Will Thompson Tip His Hand?

Will Thompson Tip His Hand?

He's raising money and he's on the campaign trail, but Fred Thompson's decision to retain his status as a non-candidate is creating a series of interesting disclosure issues. (Reuters).

The argument is on about whether former Tennessee Sen. Fred Thompson's early fundraising was a solid showing for an undeclared candidate for the presidency or a disappointing performance from someone projected as a top-tier contender. But today, another question looms over the non-candidate: Could it be the last disclosure we see from Thompson until votes have already been cast in critical contests next year?

In a filing to the Internal Revenue Service, Thompson revealed that he had raised $3.4 million during June for his anticipated campaign for the GOP presidential nomination, relying heavily on donors from his home state of Tennessee (As an undeclared contender, Thompson is not yet subject to Federal Election Commission scrutiny of his fundraising and spending). Now, Thompson's decision to remain officially on the sidelines until at least September has kindled speculation that he could march through the Iowa caucuses and primaries in New Hampshire, South Carolina and Florida without identifying any more of his donors.

Campaign finance experts said yesterday that if Thompson were to wait until Sept. 6 to launch a campaign, he would be legally permitted to delay filing a finance report with the Federal Election Commission until Jan. 31.

"Thompson seems to have found a way to skirt the requirement to disclose whose funding his campaign," said Ellen Miller, executive director of the non-partisan Sunlight Foundation. "It would be hugely disturbing to think he could become a competitive candidate without ever having to disclose the source of his money."

When asked about that potential, Thompson campaign officials stressed his commitment to disclosure. A source close to the campaign acknowledged that Thompson advisers are aware that such a delay might be legal, but said the former senator has no intention of exploiting it.

Thompson's posture -- that he is still "testing the waters" to determine if he should seek the White House -- has not only left him free from the campaign finance disclosure rules faced by declared candidates. He is also able to avoid filing a personal financial disclosure form detailing his personal holdings and assets. Because he has not officially in the race, he can stay out of the crush of debates scattered across the calendar. And as a non-candidate he has not yet run afoul of Federal Communications Commission rules that might prevent him from continuing to collect the income he earns from rebroadcasts of "Law & Order" episiodes in which he appeared.

But every day he remains outside the field of declared candidates, he further tests the limits of FEC rules about what constitutes a candidacy. While some campaigns have grumbled about this for weeks, more legal questions about his non-candidacy surfaced with the release of his June donor list to the IRS yesterday.

The disclosure, for example, included $72,000 in contributions designated for use in the general election. FEC rules say that when candidates "test the waters" they cannot raise more money than they could reasonably be expected to be used for exploratory activities or amass funds intended to be used once they are a candidate.

"General election money is clearly money that would be spent after you become a candidate," said Larry Noble, a former FEC general counsel who is now in general practice. "I think that's problematic. Clearly it's a red flag."

Thompson's camp was also touting it's low "burn rate" yesterday, telling reporters in a press release that the Tennessean has maintained a frugal operation, spending only 18 percent of the funds he has raised. Again, Noble said, it's an unusual message given that FEC regulations prohibit marshaling resources for an eventual campaign.

Linda Rozett, a campaign spokeswoman, said the campaign has not sought general election funds, and some donors simply chose to make those contributions. The purpose of the exploratory effort, she said, is to "assess political support and financial support for a candidacy. If those who give, chose to give above the limit, we follow the rules and hold it aside."

"The testing the waters committee is conducting itself in a completely straightforward manner," Rozett said. "Sen. Thompson and the committee are following all the rules and regulations governing their activities."

-- Matthew Mosk