Why Gore Paid His Accountants $4 Million
Of the $40 million Al Gore's campaign will raise this year, $4 million--or
roughly 10 percent--will go toward "the legal and accounting costs of meeting
federal campaign finance regulations," the New York Times estimates.
Why is Gore's bill so high?
Gore's bills are par for the course for candidates who participate in the
government's "matching-fund program." (George W. Bush and Steve Forbes aren't
participating in the matching-fund program because it comes with a $33 million
spending limit. Bill Bradley is.) The matching-fund program disburses one
dollar for every dollar donated by an individual to a campaign up to $250. If
an individual donor gives the legal limit of $1,000, only $250 qualifies for
one-to-one matching funds.
To qualify for matching funds, campaigns must verify the addresses, phone
numbers, signatures, and occupations of all donors--and constructing this paper
trail can be costly. For example, if a campaign requests matching funds for a
$500 donation from a joint checking account, it must obtain a letter verifying
that each person contributed half; otherwise the campaign will receive only
$250 of the matching funds. Similarly, the campaign's expenditures must be
exhaustively documented to demonstrate that they comply with the campaign
finance laws.
Monster accounting and legal bills like Gore's are so common that the
Federal Election Commission allows presidential campaigns to automatically
deduct 10 percent of the money they raise against the $33 million spending cap.
Some candidates often spend more than 10 percent on legal and accounting
bills, but they must document that fact to the satisfaction of the FEC.
Because the FEC adds new rules after each election cycle, the complexity and
costs of reporting continue to mushroom. Most large campaigns outsource their
regulatory accounting, and since there are only a handful of firms that
specialize in this area, these services can be quite expensive. Are they worth
the bother and expense? In Gore's case, he spent $4 million to receive only $13
million in matching dollars.
Next question?
