FEC Orders Gary Johnson’s 2012 Campaign to Repay $332k

In a letter dated April 5 and addressed to Governor Gary Johnson and Gary Johnson 2012, Inc., the Federal Election Commission states that it has “determined, after administrative review, that Governor Johnson and the Committee must repay $332,191 to the United States Treasury. Governor Johnson and the Committee must repay this amount within 30 calendar days after service of this determination.” Attached to the letter is a detailed statement of reasons, summarized as a finding that “the Committee used matching funds to defray non-qualified campaign expenses.”

Gary Johnson 2012, Inc. received a total of $632,016.75 in FEC matching funds for the 2012 election cycle, in which Johnson first sought the Republican Party’s presidential nomination then became the Libertarian Party’s nominee. Ballot access expert Richard Winger notes (via email) that “it is very common for candidates who receive primary season matching funds to be audited and for the FEC to find that the candidates owes some of the money back again.”

As of its most recent FEC filing (year-end for 2015), Gary Johnson 2012, Inc. lists remaining unresolved campaign debt, prior to the FEC’s demand, of $1,538,118.73.

Johnson is seeking the Libertarian Party’s 2016 presidential nomination as well.

The pdf is below:

Download (PDF, 1.52MB)

73 thoughts on “FEC Orders Gary Johnson’s 2012 Campaign to Repay $332k

  1. Thomas L. Knapp Post author

    Andy,

    One thing to notice:

    Most FEC stuff is addressed to campaign committees. This letter is addressed to the committee AND to the candidate.

    What that says to me is that they expect their money even if he has to pay it himself. I don’t know what his net worth or liquidity is, but I’m assuming $332k is a significant amount to him.

  2. Wes Wagner

    At issue is the demand of a refund of matching funds that were not spent on qualified expenditures. This does not resolve all other debts. This is a ruling only on that portion of issues. There are more issues.

  3. Andy

    Gary Johnson has reported net worth of $10 million. $332,000 is a big hunk of change, but he can afford it.

  4. Richard Winger

    The FEC told the 2012 Gary Johnson campaign on May 31, 2014, that it had been overpaid this amount. The new news is that the FEC then rejected Johnson’s arguments for why the 2014 decision was wrong.

  5. George Dance

    What does this mean? “On November 14, 2013 , the Commission made a final determination that Johnson was no longer
    eligible to receive matching payments after his DOl because the Committee could not demonstrate that it had net
    outstanding campaign obligations
    …. After conducting the subsequent mandatory audit of the Committee, the Commission determined that Johnson continued to have net outstanding campaign obligations.” (stress added)

  6. Thomas L. Knapp Post author

    Wes,

    Correct. Which is why I wrote:

    “As of its most recent FEC filing (year-end for 2015), Gary Johnson 2012, Inc. lists remaining unresolved campaign debt, prior to the FEC’s demand, of $1,538,118.73.”

  7. Joe Wendt

    From where I stand, Gary Johnson lied in the Florida debate, and any debate for that matter, when he claimed that the debt is off the books. He lied to the membership, he should be disqualified as a candidate.

  8. Thomas L. Knapp Post author

    Joe,

    Is there video of the Florida debate? I’ve heard about that exchange, but haven’t seen it. I’ve also heard that Johnson has given assurances of no remaining campaign debt in other settings.

    Of course, disqualification is a matter of whether or not the delegates decide to vote for him.

    But yeah, I’d say lying to the party multiple times about his campaign finances since 2012 (starting with the April/May 2012 pre-nomination lie that his debt was only $152k when it was actually $1.078 million), running his general election campaign $1.4 million into the red, now owing the FEC another $332k refund of a welfare check we should never have put him in a position to take, etc. should be big factors in deciding whether or not he’s our best bet this year.

  9. NewFederalist

    Oh, oh… look like Prof. Phillies was right again! Perhaps the convention will nominate Johnson again AND put that famous “Reagan Libertarian” Wayne Allyn Root and the ticket just for balance! 🙂

  10. Andy

    Tom, video from the LP of FL convention that contained that exchange between Perry and Johnson is post in another thread here.

  11. Joe Wendt

    @ Knapp,

    Amazingly enough, the Johnson people have provided the exchange between Johnson, Perry, & Phillies where he claimed that the debts were off the books:

  12. Thomas L. Knapp Post author

    Well, now, that IS an interesting exchange.

    On the plus side for Johnson, he was technically correct: The debt is owed by his 2012 campaign committee, not by his 2016 campaign committee.

    That fact might help him a little, if he didn’t come apart at the seams and start yelling that people are liars when they point out that his 2012 campaign committee does indeed have $1.5x million ($1.8x million with this new FEC demand) in outstanding debt.

    Whining that the FEC won’t let him just write that debt off doesn’t actually make the debt disappear. It just makes Johnson look like whiny in addition to looking cornered and irritable.

    Yes, in theory Johnson can raise money for his 2016 campaign without reference to the debt amassed by his 2012 campaign. Of course, that raises two other questions:

    1) Given his multiple attempts to scam his way out of the debt — including submitting “repayment plans” to the FEC that don’t actually involve any, um, REPAYMENT — will he be able to establish lines of credit for the things that a general election campaign needs to do?

