of 2019, several campaigns held off making big payments to vendors that were buying advertising until April 1 — the first day of the new quarter.
The biggest was Harris’ $1 million payment to her digital team, but Sen. Cory Booker of New Jersey paid $254,697 to a vendor, Klobuchar $300,000 and Delaney $238,283 — all on April 1.
Campaigns will not have to reveal until mid-September what payments they deferred into July. Of course, by then, it is possible not all these candidates will still be running for president.
This article originally appeared in The New York Times.