Where will Joe Biden’s campaign funds go if he drops out?

• President Joe Biden announced on Sunday that he is withdrawing from his re-election campaign.
• Both donors and voters will now be wondering where the funds from his campaign coffers will go.
• The Biden team can refund its donors their money or give it to the DNC.

President Joe Biden announced Sunday that he is dropping out of his re-election campaign, leaving donors and voters wondering what will happen to the hundreds of millions of dollars he raised to support his candidacy.

While campaign finance experts disagree on how the finer details of this law should be implemented, one thing is clear: Democrats have options.

Biden’s war chest capitulates

Biden’s announcement came after nearly a month of sustained criticism of his ability to remain a contender following his performance in the debate against former President Donald Trump on June 27. Following the debate, in which Biden rambled and repeatedly appeared to lose his train of thought, many top Democratic politicians urged Biden to step down to give the party the best chance of defeating Trump.

But Biden’s campaign said donations jumped after the debate. The Associated Press reported that his re-election campaign raised $264 million in the second quarter of the year alone, in addition to $240 million in cash. Still, other major Democratic donors, including Netflix co-founder Reed Hastings and Abigail Disney, pledged not to give to the party until Biden drops out.

Now that this has happened, the Democrats have a huge pot of money at their disposal.

Where Biden’s money is going now

Campaign finance experts disagree on exactly what the Biden campaign can do with its money.

Charles Spies, a Republican campaign finance expert, argued in an opinion piece in the Wall Street Journal that Biden would have had to formally accept the Democratic presidential nomination before he could give existing campaign funds to Vice President Kamala Harris if she remained on the ballot, whom Biden endorsed shortly after announcing his withdrawal from the race.

But without accepting the nomination, Spies wrote, Biden is now subject to the Federal Election Campaign Act’s rules governing “excess campaign funds” and cannot donate more than $2,000 to any other candidate, including Harris.

Saurav Ghosh, director of federal campaign finance reform at the Campaign Legal Center, told Reuters that as long as Harris is in the race, she automatically has access to the campaign’s shared funds, regardless of whether the two have formally accepted the nomination or not, because both names appear on the same campaign registration documents.

However, Spies and Ghosh pointed out that there are workarounds in both cases. The Biden campaign could either refund its donors, Ghosh told Reuters, or, as they agreed, return the money to the Democratic National Committee.

Dan McMillan, founder and executive director of Save Democracy in America, a nonpartisan campaign to end the influence of corporate and special interest money in politics, told Business Insider that it ultimately doesn’t matter which expert was right in their assessment of the formal nomination – Biden wasn’t in the race long enough to accept the nomination, and it wouldn’t have made a difference if he had.

There may be legal issues surrounding exactly how such scenarios should play out, but the final decision in these cases will not be made until long after the election.

“That’s really not an argument, because the money is not going to be wasted,” McMillan told BI. “If someone other than Harris is nominated, the campaign will simply give that money to the Democratic National Committee or other party committees – and those committees can then spend the money in ways that benefit the presidential campaigns of other Democratic candidates. So the money will not be lost.”

If the funds are ultimately transferred to the Democratic National Committee, the party can spend unlimited amounts on ads promoting a new candidate and up to $32 million directly on a new campaign. The rest of the funds can be distributed to other action committees.

Whoever the Democratic candidate ends up being, McMillan said, he will not lack financial support.

“It will make a big difference how sensibly the campaign is conducted,” McMillan said.