    2) Speaking of general election campaigns, considering how little his 2012 general election campaign actually DID vis a vis CAMPAIGNING with $2.x million raised and spent and $1.x million borrowed and never repaid, is there any particular reason to believe that a second similar investment of trust is called for?

  13. Auditor General

    Which of you busybodies is owed money by Gary Johnson? Anyone?

    I thought so… What exactly is the relevance of a campaign committee’s debt to you?

  14. Thomas L. Knapp Post author

    “What exactly is the relevance of a campaign committee’s debt to you?”

    Well, let’s see:

    – Whether or not a candidate wallowing in past campaign debt will be able to secure credit as needed to run a good campaign.

    – Whether or not it makes an allegedly “fiscally responsible” party look good to have a presidential candidate who can’t seem to balance a checkbook or make good on his debts.

  15. Andy

    So we should not give a shit if other people are stiffed out of money? That is not very libertarian.

    Also, some people may be leery about donating to a campaign with all of these problems.

  16. George Dance

    From a first reading of the letter, it looks like:

    1) The FEC gave Johnson2012 $630K (all numbers rounded) for his primary campaign for the Libertarian nomination.
    2) After he won the nomination on May 5, Johnson2012 spent $1.2 million.
    3) The FEC considers any money spent after May 5 to be an “unqualified expense”.
    4) Johnson2012 says that it spent only privately-raised funds after May 5, and that the Commission has failed to show that any matching funds were spent on (3).
    5) The FEC rejects (4), saying that, because of (1), it considers all of Johnson2012’s funds to be a “mixture of private and public funding.”
    6) Accordingly the FEC wants repayment of a pro-rata portion of the entire $1.2 million.

    I certainly hope that Johnson2012 exercises its right to a judicial review. On the other hand, that will probably stretch out well past Memorial Day, so whichever way it’s finally resolved, it will continue to dog the 2016 campaign.

  17. Jill Pyeatt

    How do past Presidential campaigns compare? I seem to remember that Bob Barr ended his campaign with quite a bit of debt. What about Badnarik’s campaign?

  18. George Phillies

    Ooh, it’s Observer again.

    When you are our candidate, whether you are honest and pay your debts, or not, affects our good name. When a candidate is a wastrel profligate who spends far more money than he actually raised, putting the excess spending on his tab, that candidate is sending a message to the American people. The message is: Libertarians spend money just like Congress, far more cash out than in even when the economy is good. That’s a problem for all our other candidates, so it is very much our business.

  19. Thomas L. Knapp Post author

    Jill,

    George has a book coming out on the finances of Barr 2008 and Johnson 2012.

    Yes, I believe Barr had significant debt. In fact, I know that he stiffed Jim Bovard, who ghost-wrote his campaign book, for five figures (I helped Jim publicly dun him for payment at the 2010 national convention).

    My recollection is that Badnarik 2004 ended in the black. But I could be wrong on that. It was a pretty damn tight ship though, I’ll tell you that.

  20. George Phillies

    Tom, amusingly enough, when I was in the hospitality suite explaining to interested people who asked me that Gary Johnson 2012 debtors had no recourse against Gary Johnson or against Gary Johnson 2016 income, so it was safe to donate to Gary Johnson 2016, one of his staffers in the room threw a screaming fit in my direction. [I will confess that I had not taken into account the special rules relating to matching funds.]

  21. George Phillies

    Barr ended $200K in debt, round number, and paid off 30% of it.

    What did Johnson say in that clip:

    I lack sound, but Tom Knapp kindly gave me a transcript:

    Transcript:

    Moderator: Mr. Perry, same question.

    Perry: If my campaign raised between 1 to 1.5 million dollars, I would be doing a lot better than at least one of the candidates on this stage, who still owes about 1.4 million dollars [unintelligible because Johnson interjects]

    Johnson: That’s untrue. That is untrue.

    Perry: That’s what the FEC filings say …

    Johnson: The FEC will not allow us to take that off the books, that has been written off the books, the FEC will not let us take it off, they make us stay there, every penny that you donate to our campaign goes to the 2016 campaign, not, not a $1.3 million dol …

    Moderator: Order! There is not a free right of response. We’re going to con …

    Johnson: When there is an outright lie or an outright misrepresentation, yes …

    Moderator: You are out of order … and the money would still be owed to the 2012 campaign, the 2012 campaign …

    Johnson: What? You as the moderator are saying what? [moderator says something inaudible]. You are out of order.

  22. ATBAFT

    We might want to ask ourselves how much money it takes to run a minimally acceptable campaign.
    And can any of the proposed candidates raise even that amount? We keep hearing what a tremendous opportunity 2016 will be if Trump and Clinton are the corrupt parties’ candidates. But the LP needs serious dollars – never raised before – for any kind of visible and viable campaign. Browne was the last candidate whose campaign led to any appreciable growth in the size of the LP. Who has a real plan for 2016?

  23. George Phillies

    There was indeed a lie and outright misrepresentation here, and it was from Johnson:

    Perry “who still owes about 1.4 million dollars”

    Johnson “Johnson: That’s untrue. That is untrue.”

    Readers may confirm that at the time of the debate the Johnson debt was seen at
    http://docquery.fec.gov/cgi-bin/forms/C00495622/1040920/
    to be
    12. Debts and Obligations Owed BY the Committee $1,538,118.73 (commas inserted for readability).

