This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.
Now that Jeb Bush has decided to “actively explore” running for president, all eyes will turn to his fundraising.
But instead of creating a presidential exploratory committee — the traditional organizing and fundraising vehicle used by potential White House hopefuls — Bush says he's forming a leadership political action committee.
The difference between these two kinds of committees isn't insignificant. The potential advantages for Bush aren't, either.
For instance, donors may give up to $5,000 per calendar year to a leadership PAC, and “none of the contributions will count against his campaign limits,” said Kenneth Gross, a former associate general counsel of the Federal Election Commission who leads the political law practice at Skadden, Arps, Slate, Meagher & Flom.
That means donors to Bush’s leadership PAC will still be able to give $2,600 per election to Bush’s presidential campaign committee if he eventually goes on to form one. Contributions to an exploratory committee would count against the limit if Bush goes on to run.
There’s also no limit on the total amount such leadership PACs can raise before Bush is officially a candidate, while Federal Election Commission regulations prohibit exploratory committees from raising “funds in excess of what could reasonably be expected to be used for exploratory activities.”
Brett Kappel, a counsel at Arent Fox’s government relations and political law practices, said there’s no defined upper limit for the amount an exploratory committee can raise, “but a complaint could be filed if the amount raised seemed disproportionately large.”
In announcing Tuesday he was considering a presidential bid, Bush wrote on Facebook that he formed a leadership PAC to “discuss the most critical challenges facing our exceptional nation” and “support leaders, ideas and policies that will expand opportunity and prosperity for all Americans.”
That stands in contrast to the approach taken last month by former Sen. Jim Webb, a Democrat, who says he'll form a standard presidential exploratory committee ahead of deciding whether to pursue his party's presidential nomination in a field that's likely to include Hillary Clinton.
PAC money can’t be used for political campaign expenses, though it can be used for any other legal purpose, including those that could indirectly help a person’s eventual presidential campaign.
Like Bush, Texas Gov. Rick Perry has also publicly declared interest in running for president in 2016, and last summer he established his own leadership PAC.
So far, it’s reported making more than $90,000 in contributions to state and federal candidates in Iowa and New Hampshire, early primary states—one way a potential candidate can make friends and build influence.
Lawrence Noble, a senior counsel at the Campaign Legal Center and former FEC general counsel, said potential candidates who use PACs typically want to pay as much out of them as possible, but must be careful about using it to pay for true campaign expenses or so-called testing the waters activities.
If Bush eventually sets up a campaign committee, it would have to reimburse his leadership PAC for any campaign expenses incurred during this exploratory period, he said.
“What’s interesting about this is that Bush has said he is exploring a run, and he is setting up a leadership PAC,” Noble said. “If he tries to run it all out of his leadership PAC, you’ll have to closely scrutinize what he is doing.”
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