Obama Campaign Racks Up Large Legal Fees
President Barack Obama was not on the ballot in 2010, but his campaign committee outspent all other presidential campaigns last year on legal fees, refunds to contributors and payments to the Treasury Department for unusable donations.
Obama for America has spent more than $2.8 million on legal fees since the 2008 election, according to a CQ MoneyLine study of Federal Election Commission records. In all, the president’s campaign spent three times more on lawyers after Election Day than in the two years preceding it.
A Democratic spokesman said in a statement that the expenses were expected and not extraordinary considering that Obama’s White House run was the largest campaign in history, taking in more than $750 million.
“The campaign has incurred ordinary legal expenses related to the wind-down of its operations and other legal services which all campaigns incur and which are proportional to the unprecedented size of this campaign,” DNC National Press Secretary Hari Sevugan said.
The Obama campaign’s legal fees since the 2008 election top those of any other House or presidential campaign committee, including those of Members of Congress who were under investigation.
These legal costs topped those of Rep. Charlie Rangel’s campaign, which spent $2.4 million during an ethics investigation that resulted in his censure last year. The New York Democrat used the legal fees to defend himself against allegations that included misuse of federal resources, failing to pay taxes on a villa in the Dominican Republic and filing inaccurate financial disclosure forms.
Rangel also used $425,000 from his political action committee to defray legal fees, which bumps his total about $300 over Obama’s.
Legal costs for presidential campaigns can balloon following Election Day as these organizations face compliance issues and sometimes court cases stemming from the campaign season.
Sevugan said some legal fees were needed to defend the campaign against “unmeritorious” suits, including one challenging Obama’s citizenship.
Legal costs for Republican nominee John McCain’s campaign and compliance committees have also increased substantially since his 2008 bid. The Arizona Senator has spent more than $1.3 million on lawyers since the election. While that amount is less than half of Obama’s post-election legal expenses, it is $200,000 more than McCain spent on legal fees before the 2008 election.
Former Democratic presidential candidate John Edwards has nearly doubled his legal disbursements, spending $372,000 since early November 2008, while fellow presidential candidate Hillary Rodham Clinton has basically maintained her campaign’s legal spending. Since the election, her campaign has paid $541,000 in legal fees — a dip of less than 5 percent.
The lion’s share of Obama’s legal spending went to Perkins Coie, a well-known Democratic legal and accounting firm. Perkins Coie represented the Obama campaign during all seven of the FEC’s known investigations involving his White House bid. In each of these cases, the FEC voted to dismiss the case or found “no reason to believe” that the Obama for America or related committees had violated any laws.
Perkins Coie may be also representing Obama for America in the FEC’s pending investigation of a Republican National Committee complaint. A few weeks before the election, the RNC alleged that Obama’s campaign accepted donations from foreign nationals, received contributions that had exceed limits and submitted fictitious donor names to the agency. The status of this investigation is unknown, though the FEC confirmed it received the complaint.
Though the FEC has not penalized Obama, the president’s campaign has also paid more than $400,000 to the Treasury Department during the past two years for donations that were out of compliance with campaign finance rules.
This sum is not just the most of any campaign; it is greater than all other similar spending by House, presidential and political action committees put together during that time. The Obama campaign paid the Treasury Department $232,000 at the end of 2009 for “disgorgement of unverifiable contributors” and another $182,000 in June 2010 for “uncashed checks.”
“As with any campaign, we received certain contributions of the millions made overall which could not be accepted for legal reasons,” Sevugan said. “We attempted to return all these contributions to the donors — as well as refunds to vendors for overpayments — but in some instances were unable to locate them. In those cases we disgorged the funds to the Treasury rather than keep them.”
Others with large “disgorgement” checks to the Treasury during that period were the campaigns of former Republican presidential candidates Mitt Romney with $170,000 and McCain with $30,000.
The Obama campaign also leads all organizations when it comes to sending refunds to individual donors. Following the election, it has disclosed disbursement transactions totaling more than $5.7 million for refunds. Meanwhile, similar spending for Hillary Clinton for President totaled $2.7 million, while McCain’s campaign reported almost $2.8 million in refunds.
These large numbers of refunds and hefty sums to the federal Treasury are often signs of a campaign trying to come within compliance with election laws. The FEC has written 26 letters — totaling more than 1,500 pages — to the Obama campaign questioning its reports and outlining a flurry of compliance concerns.