Double Dip: How Rand Paul Can Legally Tap His Biggest Donors Twice

He wants to run for Senate and the White House at the same time. That means more money.

Sen. Rand Paul could have a financial edge over many of his prospective presidential rivals in 2016 due to a quirk in timing and election law that lets him to tap his biggest donors for campaign cash twice.

Paul has said he plans to seek Senate reelection and, if he runs, the Republican presidential nomination simultaneously. And because he would be campaigning for two federal offices, he would be eligible to have two open federal campaign committees at the same time. Thus, his largest donors could give $2,600 to his presidential primary campaign and another $2,600 to his Senate account for the primary.

While federal rules do limit how he could spend the money, veteran election lawyers say diligent accounting could allow for legal cost-sharing between the two committees, saving Paul's presidential bid precious dollars and letting him collect bigger checks from his biggest contributors.

"The two big advantages you can think of are the ability to double-dip from donors and the ability to allocate your costs between two different entities," said Neil Reiff, a Democratic campaign lawyer.

Election lawyers say Paul could conceivably split the salaries of his top advisers between the two committees, divide the rent for his campaign headquarters and share some fundraising costs. In theory, his Senate committee could even buy television ads ostensibly for his reelection in the media markets of neighboring states such as Ohio (the Cincinnati market), West Virginia (Charleston), and Tennessee (Knoxville and Nashville) that cover parts of Kentucky and yet could boost his presidential prospects.

So while Paul's pursuit of two campaigns simultaneously has proved to be a headache in Kentucky (where state law forbids appearing on the same ballot twice) it looks to provide him with a small but potentially significant cash advantage.

In contrast, none of the potential GOP candidates who will be out of office or in governorships—Jeb Bush, Chris Christie, Rick Perry, Mike Pence, Scott Walker, among them—will be able to have two open federal committees.

"I guess Chris Christie, or any other candidate, can declare he's running for Senate so he could double-dip, too," Reiff said sarcastically.

Sen. Marco Rubio of Florida could technically do the same thing as Paul, but he has said he won't run for both reelection and the presidency in 2016, which Florida law doesn't allow anyway. Sen. Ted Cruz has opened a 2018 Senate reelection account and could also ask donors to fill its coffers, but election lawyers say he would likely have a harder time justifying significant expenses there in 2015 and early 2016 because he won't appear on the ballot for years.

The issue has come up before. Hillary Clinton (2008), Barack Obama (2008), John Kerry (2004), and John McCain (2000 and 2008) were all senators when they ran for president in the past—but none of them was up for reelection in the same year, as Paul will be.

The advantages of having two committees would help Paul on the margins, said Dan Backer, a GOP campaign finance lawyer. If Paul's Senate committee paid for a list-building effort through email-gathering or direct mail to harvest new donors, Backer noted that Paul's presidential campaign would obviously reap the benefits too. As of the end of September, Paul had $2.8 million in his Senate account.

"Even if funds raised by the Senate committee are very conservatively deployed, that inevitably still helps his candidacy out because there are things the Senate campaign will do that will benefit the presidential," Backer said.

All of this would have to be carefully divided and documented. Another GOP election lawyer said all the paperwork would be a huge headache: "It's, frankly, a complicating factor."

Paul's campaign declined to comment for this story, as did Cruz's political team.

Running for election with two active committees is well-trod ground for lower federal offices. Rep. Donald Norcross of New Jersey, for example, was able to raise twice as much money from donors such as Ivanka Trump because he was running concurrently in a special election and in the regular 2014 election. That meant he raised $10,400 each from over a dozen individual donors in 2014 even though such donations are typically capped at $5,200.

At the presidential level, the precedent-setting case came in 1995, when then-Sen. Phil Gramm of Texas wanted to run both for reelection in 1996 and the White House. The Federal Election Commission told him that "regulations allow dual campaigns to share personnel and facilities as long as expenditures are allocated between the two campaigns" properly.

These days, Paul S. Ryan, an attorney at the Campaign Legal Center, said he is more concerned about candidates skirting limits on exploratory committees and the influence of unlimited-money super PACs than Paul, or Cruz, getting a few thousand dollars more from their chief financiers.

With super PAC donors likely to cut seven-figure checks, Ryan said "it makes any concerns of doubling up the $2,600 seem pretty small potatoes," for watchdogs like himself worried about potential influence-peddling.

In the past, large donors were limited in how much money they could give total to federal candidates, but the Supreme Court threw out those so-called aggregate limits in the McCutcheon case last year, making it even more likely that Paul could raise the maximum amount from his top supporters.

Paul is already asking individual donors to give the legal maximum of $10,200 to the Rand Paul Victory Committee, a joint account that divides its receipts between Paul's Senate committee and his leadership PAC. If he runs for president, Paul could add that account to his Victory Committee, which would then be able to raise $15,400 from individuals.