Sen. Michael Bennet disclosed a $950,000 loan to his campaign for governor of Colorado this week, which campaign finance experts say creates a significant risk of quid pro quo corruption.
In Colorado and at the federal level after a 2022 Supreme Court ruling, FEC v. Ted Cruz for Senate, candidates who loan their campaigns money have the right to solicit post-campaign contributions from donors in perpetuity and without limits to retire that debt. That means that as an elected governor, Bennet can ask donors to pay off his loan and enrich him personally, even if those donors are pushing legislation that Bennet would have to sign into law, seeking appointments from him, or have any other business before the state.
Because of Bennet’s peculiar circumstances, this potential conflict of interest would stick around even if he loses the Democratic gubernatorial primary, scheduled for June 30. Bennet is a sitting senator who is not up for re-election until 2028. A loss in the governor’s race would return him to the Senate. From there, he can solicit donors to pay off his gubernatorial campaign debt. “Federal law does not restrict federal officeholders from soliciting funds to campaign for a nonfederal office,” notes Saurav Ghosh, a director at the Federal Campaign Finance Reform program at Campaign Legal Center.
Therefore, anyone seeking to influence Bennet as a U.S. senator could effectively give him money directly. And since Bennet is one of the senior members of the Senate Finance Committee, which has jurisdiction over health care policy and the entire U.S. tax code, the list of possible donors with business before him as a senator is practically endless.
“This raises serious conflict-of-interest concerns for any incumbent, including Bennet, who may continually turn to private donors and ask for more and more special-interest money,” said Craig Holman, campaign finance expert with Public Citizen.
One irony here is that Bennet has spent the later stages of the gubernatorial race in Colorado criticizing his opponent, Attorney General Phil Weiser, for taking over $75,000 in donations from corporate attorneys whose law firms were involved in active litigation or settlement talks with his office. The Bennet campaign even put up a website, Pay to Play Phil, to highlight this and older instances of Weiser allegedly getting donations or perks from corporations he had sued.
But a candidate’s personal loan could also serve as a pay-to-play opportunity waiting to happen, and in Bennet’s case, it’s many times larger than $75,000.
“Michael Bennet’s BS attacks against Phil are a distraction from the $1 million he personally loaned his campaign,” said Nate Jackson, a Weiser campaign spokesperson. “The real question voters need to be asking is: Who will pay off Michael Bennet’s $1 million loan?”
BENNET ANNOUNCED HIS RUN FOR GOVERNOR last April, on a platform of solving the affordability crisis, strengthening health care, safeguarding clean air, improving public education, and standing up to Donald Trump. Observers wondered whether he would clear the field, given the difficulties for opponents competing against a powerful senator with high name recognition. But Weiser, who had already announced for governor and had gained notice for his efforts to block grocery consolidation, break up Ticketmaster, and hold pharmaceutical interests accountable for the opioid crisis, did not exit the race, and the campaign has been surprisingly competitive.
An independent poll released last week showed Weiser ahead 41-34, the first public poll showing him in front, with Weiser gaining the most support among voters who considered the Democratic Party “ineffective.” And for the last month, a Bennet-aligned super PAC has been attacking Weiser mostly for failing to lead enough lawsuits against Trump. Bennet going negative is a signal that he is concerned about the closeness of the race. (Weiser has also gone negative against Bennet, to be fair.)
The pro-Bennet super PAC Rocky Mountain Way has raised over $10 million, almost half of it from billionaire former New York Mayor Michael Bloomberg, alongside donations from health insurer Cigna and rideshare firm Uber. Weiser also has support from a super PAC, though it’s only raised $1.3 million. But Weiser has outraised Bennet in individual donations over the course of the campaign, with 90 percent of them coming from in-state. And Bennet’s most recent campaign finance disclosure showed that he had spent $5.1 million on the race, more than the $4.8 million the campaign had raised. That means the campaign was out of money a month before the primary.
