Sutton Amends SB 54 to Ban Conversion of Campaign Funds to Personal Use

The most significant IM22 replacement bill, Senate Bill 54, is still hung up in Senate State Affairs. After hearings Monday and Wednesday, the committee is still working on amendments.

One of the most significant amendments came from Democratic Minority Leader Billie Sutton, who tacked on this provision to outlaw the conversion of campaign funds to personal use:

Contributions received by a candidate campaign committee may not be used for any purpose other than a purpose related to a candidate’s campaign. Contributions received by a candidate campaign committee that are not used for any purpose related to a candidate’s campaign may be donated to any other candidate, candidate campaign committee, or nonprofit charitable organization [Senate Bill 54, Amendment 54ff, approved 2017.02.15].

Right now, candidates for statewide, legislative, and lower offices can spend the campaign funds on groceries, beer, home mortgages, flowers for their secret lovers, whatever they want. The only restrictions on such conversion of campaign funds to personal use would be (a) public scorn, (b) torqued-off donors, and (c) IRS requirements that such conversions be declared as taxable income. Senator Sutton’s amendment would end such personal conversion.

Unclear is whether the Sutton amendment would prevent candidates from paying themselves a salary from their campaign funds. FEC rules allow Congressional candidates to write themselves a check, although that salary cannot exceed the salary of the office for which the candidate is running or the income the candidate earned the previous year, which is less. Sutton’s amendment doesn’t address the salary question and thus could leave a door open for candidates to pocket their campaign funds for personal use.

Senate State Affairs will take up SB 54, along with campaign finance restriction SB 173, ethics complaint reform SB 151, and Governor Daugaard’s protest/war zone SB 176next Wednesday, the last day for committees to deliver their bills.


6 Responses to Sutton Amends SB 54 to Ban Conversion of Campaign Funds to Personal Use

  1. That’s a great bill, and long overdue. I believe that Bill Janklow pocketed about $900,000 from his campaign account. Of course he had to pay income taxes on that, but how’s that for legalized bribery? Fill an official’s campaign account and they can take it with them when they leave office. I have no idea how much Rounds may have pocketed from his campaign account, if any.

    Elected officials should be paid for their services as elected officials only by the taxpayer funds set aside for their job. Their public service should not be a means by which they can fill their pockets.

  2. Ror, you mention Rounds. As of December 31, 2016, “Rounds for Governor” held $118,486.71.

    In 2012, Rounds gave $41,000 to other committees, including $33K to his own Peter Norbeck PAC. He also spent over $6K on printing and advertising. At the end of 2012, Rounds for Governor had $159,767.38 on hand.

    Pre-primary 2014, Rounds for Senate paid Rounds for Governor $750 for “Use of Advertising Materials.”

    In 2015, Rounds for Governor gave the SDGOP $42,000.

  3. drey samuelson

    Hmmmm… I wonder if Governor Daugaard has a lot of enthusiasm for this bill? He’s got a lot more in his campaign account than Mike Rounds…

  4. You know, Drey, as long as the amendment still allows candidates to dump their surpluses on other candidates and PACs, I don’t think Daugaard would buck too much against it.

  5. So here’s something to chew on when it comes to campaign contributions.

    Say I contributed money to Cory’s campaign fund during his run for public office.

    Say he decides he’s not going to run for office anymore and closes out that bank account. Under this law, he’d have to send that money somewhere.

    Maybe he gives it to the next Democratic candidate in the district. Maybe he gives it to the Democratic party. Maybe he writes a check to Heifer International.

    Problem is, I didn’t give Cory money for those things; I gave him money to get elected.

    If I had wanted money to go to those other places, I would’ve given the money directly.

    I think if we prevent the campaign check horse trading altogether we’d be in a better position. Rounds shouldn’t be able to write checks to other campaigns and committees. The money should be available solely for his campaign.

    If you tied in the democracy credits, then it’d make a lot of sense for unused funds to revert back to the state.

  6. Fair point, Wayne… and that’s exactly how the Democracy Credits program was designed: the credits were absolutely not transferrable.