Pro-Rick Perry super PACs give back millions

Groups could have kept cash, disgorged it instead

By

 Updated:

A group of super PACs backing former Texas Gov. Rick Perry’s now-defunct presidential bid has refunded to donors most of the millions of dollars they collected, the groups’ finance chairman said.

“We’re still settling up with a few vendors … but we had a pretty good estimate of what those were so we were able to hold back a little bit of the reserve and refund the rest,” Brint Ryan, the super PACs’ finance chairman who runs a Dallas-based tax services company, told the Center for Public Integrity.

The pro-Perry super PACs, all named variations on Opportunity and Freedom PAC, are legally allowed to accept unlimited contributions.

They collectively reported raising $12.8 million during the first half of the year. Austin Barbour, the senior adviser, said they had received another $4 million contribution from a single donor after the reporting deadline, bringing the total to nearly $17 million.

The bulk of the groups’ money came from a relatively small number of donors. Dallas billionaire Kelcy Warren, Perry’s campaign finance chairman, contributed $6 million. Darwin Deason, also a Dallas billionaire, gave $5 million.

Jordan Russell, a spokesman for the Opportunity and Freedom PAC groups, declined to comment.

It’s unusual for a super PAC to find itself flush with cash after a candidate drops out.

But Perry’s exit — the first this year among major presidential candidates — was abrupt: He suspended his campaign late last Friday in the face of a dwindling bankroll that forced him to lay off staff, as well as a series of polls that showed him slogging along toward the bottom of the Republican field.

Legally, there’s nothing to stop donors from attaching formal conditions to their contributions to super PACs, mandating that the money only be used for certain expenses or stipulating what would happen if a candidate drops out.

But that practice isn’t common.

Barbour initially said he was reviewing what the law allowed the super PAC to do in such circumstances and would discuss options with donors. Deason’s son said publicly that the family expected the money to be returned.

Refunding the money was the right thing to do, said Ryan, adding that he personally controls disbursement of the super PACs’ funds.

“It was my view that those donors may want to make other arrangements with their money, and the sooner we get it back to them, the quicker they could do that,” Ryan said.

The biggest donors to the pro-Perry super PACs are being heavily courted by other candidates.

Ryan, too, said his phone has been ringing, though he wouldn’t say which candidates have called and he isn’t ready to make any commitments.

“Now I know how the prom queen feels,” he said wryly.

Perry’s campaign reported raising just $1.14 million between his official announcement June 4 and the reporting deadline at the end of June.

After news of Perry’s campaign cash crunch broke, Barbour said the super PACs would fill the void on Perry’s behalf. Super PACs are prohibited from coordinating strategy with the campaigns they support, but many single-candidate super PACs nevertheless maintain close ties with the candidates they back.

The pro-Perry super PACs hired operatives in Iowa and bought more ads than anyone else on the Republican side of the race, airing nearly one-third of all the TV ads in the race to date.

But the efforts came to a halt Friday with news of Perry’s abrupt withdrawal, a move that surprised his backers at Opportunity and Freedom PAC and showed the limits of what super PACs can do to save a campaign starved for cash and support.

Ryan said the super PACs’ efforts were hampered by legal restrictions that prevent it coordinating with the campaign directly.

Super PACs can buy ads and do a lot of things, but they can’t pay a campaign committee’s staff or, in his view, effectively operate a grassroots effort, he said.

“It may be that you get a bunch of wealthy donors whose money is effectively stranded and can’t be used effectively,” he said.

The lessons of Perry’s aborted run have the potential to resonate with other candidates.

Outside groups dedicated to backing specific presidential candidates are playing an unprecedented role in the 2016 election cycle, with nearly every contender boasting one.

Several Republican candidates — former Florida Gov. Jeb Bush, businesswoman Carly Fiorina, Sen. Ted Cruz of Texas and others — are relying heavily on super PACs that have raised many times the money of their campaigns.

In many cases, the super PACs have assumed functions traditionally performed by the campaign and so far, are sponsoring the vast majority of television ads.

Supportive super PACs are “kind of a blessing for candidates” said Iowa State University political science professor David Andersen.

“As long as you have a few very wealthy donors who are willing to finance your campaign through a super PAC, you can last even if your poll numbers are terrible,” he said.

Perry, Andersen continued, could have stayed in the race longer.

“With the rise of super PACs, you don’t need a wide base of support,” Andersen said. “All you need is one billionaire who is willing to give you $20 million and get through the primary system.”

But, as in Perry’s case, the candidates aren’t able to directly control the super PACs’ resources and a super PAC can’t pay a candidate’s expenses. The pro-Perry super PACs’ money couldn’t buy a way around that problem.

Michael Beckel contributed to this story.

This story was co-published with the Texas Tribune.

Find our content interesting and worth supporting?

Donate to The Center for Public Integrity.

Donate now
Donate now