    Johnson was lying through his teeth.

    Now the funny part. Johnson admits that the debt is still on the books
    “The FEC will not allow us to take that off the books”

    The liar here was Johnson, and I am going to make vigorously certain that all of my Libertarian contacts of which I have a very great number know that.

    Now I will make a closing comment:

    Listen to Johnson. A man who behaves like this should never have his finger anywhere near the nuclear trigger.

  24. George Phillies

    ” Browne was the last candidate whose campaign led to any appreciable growth in the size of the LP.”

    His campaign started in early 2016, and being charitable LP membership was flat in 2000 and fell rapidly thereafter.

  25. Thomas L. Knapp Post author

    “We might want to ask ourselves how much money it takes to run a minimally acceptable campaign.”

    That’s a recurring question and one we COULD address independently of, and prior to, the selection of candidates — with PACs and Super PACs raising money between presidential election cycles and then supporting the nominee’s campaign in various ways regardless of WHO the nominee is.

    Not that I have a problem with judging a candidate based on how well or poorly he or she does at raising funds. But that’s only one metric, and having independent fundraising and campaign spending in play would reduce its importance in favor of other things like “how well does this candidate present himself/herself personally and ideologically?”

  26. ATBAFT

    “His campaign started in early 2016, and being charitable LP membership was flat in 2000 and fell rapidly thereafter.”

    GP, didn’t his campaign in 1996 double membership from around 15,000 to more than 30,000? I know some of this gain was smoke and mirrors, and didn’t last long, but no other presidential candidate has come close to doubling the LP membership (perhaps Clark did, as the base was very small; the LP in 1988 had a little under 7,000 members but judicious use of the Ron Paul list boosted membership over
    10,000 within two years.)

  27. Marc Allan Feldman

    It is not unusual at all for those who are combination advisors/supporters/consultants to bill 100s of thousands of dollars or more in fees for their work, with no expectation whatsoever of being paid, unless the candidate is extremely successful at fundraising. They are really in-kind gifts, but the candidates don’t want to file them that way because they want the option to pay them in the unlikely event that there are eventually going to be able to raise funds.
    My guess is that:
    Are these debt holders expecting to be paid back? No.
    Are they upset about this? No.
    If Gary were to win and raise a lot of money, would they expect to be paid? Yes.

    “how much money it takes to run a minimally acceptable campaign?”
    That depends on what kind of a campaign you are running. To run a competitive traditional campaign against the Dems and GOP would require a competitive amount of money 1.5 to 2.5 billion dollars.
    To run a revolutionary campaign based on principles and political integrity?
    Revolutions require a huge change in thinking, not money. It’s hard to say.

  28. Thomas L. Knapp Post author

    “didn’t [Browne’s] campaign in 1996 double membership from around 15,000 to more than 30,000?”

    No. A number of things brought about that fake membership growth. Browne’s campaign was only part of it, and part of Browne’s part actually damaged the party’s finances.

    First, there was Archimedes, a direct mail campaign that the party ran for several years, mailing to rented lists and bringing in $25/year donors. It had high “churn” so the numbers fell off as soon as the mailing stopped.

    Second, there was the “P transaction” scam under which anyone donated $25 or more to Browne’s campaign was treated as a dues-paying party member even though the party didn’t receive the money.

  29. George Phillies

    “His campaign started in early 2016, and being charitable LP membership was flat in 2000 and fell rapidly thereafter.” Ummh 2000, not 2016

    Excellent point that I should also have discussed 1995-1996, where the membership did indeed increase from 13658 to 21580. I read “campaign” and remembered the more recent one, but Browne, uniquely, had two campaigns, the first of which worked and the second, well, not so much.

  30. Andy

    Harry Browne brought in a lot of people who became hardcore Libertarian activists, myself included.

  31. George Phillies

    “It is not unusual at all for those who are combination advisors/supporters/consultants to bill 100s of thousands of dollars or more in fees for their work, with no expectation whatsoever of being paid, unless the candidate is extremely successful at fundraising. They are really in-kind gifts…”

    Having worked through the financials of every LP Presidential campaign since 1996, inclusive, I can assure you that it is almost totally unknown for this to happen within our party. You could make a case, on a tiny scale, that this happened in the Barr campaign, except that the largest creditor of this sort (Bovard) later sued Barr 2008 and is still owed the money. Also, much of the debt is to corporate entities that cannot turn it into in kind debts, because those would be illegal corporate campaign contributions.

  32. Andy

    Browne’s 2nd campaign was in a year where there was a very close race between Al Gore and George W. Bush, plus he had to contend with Ralph Nader and Pat Buchanan. It was a difficult set of circumstances.

  33. Robert Rich

    We old-timers, Nolan and MG tended to frown on matching funds because, among other reasons, anti-libertarian government arbitrariness can create unneeded trouble. You should (ideally) be running a low-budget campaign talking to radio shows, unions and college students and been (ideally) a past LP member in public office with a following anyway. You had to be real careful with these funds at the very least.

