Slate's Bizbox
explainer: Answers to your questions about the news.

How a President Raises Money

Bruce Gottlieb
Posted Tuesday, Oct. 27, 1998, at 10:47 PM ET

Abe Hirschfeld, an "eccentric" millionaire, offered Paula Jones $1 million to drop her suit against the president. Clinton reportedly intends to decline. He'll pay for his legal settlement the old-fashioned way--which means accepting donations from sympathizers such as Hollywood bigshots and liberal business executives. But wait. Is it really legal to write a large check, even if less than a million bucks, to the president--and for the president to accept it?

Yes, it is. There are laws forbidding government employees to accept gifts from the public, but the president and vice-president are exempt. Why? For "considerations relating to the conduct of their offices, including those of protocol and etiquette," reads the Office of Governmental Ethics' regulation. The president can therefore accept any personal gift he wants--even cash--so long as it is not a provable bribe. The million dollar offer is kosher (though Hirschfeld would have to pay a hefty gift tax).

Clinton has a legal defense fund, which he could dip into to pay off Paula Jones. Legally, the fund could accept donations of any amount, but the fund accepts no more than $10,000 from an individual. (An earlier version of the fund had a $1000 limit and couldn't actively solicit donations--but it wasn't bringing in enough, so the rules were loosened.)

Should the president be permitted to accept unlimited cash gifts from supporters? It certainly is inconsistent with the spirit of campaign finance laws. Laws restricting campaign giving--which most people, including Clinton, think aren't strict enough--are supposed to prevent politicians from becoming beholden to wealthy individuals. If anything, legal defense money makes a president more beholden to wealthy supporters than campaign contributions. But politicians who need to hire expensive defense lawyers are in a peculiar bind. They can't afford to pay the bills themselves. During Watergate, President Nixon's personal lawyer James St. Clair was paid by the government--but that is now out-of-the-question. Publicity-seeking or public-spirited attorneys would be happy to represent the president for free, or at a big discount--but that would be considered a large in-kind contribution. So it's either let them raise money or let them use legal services.

Next question?

Explainer thanks Slate reader Patrick Whittle for suggesting this topic.

Print This ArticlePRINTDiscuss this in The FrayDISCUSSEmail to a FriendE-MAIL
Share on FacebookPost to MySpace!Share with MixxDigg ThisShare with RedditShare with del.icio.usShare with FurlShare with Ma.gnolia.comShare with SphereShare with Stumble Upon
Bruce Gottlieb is a law student and a former Slate staff writer.
Join the Fray: our reader discussion forum
What did you think of this article?
POST A MESSAGE | READ MESSAGES
Washington Post