The Money Mess Biden Is Leaving for Fellow Democrats: QuickTake

(Bloomberg) -- When President Joe Biden dropped out of the race, many thorny questions were left about what would happen in the campaign. Some of the thorniest are about money. There’s the $96 million his campaign has left in the bank and issues about who could use it. And whoever takes his place at the top of the ticket will still be at a steep financial disadvantage to Republican nominee Donald Trump.

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Trump has seen a surge of billionaires’ donations since his unprecedented felony conviction in May. On the Democratic side, deep-pocketed donors had frozen their money to force the president out, while the Biden campaign outspent Trump by a 6-to-1 margin in a failed attempt to boost his sagging chances.

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Here’s how the campaign cash flows now that Biden has bowed out of the race and Vice President Kamala Harris announced her bid.

How much did Biden raise? What do Democrats have to use?

Biden started off with an early fundraising advantage over Trump, building up a $212 million war chest and cracking jokes about “broke Don.” But Trump entered July with $45 million more cash in the bank than Biden, who went on a spending spree that included a $50 million ad blitz that burned through 93% of the money he raised in June.

Taking a broader look, the Biden-Harris campaign, the Democratic National Committee and state parties collectively had $240 million in the bank at the beginning of July, according to the most recent filings. That campaign has officially rebranded as “Harris for President,” according to a Federal Election Commission filing.

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How does Biden’s departure complicate things for Democrats?

Harris, who has mounted her own White House bid under what used to be the Biden-Harris campaign, has access to the $96 million in cash on hand. If another candidate emerges, that person might have to start fundraising from $0.

What would a new candidate have to do?

It’s possible that if a different nominee is ultimately chosen, what’s left in the account could be transferred to the Democratic National Committee, or donated to an outside spending group like a super political action committee. Candidates have more leeway to work with their political parties to direct spending on advertising. Candidates can’t coordinate ad spending with super PACs, but they can consult on get-out-the-vote efforts.

If a member of the House or Senate is chosen, leftover campaign funds from prior elections could be transferred to a presidential committee.

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Campaigns are allowed to borrow money provided that they disclose the lender and the terms of the loan. The DNC could loan a new candidate’s campaign money. The Amalgamated Bank, which serves as the main banker for the Democratic Party, has given loans of as much as $20 million to party committees. It too could offer a loan that would allow a campaign to get up and running more quickly.

How does this compare to Trump and the Republicans’ financial status?

Trump and super PACs supporting have seen a surge of support in recent weeks, with major donors including billionaires Elon Musk and Paul Singer and investor Timothy Mellon either donating or pledging support. The Trump campaign and the Republican National Committee had $285 million in the bank at the end of June, $45 million more than Biden’s operation.

Republican donors have unified around Trump, who’s also drawing support from individuals who’ve previously donated to Democrats. Pershing Square’s Bill Ackman has endorsed him, while Jacob Helberg, a Palantir executive who donated $250,000 to a pro-Biden super PAC in 2020, is now donating to Trump.

What do Democratic donors want?

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For donors, the bottom line has been beating Trump. Democrats poured more than $1 billion into Biden’s campaign coffers in 2020, and hundreds of millions more into super PACs to get Trump out of the White House. The problem for deep-pocketed donors is how they go about that with a little more than four months left before election day.

Mike Novogratz, the billionaire founder of Galaxy Digital Holdings who was among the first round of donors calling for Biden to step aside, said he wants an open nominating process. He also has started an effort to raise money for a Biden successor.

“This is a good step in the process, and it had to happen,” he said in an interview Sunday. “I put some money in already, and we will see what comes out of the next 10 days.”

If there’s an open convention, donors might split in the run-up to it over who should be the successor. George Soros, one of the biggest donors to Democrats, will back Harris, according to a spokesman.

Donors don’t have much time to unite behind a candidate: The Democratic National Convention to nominate the ticket starts in Chicago in less than a month.

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