    The best campaign results Libertarians ever saw was when MG had the Florida LP run a (near) full slate of State House candidates on the platform they would cut spending and they refused to take any donations and ran by petition to show they meant business. Instead they went door-to-door and to community groups. 15% of Florida voted for them and things have been different since then. They were actually, as a group, outspent by one Green candidate. Dozens of LP members got appointed or elected in Florida in the aftermath. MG’s point of elbow grease before money is a good one. NH did something similar at the local level and was cooking for a while.

    I think they were right. Be careful of what you wish for with government funds. I hope Johnson can fix this.

  34. Andy

    Robert Rich said: “The best campaign results Libertarians ever saw was when MG had the Florida LP run ”

    Who is MG?

  35. Cody Quirk

    I wonder… Since Gary Johnson is starting to do well in regular presidential polls and getting much media coverage; if the establishment is now trying to push back and derail his campaign, via the FEC?

    I wouldn’t be surprised if someone, or several individuals, from high up are pulling some strings here so they could hurt Gary’s candidacy as much as possible.

  36. Cody Quirk

    Also note BAN’s commentary on the same subject-

    “…It is not uncommon for presidential candidates who receive primary season matching funds to later be found to have been overpaid. For example, in 1992, Lenora Fulani received $2,011,929.42 in primary season matching funds. In 1995 the FEC determined that she had been overpaid $612,557.32. Upon reconsideration, however, the FEC lowered the overpayment determination to $117,269.54.”

    http://ballot-access.org/2016/04/13/federal-election-commission-stands-by-its-2014-audit-decision-that-gary-johnson-2012-campaign-was-overpaid-332191-in-primary-season-matching-funds/

  37. Thomas Knapp

    Cody,

    That would be quite a long-term setup on the part of the FEC if they were conspiring to screw Johnson. They first determined that he had spent matching funds on impermissible expenses in 2014. This latest was just an affirmation of that ruling on appeal.

    And note that: This is not, as Richard Winger implies, a claim that Johnson was “overpaid.” It’s a claim that he received money and then spent it on stuff he wasn’t allowed to spend it on.

    Winger is also incorrect in his implication that this is “not uncommon.” It is fairly uncommon in general, and in particular, Johnson is the first presidential candidate to have ever been ordered to repay more than half the matching funds he received.

  38. George Whitfield

    Well, this is an unfortunate event. Let’s hope this setback is offset by other unexpected advantages going forward.

  39. Austin Cassidy

    I haven’t followed any of this closely… outside of the FEC, who does the Johnson 2012 campaign actually owe money to? Is there a list? Are any of them trying to collect or is it all, as suggested above, consultants putting down in-kind work as paper debt with no real expectation of payment?

  40. George Phillies

    Tom noted: “On the plus side for Johnson, he was technically correct: The debt is owed by his 2012 campaign committee, not by his 2016 campaign committee.”

    Tom, thank you for the transcript. It was my memory that Darryl Perry had not said that the money was owed by the 2016 campaign, and I am happy that I was right. Those of you who have not moderated a debate have no idea how much work it is to keep the operation up and running.

    Another point: Before the debate, the debate rules were set down, by me, to the candidates. They agreed. A specific rule was that there was no right of response. I suppose I could have collected their signatures, but they did agree to the rules. Johnson broke his own word, to me, that he accepted the rules. When Johnson responded to

    “Moderator: Order! There is not a free right of response. We’re going to con …
    Johnson: When there is an outright lie or an outright misrepresentation, yes …”

    he was lying through his teeth about the debate rules.

    I urge future debate moderators to be much more vigorous in saying what the rules are and enforcing them. The wonderful Florida people did not set up their electronics so that individual mikes could be cut off. Actually, Char-Lez Braden and I briefly discussed the individual mike cutoff issue, but certainly did not see a reason to need it.

  41. George Phillies

    Austin,
    Here is the most recent list of campaign debts of Gary Johnson 2012 according to the FEC filings. The effective date is 12/31/15. The money owed the Treasury is not there, and is still subject to rehearing and Judicial appeal.

