How Much Can Obama Do to Cut Clinton's Debt? Sen. Hillary Clinton has an unprecendented amount of debt from her presidential campaign that needs to be paid off. Now she's looking to former rival Barack Obama to help her raise money to erase some of it. Kenneth Gross, a campaign finance lawyer, talks about what their limits are.
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How Much Can Obama Do to Cut Clinton's Debt?

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How Much Can Obama Do to Cut Clinton's Debt?

How Much Can Obama Do to Cut Clinton's Debt?

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So, that's what Senator Obama has to gain from combining his donors with Senator Clinton's. But how about what's in it for Clinton. We called campaign finance lawyer Ken Gross to help us find out just how much Obama's fundraisers can legally do to help her out of debt.

Mr. KEN GROSS (Campaign Finance Lawyer): Well, he can't really transfer any money from his campaign a very small amount, which is not worth doing. So, what he can really do to help her is attend fundraisers, go out there and ask his supporters to make donations at a fundraiser. They could perhaps swap mailing lists. These mailing lists are extremely valuable, and a benefit could be accrued in that fashion.

ARI SHAPIRO: But it seems like it would be a hard sell, when donors to the Democratic Party are trying to get their guy in office, to give money to somebody's already dropped out of the race. Why would the donors do that?

Mr. GROSS: I think it is a hard sell. I think this is part of the healing process between the Obama and Clinton camps. There are people who are still very unhappy about the result and they're going to have to work through it, so…

SHAPIRO: So, an exchange of money between the Obama people and the Clinton people could be one way of bringing the party together.

Mr. GROSS: I think it is. I think it is part of that healing process.

SHAPIRO: We keep hearing that this debt is unparalleled in history. But are there any parallels that we can look at as a model of how Senator Clinton could pay this off going forward?

Mr. GROSS: Yes, there've been a number of instances in the past where Senators have say, transferred Presidential debt to their Senate campaigns. So that's not unprecedented.

SHAPIRO: Hey, does it make it easier to pay it off or does it just give her more time?

Mr. GROSS: Well, no, she has time either way. When it comes to repaying herself, she's got a deadline of the date of the convention - and this is a reform of the McCain-Feingold legislation. If she doesn't repay it by that date, the date of the convention, then she will have to eat it except for $250,000. That's the way the law reads. Only $250,000 of the debt to herself can survive the date of the primary, which in this case is the date of the convention. But for the so-called commercial debt, the debt owed to vendors, she doesn't have any time limit there. It will just help her satisfy it quicker if she uses the pool of funds in her Senate campaign if she chooses to do that, but there's no requirement that you transfer it.

SHAPIRO: And what eventually happens in these cases? Does the politician just chip away at it bit by bit until it's finally gone?

Mr. GROSS: Yes, I think probably the most notable example of that was Senator Glenn, who of course ran for President many, many years ago in 1984. It took him some 15 years or more, as I recall, for him to satisfy that debt. He just kept chipping away at it. Even after he left the Senate, it's not a good situation to have it hanging over your head, but if you're remaining in office as a Senator, you have the ability to raise funds. If you simply cannot raise the money, you're not in office say anymore, you can go to the federal election commission and submit what's called a debt settlement resolution and ask that the commission approve cents on the dollar. You can say, look I only have enough to pay 10 cents, 20 cents, 30 cents on the dollar and they have to approve it so they know it's not some sort of sweetheart deal, some kind of backdoor contribution.

SHAPIRO: Well, what do you think, 15, 20 years from now, in the year 2025, is Senator Clinton still going to be paying off that debt from her Presidential run in 2008?

Mr. GROSS: I doubt it. I think she really wants to get this off her table. And you know, as a continuing Senator and up for reelection in 2012 for the United States Senate in New York I think she wants to get that black cloud away from her head. Her personal debt's another story. She may end up having to write that off.

SHAPIRO: Ken Gross is a partner at the law firm Skadden Arps. Good talking with you.

Mr. GROSS: Thank you.

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