Republican U.S. Sen. Rand Paul, a self-described fiscal conservative who calls debt “the greatest threat to our national security,” has more than $300,000 in unpaid bills from his failed presidential run last winter.
Rand Paul for President reported $301,108 in debts and $2,558 in cash on hand as of June 30 in its most recent filing to the Federal Election Commission. The campaign owes dozens of businesses and individuals in Iowa, New Hampshire and elsewhere, for rent, insurance, telemarketing, phone and internet access, legal fees, consulting, facility and equipment rental and expense reimbursements promised to campaign workers.
Peter Kutrumanes said his company “just won’t do business” with Paul again in the future.
“We try to get payment up front. Unfortunately, in this particular case, for whatever reason, we didn’t,” said Kutrumanes, general manager of Hartford Technology Rental in East Dundee, Ill., which is owed $3,962 for equipment it leased to Paul’s campaign. “We’re a little company. That amount, it’s a salesperson’s salary for a month. It’s absolutely a big deal.”
Brian Baltutat said he met Paul in Des Moines for several hours when his start-up company, Bell Metrix, connected the campaign with internet phone service. Six months later, he’s still waiting for the $500 the campaign agreed to pay him.
The first thing we heard was that a check had been issued and was sent out. And then they said that they wanted to move it to their next quarter, so the payment would be coming to us a month or two later, in April or May. We haven’t heard anything from them since.
“The first thing we heard was that a check had been issued and was sent out. And then they said that they wanted to move it to their next quarter, so the payment would be coming to us a month or two later, in April or May,” Baltutat said. “We haven’t heard anything from them since.”
After quitting the presidential race in February, Paul returned to Kentucky, where he has raised $3.1 million to run for re-election to the Senate against Democratic challenger Jim Gray, the mayor of Lexington.
Paul will pay his bills, campaign spokeswoman Kelsey Cooper said Friday. During the month of June, the campaign reduced its debt by $9,771. Overall, Paul’s presidential campaign raised and spent $12 million, so the amount now outstanding is “less than 3 percent” of that total, Cooper said.
“Everyone will be paid in full,” Cooper said, declining to give details on where or when that money might originate. “Closing down campaigns takes time, as evidenced by other presidential campaigns that are at similar stages of doing so.”
Of the five senators who unsuccessfully ran for president this year, Paul and Marco Rubio, R-Fla., ended their campaigns in the red. The others — Bernie Sanders, I-Vt.; Ted Cruz, R-Texas; and Lindsey Graham, R-S.C. — have more than enough money banked to pay their remaining creditors. Sanders, for example, reports $898,879 in debt with $8 million in cash on hand. Cruz has $775,734 in debt and $6.3 million in cash on hand.
The keystone of Paul’s political career has been his opposition to deficit spending by the government. Last October, for instance, he briefly filibustered a bipartisan federal budget bill because it would raise the nation’s debt limit. American families are careful to not recklessly spend more than they make, and politicians should follow that example, he said at the time.
“The number one priority up here shouldn’t be trying to scrounge around and find new money to spend,” Paul said in a Senate floor speech during his filibuster. “It should be trying to conserve. It should be doing something that some say is radical but I say is the absolute essence of common sense, and that is we should spend what comes in.”
Cooper rejected a comparison between Paul’s rhetoric and his campaign’s outstanding debt.
It’s beyond ridiculous to suggest that the very typical and normal proceedings of closing out a campaign have anything to do with Dr. Paul’s stellar record of fiscal conservatism, particularly considering that he’s returned nearly $2.5 million in taxpayer dollars from his Senate office operating budget back to the Treasury to date.
Kelsey Cooper, spokeswoman for U.S. Sen. Rand Paul
“It’s beyond ridiculous to suggest that the very typical and normal proceedings of closing out a campaign have anything to do with Dr. Paul’s stellar record of fiscal conservatism, particularly considering that he’s returned nearly $2.5 million in taxpayer dollars from his Senate office operating budget back to the Treasury to date,” she said.
Although his presidential campaign’s bank account is nearly empty, Paul has options. One involves transferring funds from his other political committees that are more flush. The month after he dropped his White House bid, Paul moved $23,025 from his presidential campaign to his Senate campaign and $186,951 more to a joint fund-raising committee shared by his Senate campaign and the Kentucky Republican Party. Paul might be able to transfer some of this money back if he doesn’t spend it during his coming battle with Gray.