    Bellatrix PC 9475 Chesapeake Drive
    Ste B
    San Diego, California 92123 12 151000.00 Monthly primary retainers, and wind down
    Broghamer Consulting, LLC 502 Monroe Street
    Newport Street, Kentucky 41071 12 3750.00 FEC Audit Consulting
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 -3878.75 Accounting Services/FEC File
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1384.05 Accounting Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1845.00 Accouting Services/FEC Reports
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1945.00 Accounting Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 14415.00 FEC Matching Funds Audit Service
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 4908.00 FEC Matching Audit Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 860.00 FEC Reporting – April 2013
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 770.00 Accounting and FEC Reporting Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 792.50 FEC Audit Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1867.50 FEC Audit Services and Filing on Oct 15
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 675.00 FEC Audit Services
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1221.25 Accounting Service – FEC Report
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1862.50 Accounting Services – FEC Reporting
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 1723.50 Accounting Service and FEC Reporting
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 390.00 Accounting Services – Prepare Form 3P
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 550.26 Finance Charge
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 937.50 FEC Audit
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 558.37 Finance charge
    Daines Goodwin and Co PC 280 East 400 West
    Ste 220
    Salt Lake City, Utah 84101 12 375.00 FEC filing and audit services
    DB Capitol Strategies 203 South Union Street
    Suite 300
    Alexandria, Virginia 22314 12 6975.00 legal services in connection with FEC Au
    DB Capitol Strategies 203 South Union Street
    Suite 300
    Alexandria, Virginia 22314 12 143025.00 Remaining cost of ongoing services agree
    EH Squared 3481 East Kentucky Ave
    Denver, Colorado 80209 12 9404.41 Fundraising services
    Hackstaff Law Group LLC 1601 Blake Street
    Denver, Colorado 80202 12 3166.00 Legal Service
    Law Office of Douglas C. Herbert 1730 Rhode Island Ave NW
    Ste 608
    Washington, DC 20036 12 16313.76 Legal Fees
    Law Office of Douglas C. Herbert 1730 Rhode Island Ave NW
    Ste 608
    Washington, DC 20036 12 10475.86 Legal Services
    Political Advisors 731 East South Temple
    Salt Lake City, Utah 84102 12 -30.00 Ad Placement- Web, Travel Costs, Shippin
    1040920SDSD12.46745
    Political Advisors 731 East South Temple
    Salt Lake City, Utah 84102 12 -0.80 Satff Hours – Mid-Level, Press Relations
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    Salt Lake City, Utah 84102 12 66172.71 Staff Hours – Mid-Level, Senior Advisors
    1040920SDSD12.46943
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    Salt Lake City, Utah 84102 12 186773.18 Staff Hours – Mid-level Mangagement, Sen
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    Salt Lake City, Utah 84102 12 5127.50 Paul Edwards Consultation – Preparation
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    Political Advisors 731 East South Temple
    Salt Lake City, Utah 84102 12 29058.75 Preparation of FEC Matching Funds reques
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    Salt Lake City, Utah 84111 12 150.00 Web hosting
    ThoughtLab 56 E. Broadway
    Suite 200
    Salt Lake City, Utah 84111 12 150.00 Web hosting
    ThoughtLab 56 E. Broadway
    Suite 200
    Salt Lake City, Utah 84111 12 4650.00 Website development and maintenance
    ThoughtLab 56 E. Broadway
    Suite 200
    Salt Lake City, Utah 84111 12 150.00 Web hosting
    ThoughtLab 56 E. Broadway
    Suite 200
    Salt Lake City, Utah 84111 12 400.00 Website development and maintenance

    Total Debts This Period = 1538118.88

  42. Austin Cassidy

    George,

    OK… that looks like a handful of his core team of consultants and lawyers. Are they actually trying to collect this debt, or is it just “paper debt” as was suggested earlier in this thread?

  43. Thomas L. Knapp

    Austin,

    The biggest debt is to his campaign manager’s company.

    The campaign line on that debt is that the manager wants to write the debt off as an in-kind contribution, but that the FEC would deem that an illegally large contribution (presumably if he and his consultants had just volunteered in the first place and never invoiced the campaign, that might have been avoided).

    The campaign submitted a “repayment plan” to the FEC that screwed all the other, smaller creditors and “paid” the campaign manager’s company with grossly over-valued licenses to use the campaign’s mailing list. The FEC rejected that plan.

    Opinions on what campaign finance law SHOULD be*, this really seems to have been amateur hour on the campaign’s part. An example — from memory, but I THINK I’m recalling accurately:

    – The campaign promised the campaign manager a $300,000 bonus if Johnson got the LP nomination (yes, really).

    – The FEC chided the campaign for not reporting that as debt on its report for the period that Johnson got the nomination. The campaign’s response was that the debt didn’t exist until the campaign was actually invoiced, which wasn’t until December of 2012; BUT

    – The campaign simultaneously tried to claim the debt that it says “didn’t exist” until seven months after the nomination (and which logically didn’t exist until the moment that Johnson became the nominee) as a pre-nomination expense on which “matching funds” could be spent.

    Admittedly it is difficult to figure out in what measure the Johnson campaign’s finances are down to incompetence versus dishonesty — but the fact that either or both factors are in play to such an extent should result in national convention delegates waving a black flag instructing the Johnson car to pull the hell off the track and get out of the competent/honest candidates’ way.

    * (I personally favor no contribution limits and disclosure being a matter of people deciding whether or not to support a candidate who doesn’t disclose — that is, the only law involved being possible fraud charges for false representations)

  44. George Phillies

    Austin Cassidy: 7 of 9 said they made standard efforts to collect the debt, say the FEC filings. I have explicit statements from at least two debtors, not on this list of 9, who found ways to obtain payment.

    One of the current debtors says in their response to the FEC (they were asked) that this was the only client on which they’d a debt settlement, implying they were not using the bloated billing approach.

  45. Stewart Flood

    Curiouser and curiouser!

    The FEC order is very damaging. The only resolution I can see that would clean up the candidate’s image would be to personally pay the FEC and the smaller creditors who were not included in the settlement plan.

    I doubt that would happen, but it would end the debate over this issue.

  46. Wes Wagner

    Stewart:

    It will not happen. Having had opportunities in 2012 to become intimately familiar with the ethics of the people who surround Johnson, I am absolutely certain they are all 1st class douche canoes.

  47. Andy

    Gary Johnson has a personal net worth of $10 million. He could pay this out of his own pocket.

    Also, why haven’t they been fundraising for the last few years to pay off these debts?

