by Ethan DeWitt, New Hampshire Bulletin
November 1, 2024

In her quest for the New Hampshire governor’s office, Kelly Ayotte is breaking financial records. As of Oct. 30, the Republican nominee and former U.S. senator has raised $21 million into her personal campaign fund since running for the office and spent nearly $19 million of it. 

The amount far surpasses the funds raised by Ayotte’s Democratic opponent, former Manchester Mayor Joyce Craig, who brought in $7.3 million into her campaign fund as of that same deadline. And it dwarfs the $1.7 million raised by Gov. Chris Sununu during his entire 2022 re-election effort. 

But the money is unusual for other reasons: A majority of it – 70 percent – comes from a single political action committee. And none of those transactions can be traced to individual donors.

The strategy is the direct result of a 2023 campaign finance law that removes limits on donations to candidates from political action committees. And after recent validation from the Attorney General’s Office, the Ayotte campaign’s application of the law could become common practice in future elections. 

In an Oct. 10 opinion, the office’s Election Law Unit wrote that Ayotte’s practice of accepting millions of dollars from a political action committee supplied by the Republican Governor’s Association is legal, rebuffing a complaint by Democrats. 

Since then, Democrats have followed the RGA’s lead and embraced the technique on their own, pouring larger sums of money to Craig. In addition to the $7.3 million controlled by the Craig campaign, the Democratic Governors Association has also poured nearly $9 million into another political committee, Put New Hampshire First, which has largely paid for attack ads against Ayotte.

The little-noticed law – added to last year’s state budget – allows New Hampshire candidates to accept an unlimited number of contributions from “political advocacy organizations,” without those organizations needing to disclose their donors. 

The maneuver has another benefit: Candidates can use that money to buy cheaper ads. Federal law requires that television stations give political candidates a cheaper rate to buy ads than political organizations in the 60 days ahead of an election. That incentivizes PACs to transfer funds directly to candidates in the final stretch. 

Campaign finance reform advocates have objected to the state law, arguing the removal of the limits has diminished transparency and accountability for candidates. But the new tool has proven attractive for some campaigns this year.

The state’s online campaign finance system shows that the Republican Governors Association contributed a total of $21.3 million to a political action committee named the Live Free PAC this campaign cycle. That “political advocacy organization” has sent much of that money – $14.7 million – on to the Ayotte campaign, and $6 million to the New Hampshire Republican State Committee.

Democrats challenged that set-up, arguing the Live Free PAC had wrongfully registered as a “political advocacy organization,” which allows it to accept unlimited donations from the RGA. The New Hampshire Democratic Party said it should have registered as a “political committee,” which would cap the number of donations it could receive from the RGA to $30,000 for the entire election season.

But the Attorney General’s Office response this month asserts that the Live Free PAC is a validly registered political advocacy organization, and is thus able to raise unlimited amounts and transfer unlimited amounts to candidates.

‘Political committee’ vs. ‘political advocacy organization’

The 2023 law allows unlimited donations to candidates in many – but not all – cases. 

Individual donors and corporations are still capped at donating $15,000 in total to a candidate, per the law, RSA 664:4. Wealthier individuals often skirt this cap by registering multiple limited liability corporations and donating the $15,000 maximum from each corporation.

And individuals and businesses are still prevented from donating more than $30,000 in one election cycle to a “political committee” or “political party.”

But individuals are not capped in how much they may donate to a “political advocacy organization.” And after the 2023 change, a political advocacy organization can now pass on an unlimited amount of funds directly to a candidate. 

That change means individuals or large party organizations like the RGA and DGA can pass major donations on to candidates – as long as they send those donations through a political advocacy organization.

And it raises a legal question: What is the difference between a political committee, which is capped, and a political advocacy organization, which is not? 

The statute is less than clear. A political committee is defined as any organization that “promotes the success or defeat of a candidate or candidates or measure or measures.” And a political advocacy organization is any organization that spends at least $2,500 for communication that is “functionally equivalent” to advocacy for a candidate or measure, even if that is not the organization’s primary role.

In Ayotte’s case, Live Free PAC has registered as a political advocacy organization in the 2018, 2020, 2022, and 2024 election cycles, campaign finance records show. And after the passage of the 2023 law, the PAC has taken advantage of the new unlimited powers, transferring large amounts to the Ayotte campaign, usually in tranches of $1.5 million at a time. All of Live Free PAC’s money comes from the RGA.

The fundraising strategies are a major difference between the two gubernatorial campaigns. Craig has raised $4.4 million from individual donors, or 65 percent of her funds overall. Ayotte has raised $3.7 million from individual donors, but that comprises just 18 percent of her total haul. The other $17 million comes from the $14.7 million in Live Free PAC transfers and money transfers from other organizations and PACs.

If you can’t beat ‘em …

In its Sept. 18 complaint to the Attorney General’s Office, the New Hampshire Democratic Party alleged that the Live Free PAC had wrongly registered as a political advocacy organization, when it really met the definition of a political committee. 

But Richard Lehmann, an attorney representing the Live Free PAC, disputed that argument. In an Oct. 8 letter to the Attorney General’s Office, Lehmann wrote that Live Free PAC met the definitions of a political advocacy organization, or PAO, and argued that neither the Legislature nor the Attorney General’s Office had issued guidelines that would prevent that registration. 

“If the Legislature intended to restrict the ability of organizations to register and conduct themselves as PAOs, it would have imposed additional conditions or restricted the ability of organizations to qualify,” Lehmann wrote. “It did not do that.”

Assistant Attorney General Brendan O’Donnell, chief of the Election Law Unit, sided with the PAC, writing in response to the NHDP that the PAC “registered as a PAO and met the statutory definition of a PAO.” O’Donnell added that just because Live Free PAC also met the statutory definitions of a political committee did not mean it needed to follow those contribution limits, since it didn’t register as one.

Following the advisory opinion, the Democrats changed tack. After months of running a political committee titled “Democratic Governors Association – New Hampshire” and adhering to the $30,000 limits on individual receipts, the Democratic Governors Association registered its own political advocacy organization on Oct. 11, a day after the Attorney General’s Office opinion, campaign records show. 

That entity, named “DGA New Hampshire PAO,” has accepted a number of funds, including a $3.2 million transfer from the Democratic Governors Association, and has transferred $800,000 to the Craig campaign and $3.1 million to the New Hampshire Democratic Party, as of the latest filings.

Blessing or a curse?

When the 2023 law passed, some welcomed it, arguing that New Hampshire has always had loopholes allowing large transfers of wealth to candidates. The new law, they argued, simply eased the process for major campaigns. 

“I believe that money is speech, and so I’m opposed to placing limits on that,” said Rep. Joe Sweeney, an original sponsor of the legislation, in an interview last year. 

Others, like Olivia Zink, were appalled. Zink, executive director of Open Democracy, an advocacy group that pushes to reduce money in political campaigns, says she worried last year that the law would bring in vast and unaccountable sums of money to the state.

This year, Zink feels she was proven right. And she argues lawmakers should return donation limits to campaigns. 

“I think candidates need to answer who they’re getting their campaign cash from,” she said. “Voters are being flooded with ads, and if they’re being paid for by nondisclosed, out-of-state donors, is that how they’re going to run our state?”

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