Florida Gov. Ron DeSantis’ allies are reportedly planning to conduct a controversial money transfer to free up tens of millions of dollars to support his anticipated 2024 presidential campaign.
DeSantis, widely regarded as former President Donald Trump’s greatest potential Republican primary rival, won his 2018 gubernatorial race and easily secured re-election in 2022 with the help of a well-resourced state political committee. The group has more than $225 million for DeSantis collected and currently has nearly $86 million in treasury.
But if DeSantis decides to run for president — which is widely expected of him in the coming weeks — he’s banned by law from pouring that war chest into his federal campaign fund. That’s because federal law prohibits the transfer of political funds at the state level for a national election.
Instead, the governor’s allies could try to transfer them to a DeSantis-friendly federal super-PAC, which must remain independent of its possible presidential bid. The Wall Street Journal, citing people familiar with the situation, reported that such plans were afoot.
“This is the path we expect DeSantis to take,” said Shanna Ports, senior legal counsel at the nonprofit government regulator Campaign Legal Center, in an interview.
Ports’ group argues that such a transfer from a candidate-controlled state committee to a federal super-PAC is illegal. However, other experts disagree, and Ports acknowledged that the federal election commission “didn’t have the clout in this area.”
There is a story to support this claim: The FEC allowed a similar maneuver during Rep. Byron Donalds, R-Fla’s 2020 congressional election.
Donalds, a former state representative, resigned as chairman of his own political committee, Friends of Byron Donalds, shortly before running for Congress. A few months later, this state group donated more than $107,000 to an independent federal political committee that supported Donald’s candidacy.
The Campaign Legal Center filed a complaint alleging Donalds violated a ban on using non-government funds, or “soft money,” for a federal election. But the FEC took no action on the matter, not being satisfied that Donalds would control the national group’s actions after his resignation.
Friends of Ron DeSantis could soon be attempting to transfer a purse roughly 800 times the size of Donalds. But experts say size doesn’t matter when it comes to the law.
“Ultimately, the rule of law doesn’t really change based on the amount of money involved,” Bradley Smith, a former Republican FEC commissioner, said of the potential money transfer.
“My basic stance is that I don’t think they’re going to have a real problem,” Smith said.
The state committee Friends of Ron DeSantis appears to be positioning itself for the transfer. The group this week elected state senator Blaise Ingoglia, a Republican ally of DeSantis, as chairman. The committee’s website, which last month listed DeSantis as his “associate,” now lists Ingoglia.
The state senator confirmed his appointment in a statement to CNBC, in which he did not indicate he will focus on choosing candidates at the state level. Instead, Ingoglia’s statement said the group will “put the kids first,” echoing the rhetoric used by the governor in his widely publicized fight to ban classroom discussions of gender identity and sexual orientation.
A spokeswoman for Ingoglia could not be reached immediately for further comment.
Friends of Ron DeSantis has unlimited donations from donors, and it shows. The group has received $10 million in individual donations from hotelier Robert Bigelow and $5 million from hedge fund CEO Ken Griffin in recent years, among many others well above the $6,600 cap that the Individuals can donate to national electoral committees.
Bigelow has also revealed himself to be the biggest donor to Never Back Down, a super PAC that says it has already raised more than $33 million and is encouraging DeSantis to run for president.
Never Back Down spokesmen declined CNBC’s request for comment on the State Committee’s reported money transfer.
Meanwhile, DeSantis appears to be preparing to launch a presidential campaign.
Backed by a heavily Republican state legislature, DeSantis has spent the past two months passing a slew of new state policies that broadly outline the kind of populist, culture-centric agenda he’s tasked with campaigning for.
The state’s Republican legislature also passed measures that allowed DeSantis to run for president without stepping down as governor and to protect his travel records from the public.
He has also hosted numerous dinners and other events with potential Republican donors, according to various news outlets.
Roy Bailey, a Texas bundler who recently met with DeSantis, praised the governor in a call with CNBC. “I told him I hope he comes in and prayerfully thinks about it, and I’m ready to support him if he does,” Bailey said.
However, the trial appears to have yielded mixed results. As reported by Bloomberg, Republican mega-donor Steve Schwarzman opted not to contribute to DeSantis’ efforts after a recent meeting.
If successful, the transfer of funds from DeSantis’ state committee to a super PAC could also help reverse the governor’s downward trend in some polls on the potential primary race.
Trump has emerged as the clear frontrunner, vilifying DeSantis at every opportunity, even after he faced criminal charges of falsifying business records and facing liability for sexual abuse and defamation. Trump, who is also facing criminal charges in two federal cases and one in Georgia, has pleaded not guilty to the economic charges and has appealed the sex abuse conviction.
Some experts, like those at the Campaign Legal Center, see a loophole in the federal use of federal funds. But Smith, the former Republican FEC commissioner, noted that labeling it a loophole meant it wasn’t illegal.
“I think the gap is because of serious constitutional concerns,” he said. “One person’s gap is the other’s constitutionally protected expression of opinion.”
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