    It should be pointed out that Johnson’s campaign staff are Republican mercenaries, not Libertarians.

  48. Thomas L. Knapp

    “Gary Johnson has a personal net worth of $10 million. He could pay this out of his own pocket.”

    Even assuming that the first claim is correct, the second does not necessarily follow from it.

    Someone who owns $9.8 million worth of property, $250k worth of vehicles, has debts of $50k and not a thin dime in the bank has a “net worth of $10 million.” Liquidity matters.

  49. Thomas L. Knapp

    My recollection is that Johnson 2012 did continue fundraising after the 2012 election to defray the debt, btw. But it’s not nearly as easy to get people to contribute to post-campaign debt as it is to get them to contribute to current campaign activity, real or hypothetical.

  50. Andy

    The $10 million figure from Johnson is from his financial disclosure statement from the last time he ran.

    Yeah, I realize it may not all be in cash, but a guy who is worth that much should have enough cash sitting around to cover this, and even if he does not, he could sell stocks or cars or other things that he has to come up with the money. This was his campaign, so he should be responsible for the debts. If he cannot raise the money (which they barely tried to do), then he should start reaching into his own pocket.

    Why did he wait so long to announce he was running again? Couldn’t he have announced earlier and therefore raised money earlier?

  51. Thomas L. Knapp

    Andy,

    Just to be clear here, I’m not trying to DEFEND Johnson. I was just making a very discrete point — that net worth doesn’t tell us anything about cash liquidity. For all I know, $9.8 million of his $10 million net worth is in stock in his cannabis company that he’s forbidden to sell before some given date, or stock options that he’s forbidden to exercise before some given date, etc. as part of his agreement with the company. Or maybe he COULD pay it but just doesn’t want to.

    The problem with declaring earlier and raising money with his current campaign to pay off debt on the previous campaign is that if he kept the same committee he WOULD be “in the hole” by that $1.5 million. As it is, and as I point out, he’s technically correct that his CURRENT campaign is not legally responsible for that debt (at least as I understand it).

    But in my opinion, HE is responsible for that debt — if not legally, at least ethically and in terms of evaluating his fitness as a candidate. He tried to cover that real responsibility up with his technically correct claim — which, in typical Johnson style, he managed to deliver in barely coherent, somewhat crazed, fashion.

    He raised and spent $2.x million, $600k+ of it in the form of taxpayer-provided welfare checks. Then he spent another $1.5 million on credit and hasn’t paid it back.

    Who can tell the public with a straight face, that he — or the party which nominates him again — is “fiscally responsible?”

    And who can tell the public with a straight face that a guy who comes completely unhinged live onstage when his finances are questioned has the temperament to be taken seriously as a candidate?

  52. Andy

    “Thomas L. Knapp
    April 14, 2016 at 11:38
    Andy,

    Just to be clear here, I’m not trying to DEFEND Johnson. I was just making a very discrete point — that net worth doesn’t tell us anything about cash liquidity. For all I know, $9.8 million of his $10 million net worth is in stock in his cannabis company that he’s forbidden to sell before some given date, or stock options that he’s forbidden to exercise before some given date, etc. as part of his agreement with the company. Or maybe he COULD pay it but just doesn’t want to.”

    Tom, I looked over Johnson’s personal financial disclosure statement from when he ran last time, and unless his personal finances have been radically altered since then for the worse, he is more than capable of paying off these debts out of his own pocket.

    Sure, it would suck for Johnson to have to reach into his own pocket for this, but it would not be an issue if he had run a “tighter ship” in his 2012 campaign and not run up these debts in the first place.

    I thought that Libertarians were supposed to be all about fiscal responsibility, as in paying one’s debts.

    I’ve seen campaigns that have done fundraising activities to pay off campaign debts. Why didn’t they say something like, “Thanks for supporting Gary Johnson 2012. We really broke new ground for the Libertarian Party, thanks to supporters like yourself. Now we need your help to retire our campaign debt. Governor Johnson will be doing _____________________________ (fill in the blank), which will continue to advance the cause of liberty, and lay the groundwork for 2016, but before we can move on with future projects, we must pay off our campaign debts, so please make a donation today so Governor Johnson can continue to spread our message of restoring fiscal sanity and civil liberties.”

    They could come up with gimmicks, like if you donate a certain amount of money to retire the campaign debt you get a book personally autographed by Governor Johnson. If a certain amount of money is donated from a particular state, Governor Johnson will personally come to your state for a diner and speaking engagement. If you donate a certain amount of money, Governor Johnson will appear in a commercial (even if it is just a YouTube video) to promote your campaign, or your Libertarian Party affiliate. Etc…

    “Who can tell the public with a straight face, that he — or the party which nominates him again — is ‘fiscally responsible?’

    And who can tell the public with a straight face that a guy who comes completely unhinged live onstage when his finances are questioned has the temperament to be taken seriously as a candidate?”

    I agree. It makes the Libertarian Party look like hypocrites for criticizing the spending and debt practices of the US government if we nominate a candidate to represent us who engages in similar spending and debt practices.

  53. George Phillies

    To disagree slightly, Tom, the style was not like four years ago, and I am asked about the heatedness of the response, in Florida, in Texas, and in California. There seems to be a new issue.

