Allies of Florida Gov. Ron DeSantis are reportedly planning to execute a controversial money transfer to unencumber tens of thousands and thousands of dollars to support his expected 2024 presidential campaign.
DeSantis, widely considered former President Donald Trump’s top potential Republican primary rival, won his 2018 gubernatorial race and simply clinched reelection in 2022 with the assistance of a deep-pocketed state political committee. The group has raised greater than $225 million for DeSantis and currently boasts nearly $86 million in money readily available.
But when DeSantis decides to run for president — as he’s widely expected to do in the approaching weeks — he’s legally barred from dumping that war chest into his federal campaign coffer. That is because federal law bans the transfer of state-level political funds to a national election.
As an alternative, the governor’s allies could attempt to transfer them to a pro-DeSantis federal super PAC, which is required to stay independent of his potential presidential bid. The Wall Street Journal, citing people acquainted with the situation, has reported that those plans are underway.
“That’s the path we expect for DeSantis to take,” Shanna Ports, senior legal counsel for the nonprofit government watchdog Campaign Legal Center, said in an interview.
Ports’ group argues that such a transfer from a candidate-controlled state committee to a federal super PAC is unlawful. But other experts disagree, and Ports acknowledged that the Federal Election Commission “has not had the teeth to implement on this area.”
There’s history to support that claim: The FEC allowed an analogous maneuver through the 2020 congressional race of Rep. Byron Donalds, R-Fla.
Donalds, a former state representative, had resigned as chair of his own political committee, “Friends of Byron Donalds,” shortly before running for Congress. A couple of months later, that state group contributed greater than $107,000 to a federal independent political committee that supported Donalds’ candidacy.
The Campaign Legal Center filed a grievance accusing Donalds of violating a ban on using non-federal funds, or “soft money,” for a federal election. However the FEC took no motion on the matter, unpersuaded that Donalds controlled the state group’s moves after he resigned.
Friends of Ron DeSantis could soon attempt to transfer a moneybag roughly 800 times the dimensions of Donalds’. But experts say that relating to the law, size doesn’t matter.
“Ultimately, the legal principles aren’t really modified by the sum of money involved,” Bradley Smith, a Republican former FEC commissioner, said of the potential transfer of funds.
“My basic tackle it’s that I do not think they are going to have an actual problem,” Smith said.
The state committee, Friends of Ron DeSantis, appears to be positioning itself for the transfer. The group this week chosen state Sen. Blaise Ingoglia, a Republican ally of DeSantis, to take over as its chairman. The committee’s website, which as recently as last month had listed DeSantis as its “associated person,” now lists Ingoglia.
The state senator confirmed his appointment in an announcement to CNBC that doesn’t specify it is going to deal with electing state-level candidates. As an alternative, Ingoglia’s statement says the group will “put children first” and echoes rhetoric utilized by the governor in his highly publicized fight to ban some classroom discussion about gender identity and sexual orientation.
A spokeswoman for Ingoglia couldn’t immediately be reached for further comment.
Friends of Ron DeSantis is allowed to simply accept unlimited contributions from donors, and it shows. The group in recent times received single donations of $10 million, from hotelier Robert Bigelow, and $5 million from hedge fund CEO Ken Griffin, amongst many others that far exceed the $6,600 cap that individuals may give to national election committees.
Bigelow has also revealed himself because the top donor to Never Back Down, a brilliant PAC that claims it has already raised greater than $33 million because it encourages DeSantis to run for president.
Spokespeople for Never Back Down declined CNBC’s requests for comment in regards to the state committee’s reported transfer of funds.
Meanwhile, DeSantis appears to be preparing to launch a presidential campaign.
Backed by a heavily Republican state Legislature, DeSantis spent the preceding two months passing reams of latest state policy that broadly sketch the type of populist, culture-focused agenda he is anticipated to espouse on the campaign trail.
The GOP state lawmakers also passed measures allowing DeSantis to run for president without resigning as governor and shielding his travel records from public view.
He has also been hosting a flurry of dinners and other events with prospective Republican donors, in line with various news outlets.
Roy Bailey, a Texas bundler who recently met with DeSantis, sang the governor’s praises in a call with CNBC. “I’ve told him I’m hoping he gets in and prayerfully considers it, and I’m able to support him if he does,” Bailey said.
The method has apparently garnered some mixed results, nonetheless. Republican megadonor Steve Schwarzman, opted to carry off on contributing to DeSantis’ efforts after a recent meeting, Bloomberg reported.
If successful, the transfer of money from DeSantis’ state committee to a brilliant PAC could also help reverse the governor’s downward slide in some polls of the potential primary race.
Trump has pulled ahead because the clear frontrunner while bashing DeSantis at every available opportunity, even after being criminally charged with falsifying business records and located answerable for sexual abuse and defamation. Trump, who can also be under criminal investigation in two federal cases and one in Georgia, has pleaded not guilty to the business charges and moved to appeal the sexual abuse verdict.
Some experts, like those on the Campaign Legal Center, see using state funds on the federal level as a loophole. But Smith, the Republican former FEC commissioner, noted that calling it a loophole implies it’s not illegal.
“I believe the loophole exists because of great constitutional concerns,” he said. “One person’s loophole is one other person’s constitutionally protected speech.”