If someone loaned you $20 million to start an enterprise, would you feel indebted to that person after you paid him or her back? What if the loan were interest-free?
I’m asking this question because Americans Elect, the 501c4 corporation trying to arrange the election of its own presidential candidate in 2012, has been “financed with some serious hedge-fund money,” according to Thomas Friedman in a column that Americans Elect has embraced. According to John Avlon, a spokesman for the closely allied organization No Labels, Americans Elect has received $20 million from members of this wealthy investor class in average increments of $400,000. Despite Americans Elect’s insistence that “none of our funding comes from special interests,” it appears to be awash in special-interest hedge fund money.
But according to Americans Elect, that’s all OK, because it says it will pay the money back, or at least “the bulk of” it:
We intend to pay back the bulk of our initial financing as we recruit delegates, so that no single individual will have contributed more than $10K. And so that our candidates will answer only to the American people.
Megafinancing from a small number of very wealthy people is a crucial part of Americans Elect’s plan to elect its own President of the United States. I can declare this with confidence because the previous incarnation of Americans Elect, Unity08, sued in federal court for the right to pursue campaign megafinancing outside the limits of campaign finance laws. Ditching its earlier commitment to a campaign based on small-dollar donations, Unity08 declared to the court that it was essential for its presidential aspirations that it obtain very large loans from a small number of benefactors.
“A number of individuals otherwise prepared to make loans in these larger amounts have been unwilling to do so because of the Commission’s ruling… A favorable ruling in the near term may make it possible to revive Unity08 through substantial loans from those individuals who have expressed a willingness to make such loans but not in the face of legal uncertainty about their exposure to possible liability for doing so.”
“Unity08 is currently soliciting funds primarily through the Internet and personal contacts…. It concluded, however, that, in order to have the best possible chance of raising monies to defray the cost of obtaining ballot access as an organization in thirty-seven (37) states prior to the 2008 election, it should accept donations from individuals, which may be in the form of loans, without limitation as to the amount.”
In case you’re not clear on the matter, here’s proof that Americans Elect is Unity08 resurrected.
And so I’ll restate the original question of this post: If a small set of wealthy people loaned Americans Elect $20 million interest free to start a presidential campaign — a loan without which Americans Elect says it could not operate — is Americans Elect indebted to those people?