The $950,000 loan, made on May 29, fills that gap. Bennet spokesperson Nellie Moran told The Colorado Sun that the loan was necessary to counteract Weiser attacks.
Section 304 of the Bipartisan Campaign Reform Act of 2002 (also known as McCain-Feingold) limited federal candidates who loan money to their campaign from soliciting more than $250,000 from donors after Election Day to pay off that loan. But in 2022, the Supreme Court found that section unconstitutional in a 6-3 ruling, arguing that it unfairly burdened candidates (specifically Texas Sen. Ted Cruz, who was the defendant in the case) who want to use debt to finance their election campaigns, and restricted their “free speech” to do so.
“The only permissible ground for restricting political speech recognized by this Court is the prevention of ‘quid pro quo’ corruption or its appearance,” wrote Chief Justice John Roberts for the majority. But he dismissed this by saying that contribution limits for individual donations, currently set at $3,500 for primary and general elections, would sufficiently prevent such corruption.
Colorado is not one of the ten states that limit post-election candidate loan repayment. Therefore, after the election Bennet would be free to solicit funds to retire campaign debt and get back his money.
INDIVIDUALS AND FEDERAL PACS ARE LIMITED to $725 donations for governor in Colorado per election cycle, one of the strictest limits in the nation. However, registered “small donor committees” that take contributions from individuals can give up to $7,825. And powerful entities and their families can find enough like-minded donors within their networks or organizations to pay off candidate loans cycle after cycle.
“The only limit is that the donations must abide by the applicable personal contribution limits per election,” Holman said. “But those same donors can be repeatedly solicited for donations as long as the campaign committee exists.”
Candidates can even charge high interest rates on these personal loans and actually make money off the deal. Nearly 30 years ago, Rep. Grace Napolitano charged an 18 percent interest rate on a personal loan to her campaign, and held “debt retirement fundraisers” to collect tens of thousands of dollars in earnings. Eight years after the initial loan, she reduced the interest rate to 10 percent. (Bennet’s loan is listed as interest-free.)
The way personal loans from elected officials to their campaigns are treated “raises serious concerns about quid pro quo corruption,” said Ghosh, of Campaign Legal Center. In Bennet’s case, he would be an elected official whether he wins the race for governor or not, either in Denver or in Washington.
As a senator, Bennet could not transfer federal campaign money to retire his gubernatorial campaign debt. But he could ask donors to contribute for that purpose. Any post-campaign donation, as Campaign Legal Center has explained, amounts to deliberately putting money into an elected official’s pocket, in a way that could be easily confirmed by the candidate. A powerful officeholder could be in a position to deliver benefits to the donor in exchange for that personal financial benefit.
Bennet has been dogged by seeming intermingling of federal and state campaign dollars. Recent ads released by the gubernatorial campaign included the disclaimer “Paid for by Bennet for Colorado,” which is his Senate account. The ads were taken down and relabeled. A pending legal case charges that Bennet paid for travel expenses in the governor’s race with Senate campaign funds.
“How can voters expect Bennet to be the chief enforcer of Colorado’s state laws when he can’t even follow or understand basic laws himself,” the Weiser campaign said in a statement.
The potential conflicts arising from the personal loan contrast with the Bennet campaign’s repeated claims about “Pay to Play Phil.” They’ve seized upon the claim first uncovered by CBS Colorado about donations from lawyers at firms that were negotiating with the attorney general’s office. There was no confirmation that the individual lawyers who donated to Weiser were working for the companies he was investigating or suing, and the Weiser campaign has not been presented with any such information. Weiser in the past has vowed to return “contributions from anyone tied to a pending investigation,” but has drawn the line at lawyers working directly for the companies involved.
“Phil’s campaign is people-powered, he follows our campaign finance laws, and he doesn’t take contributions from anyone involved in active litigation against his office or who works at a corporation his office is in litigation with,” Weiser spokesperson Nate Jackson said.