    In the extremely hypothetical case that Johnson is in a debate with candidates of other parties, there will be much more hostile questioning and remarks. He will be under way more stress. If he cannot control his temper under stress, which he clearly cannot, he has no business in those debates. He will make a fool of the party, not to mention convincing Americans that he is an unacceptable Presidential candidate because his finger should not be anywhere near the nuclear trigger.

  54. Stewart Flood

    From what I saw, it was clear that he was upset. But saying he was “completely unhinged” is stretching it a bit.

    That said, I agree that staying in control is important in a debate. Petersen and Perry have both figured out how to push the right buttons in debates to get him to react. From where I was watching (online) it appeared that the moderator and Perry set it up. I’m not saying that was necessarily the case, but it did look like it.

  55. Steven Berson

    For me the issue with GJ 2012 debt is lack of transparency and seemingly not optimal allocation of funds towards “best bang for buck” action. As such – since he is once again using Ron Neilsen and NSON for his campaign management – unlike 2012 when I donated regularly to his campaign – I have refrained from donating anything to his campaign and have instead given towards the LP and TX LP (as well as my $5 to the Marc Feldman campaign). I have a feeling I might not be the only one who has changed in this regard since 2012.

  56. NewFederalist

    I won’t contribute to the Johnson campaign because I don’t know how the money will be used. If he is the nominee I may vote for him but I will contribute to Darrell Castle and/or Jill Stein.

  57. Andy

    Why is a Libertarian Party candidate hiring Republican mercenaries to run his campaign? Shouldn’t these jobs go to actual Libertarians?

  58. Thomas L. Knapp Post author

    “Why is a Libertarian Party candidate hiring Republican mercenaries to run his campaign? Shouldn’t these jobs go to actual Libertarians?”

    That depends on several things. Things like what the job is, whether or not the job has an ideological component at all, and who is most qualified for the job. If I’m hiring a brain surgeon, I’m going to look for the best brain surgeon, not the nearest libertarian who once read a magazine article about brain surgery.

    All that said, yes, Johnson’s campaign organization seems to have been a bad fit for a Libertarian presidential campaigns. There’s one good excuse for that, and several reasons why it was a bad idea.

    The good excuse is that his campaign started in the Republican Party, and he just continued with, for the most part, the same company/personnel when he switched parties in mid-campaign. Understandable. But:

    – The company in question, NSON, had a history of working with conservatives like Orrin Hatch and freakazoids like Christine “I Am Not A Witch” O’Donnell. Presumably NSON is well-versed in selling Republicans. Selling Libertarians, probably not so much.

    – Being a Republican firm, NSON was presumably used to working in an environment where its clients spend an average of $1.7 million to win in a single congressional district or $10.4 million to win a statewide US Senate election. That doesn’t port very well to raising and spending $2 million for a nation-wide presidential campaign.

    If I’m calculating correctly (money received and spent plus money spent as debt), Johnson paid $3.07 per vote in 2012.

    Michael Badnarik paid $2.51 per vote in 2004.

    Given Johnson’s name recognition, two terms as governor, face time in the GOP race, and an election not perceived as nearly as tight, one would have expected him to turn a lot lower cost per vote than a complete political unknown running his first substantial campaign for office. I would put that difference in cost per vote down to bad spending habits and using NSON to run a Libertarian presidential campaign.

  59. Thomas L. Knapp Post author

    Correction to the previous post: “Raising and spending $2 million for a nationwide presidential campaign” should be “raising and spending $2 million and borrowing and spending $1.5 million for a nationwide presidential campaign.”

  60. Austin Cassidy

    OK, that explains a good bit. So, is all of this really rooted in the matching funds?

    You mention a $300k victory bonus for winning the LP nomination. That sounds like a sloppy way to tie money to the primary campaign, even though everyone basically understands that the nomination wasn’t really all that in doubt and didn’t require a great outlay of cash.

    Essentially, did the Johnson campaign create a bunch of fake “primary season” expenses? Maybe also some additional paper debts that could be satisfied in case the campaign suddenly raised $5 million in October of 2012? And then when no big fundraising surge came, and the FEC started to question if the matching money was really used to win the primary, the committee was caught with a bunch of phantom debt to “friends and family” on their books?

    Like, no one is charging that there’s a sign shop in Santa Fe that’s trying to hunt down $15,000… or some attorney or credit card company is beating down their doors. This is basically a game of manipulating the FEC for matching funds?

  61. Andy

    “Thomas L. Knapp Post author
    April 14, 2016 at 16:00
    ‘Why is a Libertarian Party candidate hiring Republican mercenaries to run his campaign? Shouldn’t these jobs go to actual Libertarians?’

    That depends on several things. Things like what the job is, whether or not the job has an ideological component at all, and who is most qualified for the job. If I’m hiring a brain surgeon, I’m going to look for the best brain surgeon, not the nearest libertarian who once read a magazine article about brain surgery.”

    Tom, hiring a brain surgeon, or an auto mechanic or a plumber has little or nothing to do with politics, and I would not put this in the same category as hiring campaign staffers. The people who work in all facets of your campaign is highly relevant due to the ideological nature of politics.

