Clinton’s exit could leave fundraising hole for Dems

Sen. Hillary Rodham Clinton’s (D-N.Y.) move to the
Department of State could remove a significant fundraiser for Democrats.

Clinton, whom President-elect Obama has nominated as
secretary of State, has raised and contributed millions of dollars to
candidates and party committees since her election in 2000, and the former
first lady has never been shy in traveling around the country to lend her fame
to fellow Democrats.

“If you were organizing an event with her, you know you
can put a number next to her name because of her star power and network,” said
Chris Lehane, a Democratic strategist. “Up until you had Obama, she was in a
category all by herself.”

{mosads}Now that could change. While campaign finance lawyers
contacted by The Hill said no laws would prevent Clinton from keeping her
campaign committees open, cabinet officials typically refrain from overt political
campaigning after their confirmation.

“When a cabinet appointment is acting as a surrogate for
a presidential reelection campaign, they leave the room when the pitch is being
made,” said Kenneth Gross, a partner at Skadden Arps Slate Meagher & Flom.
“You are allowed to give. You are allowed to fundraise. You just have to be a
wallflower.”

Clinton, who is readying for her confirmation hearing
before the Senate Foreign Relations Committee, has not made a decision on
whether to shutter her campaign committees.

“We will be addressing those questions in due course,”
said Philippe Reines, Clinton’s spokesman.

Clinton’s leadership political action committee, HillPAC,
is one of the largest contributors to other candidates. She has funneled more
than $2.9 million to candidates and party committees at the federal and state
level since the 2002 election cycle through the PAC. HillPAC and Clinton’s
Senate campaign committee, Friends of Hillary, have hosted nearly 1,000 events
and fundraisers for national committees, state parties and almost 120
candidates across the country, according to Clinton aides.

After losing the Democratic nomination to Obama, Clinton
became a prominent surrogate for her former rival. She headlined more than 70
events and fundraisers in close to 20 states. She also raised almost $1.2
million for the Democratic Senatorial Campaign Committee in 2008 through events
in California, Washington, D.C., Massachusetts, and North Carolina, according
to her aides.

Clinton has several options. She could close down her
committees and give their funds to charity or to national party committees,
such as the DSCC or the Democratic National Committee. But campaign finance
rules would place a $15,000 ceiling on any contribution from her leadership PAC
to a party committee.

Clinton could also suspend her committees and keep their
accounts open while serving at State. “The money could just sit there,” said
Rob Kelner, who heads the election and political law practice group at
Covington & Burling.

If Clinton continued to fundraise and contribute to
candidates, however, she could attract negative attention for what would be
unusual activity by a cabinet official.

“I am sure she would anticipate news stories on her PAC
if she is contributing to candidates during her time as secretary of State,
which would be an awful distraction,” Kelner said.

The Hatch Act, a federal law intended to prevent the use
of government resources for political purposes, and other rules limit
fundraising and campaign activities by federal workers. Most Senate-confirmed
political appointees, including cabinet officers, however, are exempt from the
Hatch Act. They are prohibited from soliciting government employees for
campaign contributions, but may still raise funds for candidates.

Another complication is that Clinton still has debt from
her presidential campaign. According to a Federal Election Commission report
released on Dec. 20. Clinton’s campaign remained close to $6.4 million in debt
at the end of November.

While Democrats will miss Clinton’s fundraising prowess,
many see a potential replacement in Caroline Kennedy. President John F.
Kennedy’s daughter is campaigning for an appointment to Clinton’s Senate seat
by New York Governor David Paterson (D).

Kennedy’s endorsement of Obama during the Democratic
presidential primary helped establish the Illinois senator’s bona fides with
the Democratic establishment. Her prowess as a fundraiser already has been
impressive. A well-known philanthropist, Kennedy has raised more than $65
million in private support for New York City’s public schools.

“The moment it becomes official, she becomes a
superstar,” Lehane said about Kennedy if she became a senator.

While Lehane said Kennedy could not match Clinton’s
fundraising abilities immediately, her name recognition alone could help other
Democratic candidates with campaign funds for the 2010 midterm elections.
That’s a key selling point for Kennedy, who could help other New York
politicians, including Patterson, who will be on the 2010 ballot.

“Does that mean she can rise to the level of going out to
the states and helping with your midterm candidates? Absolutely,” Lehane said.
“Everyone wants a little bit of Camelot in their state.”