Even if he has to start over after an expensive Senate race, Paul shouldn’t have any problem retroactively collecting money for his failed presidential campaign as long as voters send him back to Congress, said Paul Ryan, deputy executive director of the Campaign Legal Center in Washington.
“Any seated federal officeholder, the wealthy donors who want special access to them, they’re always happy to break open their checkbooks when asked,” Ryan said. “Donors want to get in good with the politician. They want their calls returned. They won’t care if he’s asking for checks for his next Senate race or his last presidential race or his leadership PAC, past, present or future, whatever. They’ll just write him a check.”
“The only time you see campaign debts that cannot be repaid is when an officeholder loses, because then, he has nothing to offer,” Ryan said. “It’s troubling, yes, but that’s the way it works in Washington.”
Paul’s Senate challenger, Gray, who is wealthy, has racked up his own campaign debt this year of just over $1 million, nearly all of which represents money he has loaned to his campaign. Gray is likely to forfeit most of that. The FEC prohibits federal candidates from collecting more than $250,000 to retire campaign debts owed to themselves after an election, to prevent millionaire politicians from putting donors’ dollars directly into their own pockets, Ryan said.
Baltutat, who hooked up phones so Paul’s presidential campaign could call potential donors, said he should have known better than to extend credit to a politician. The Iowa caucus brings a frantic crowd of presidential hopefuls through his city for a month or two every four years.
“We’re in Des Moines, so we see it all the time,” Baltutat said. “I know people who are owed tens of thousands of dollars from candidates. Even after they’re elected, they don’t pay. In this town, it’s known that if you do any work for politicians, you need to get paid as quickly as possible, because once they’re gone, they’re gone.”
Rand Paul’s debt
These are the unpaid debts of Rand Paul for President on June 30, as reported by the campaign to the Federal Election Commission:
▪ Caplin & Drysdale, New York, N.Y.; legal fees; $93,012
▪ Paramount Communication Inc., Leesburg, Va.; e-marketing; $46,045
▪ Victory Enterprises, Davenport, Iowa; online store sales and printing; $29,054
▪ Optimizely Inc., San Francisco, Calif.; web services; $26,000
▪ i360, Baltimore, Md.; telemarketing; $22,369
▪ Professional Data Services, Athens, Ga.; compliance consulting; $18,853
▪ C Street Properties, Grand Rapids, Mich; office rent; $12,196
▪ Rand Paul for Senate, Newport, Ky.; internet domain lease; $10,000
▪ Lockton Affinity LLC, Kansas City, Mo.; insurance; $8,491
▪ Victory Phones, Grand Rapids, Mich.; telemarketing; $5,154
▪ UPT Strategies, Charleston, S.C.; campaign strategy consulting; $5,000
▪ Primary Data Solutions, Springfield, Va.; data work; $3,980
▪ Hartford Technology Rental, East Dundee, Ill.; office equipment rental; $3,962
▪ University of Iowa Memorial Union, Iowa City, Iowa; event facility and equipment rental; $3,339
▪ Eric Bedingfield, Belton, S.C.; campaign strategy consulting; $2,500
▪ Forward Strategy Partners, Prospect, Ky.; fund-raising consulting; $2,395
▪ VegasNAP LLC, Las Vegas, Nev.; office rent; $2,200
▪ Jonathan Van Norman, Ankeny, Iowa; travel reimbursement; $2,056
▪ Christine Touchette, Hampstead, N.H.; rent expense; $1,244
▪ LexisNexis, Carol Stream, Ill.; research; $1,173
▪ Bell Metrix Inc., Des Moines, Iowa; data infrastructure; $500
▪ Lukas Grund, Cheltenham, Pa.; living stipend for college intern; $500
▪ Drake University, Des Moines, Iowa; event facility rental; $396
▪ J. Allen Seymour CPA PC, Watkinsville, Ga.; accounting services; $300
▪ Sergio Gor, Falls Church, Va.; telephone; $201
▪ Jeff Isaak, Ankeny, Iowa; postage; $112
▪ Ron Schnell, Weston, Fla., utilities, $39
▪ Nicole Demont, Washington, D.C.; utilities; $26