    Now one could say, “What if I hire somebody to make political signs? Should this person be a Libertarian?” Ideally, I would say yes, but if you can’t find a Libertarian sign maker, I suppose if you decided the sign yourself, or worked with the designer and told them exactly what you wanted the sign to look like, it would not make a huge deal if the sign maker printed the signs to your specifications.

    When it comes to the people who are managing your campaign’s money, or who would have any dealing with the public, or with your campaign’s messaging, these people ought to all be actual Libertarians.

    Who is more likely to waste campaign funds? A) A person who is an actual Libertarian who wants to see your campaign be as successful as possible so you can advance the cause of liberty, or B) A non-libertarian mercenary who sees your campaign as his or her latest meal ticket.

    Who is more likely to want to get a Libertarian message out to the public and to build the Libertarian Party and movement? A) A person who is an actual Libertarian activist, or B) A non-libertarian mercenary who sees your campaign as his or her latest meal ticket.

    I’ve spent a lot of time working on a lot of campaigns with people who are non-libertarian mercenaries, so I know how they operate. Their modus operandi has nothing to do with advancing the cause of liberty, as their sole motivation is to bilk every campaign they work on for as much money as possible. I have seen quality sacrificed in the name of profiteering with non-libertarians mercenaries on many occasions.

    So why would anyone who professes to be a Libertarian want people who are not libertarians working on their campaign? I could see if you could not find anyone else, but when I don’t see a campaign even trying to find Libertarians to do this work, it makes me question how that campaign is being run.

    You brought up the fact that Johnson’s campaign started in the Republican Party, and that he carried it over to the Libertarian Party. This is true, but even so, Johnson was SUPPOSED to be a libertarian Republican, not a mainstream Republican. Most of the people who worked on Ron Paul’s campaigns were libertarians. I think that one of the problems with Rand Paul’s campaign was that he hired too many mainstream Republicans, and not enough libertarians.

    Johnson has been in the LP (or back in the LP since he was a member for a year or two or so back in the early 1990’s and/or 1980’s) for over 4 years now. Shouldn’t he have transitioned to a more Libertarian campaign staff by now?

    Another thing to consider is that part of the reason for Libertarians to run for office is to build the party and the movement (this is the main reason to run for any office where you stand little to no chance of winning). Part of building the party and the movement is by training actual Libertarians on who to run a political campaign.

    If your campaign is being run by and staffed with mercenaries, or by Republican mercenaries, then how does this provide training for Libertarians in how to run a campaign? Wouldn’t it be better to have actual Libertarians doing this work, so that after the campaign is over, they can take the skills and experience they obtained while working on the campaign to future Libertarian Party campaigns?

    Libertarians writing a check to a campaign who spends it on hiring non-libertarian mercenaries means that no Libertarians gain any work experience from the money that Libertarians donated, so therefore Libertarians learn nothing about how to run a campaign. This reminds me of a kid in school who has other people do his or her homework for them. That kid really does not learn as much as they would if they did their own homework.

    Sending all of the money to non-libertarian mercenaries also means that you are rewarding the wrong kind of people. The message being sent out is not only is it OK to be a non-libertarian mercenary, but also that Libertarians should financially reward you for your lack of libertarian principles, and that actual Libertarian activist should not be rewarded. If you spend money hiring Libertarians, at least some of that money will come back to the movement in the form of donations, increased activism, or attendance at conventions or other libertarian events, whereas spending money on non-libertarian mercenaries means that the money is just sucked right out of the movement, as none of it is going to go towards anything that is libertarian.

    “– The company in question, NSON, had a history of working with conservatives like Orrin Hatch and freakazoids like Christine ‘I Am Not A Witch’ O’Donnell. Presumably NSON is well-versed in selling Republicans. Selling Libertarians, probably not so much.”

    My point exactly.

    “Given Johnson’s name recognition, two terms as governor, face time in the GOP race, and an election not perceived as nearly as tight, one would have expected him to turn a lot lower cost per vote than a complete political unknown running his first substantial campaign for office. I would put that difference in cost per vote down to bad spending habits and using NSON to run a Libertarian presidential campaign.”

    It should also be pointed out that Johnson ran in what was the easiest set of circumstances for any Libertarian Party candidate for President in a long time, or probably ever. The election between Obama and Romney was not considered to be as close as some past elections between Democrats and Republicans. There was no minor party or independent candidate that was as well known, or on as many ballots, as Johnson. Recognition of the word libertarian was at an all time high (mostly because of Ron Paul). More people were on the internet than ever, which means that more people were able to find out about Johnson’s campaign without having to rely on the mainstream media.

    Johnson did relatively well (by minor party and independent standards) in the election, getting over 1.2 million votes, which came out to like .99 percent of the vote (he still came behind Ed Clark’s 1.1% of the vote in 1980, which was under more difficult circumstances), but one has got to wonder how much better the Johnson campaign could have done if it had been run more effectively.

  62. Andy

    “I suppose if you decided the sign yourself”

    Should read, “I suppose if you designed the sign yourself…”

  63. Rhonda Nighman

    Did anyone take into consideration that the campaign had to continually fight & spend money(I.e.lawsuits) to get & stay on the ballot in several states ? There were many legal filings by the Republican Party to kick him of the ballot in several states in 2012,challenging petition signatures & such.

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