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Georgia runoff races will be: 'An enormous money bomb': Open Secrets Executive Director

Sheila Krumholz, Center for Responsive Politics Executive Director, joins Yahoo Finance's Kristin Myers to break down the latest figure's on the fundrasing push for Georgia's Senate runoff races, and Trump's legal battle in the 2020 election.

Video Transcript

KRISTIN MYERS: I want to bring on our next guest to continue talking about Trump's legal battles and the costs that's going to be associated with that. So we're joined now by Sheila Krumholz. She's the Center for Responsive Politics Executive Director. Sheila, you know, I've been getting a lot of texts from the Trump campaign asking for money as a part of their Defense Fund. I know that we have some of those texts, if we can show everyone at home what they look like. I'm wondering, this campaigning for a legal battle, essentially, is this something new or is it uncommon for campaigns to have these legal accounts or to finance, really, as a part of their campaign, recount, or its recounts, or contesting election results?

SHEILA KRUMHOLZ: Very common, or rather, not very common, but historically there have been many legal recounts. And from our perspective, what's most important is that we have access to the information about who's funding these recounts and runoffs, in this case. And we're expecting, given the intensity of the fight for the Senate, that this will be a blowout. There will be four runoffs record amount raised.

KRISTIN MYERS: Now I know that the Center for Responsive Politics, you guys have a website called OpenSecrets. OpenSecrets has been looking into this. And of course, we just heard from Jeff Smith that Biden's camp is also going to be, you know, also wading into a legal battle. Is one side better funded than the other when it comes to these legal accounts or these legal issues? Is it Democrats or is it Republicans?

SHEILA KRUMHOLZ: I'm not sure historically which side kind of tips the scales. I would say in this election cycle, of course, we saw the Biden camp better funded, and specifically ActBlue performing much better than when read in terms of raising massive numbers of small donations. ActBlue had a longer track record. They've been at it a while longer. So I would expect that we would see massive sums raised by donors, both large and small, and perhaps continued greater success for the Democrats through ActBlue.

KRISTIN MYERS: And to that point, both campaigns are also able to tap into funds and money from the National Committees, correct? So it's not just their own campaign's coffers that they're going to have to rely on for all of these lawsuits. For example, Donald Trump's campaign will also be able to turn to the Republican National Committee, which, of course, has hundreds of millions of dollars to also help in these battles.

SHEILA KRUMHOLZ: Correct. So the RNC is trying to raise at least $60 million, maybe more like $100 million. Can raise jointly with Trump through his joint fundraising committees. And his campaign has announced, or rather advertised in the fine print, that part of that money will go to pay down debts for the campaign, which is not great transparency to have that in the fine print, but regardless, they will be coordinating on that fundraising.

KRISTIN MYERS: So to that point, that $60 million. That was reported originally by Reuters that the Trump campaign is going to try to raise for those legal expenses. I saw that OpenSecrets had done a nice breakdown that the Trump campaign had spent over $20 million on legal expenses. And that's compared to president-elect Biden who only spent roughly $2 million, as you guys were finding it. I'm wondering then how stunning is it to hear that the Trump campaign trying to raise an additional $60, you mentioned a number as high as $100 million, to challenge these election results. That seems like a lot of money.

SHEILA KRUMHOLZ: It is a lot of money, but Trump has a massive email and text list, and a fervent, passionate base to tap, and they've been bombarding their list with messages for funding for the legal defense. So he will rely heavily on this list undoubtedly. I should add. He's also launching a leadership PAC called Save America that is yet another way to raise money. So for donors who maxed out to the campaign, maxed out to the RNC, here is yet another pocket of his coat that they can fill.

KRISTIN MYERS: Is that at all-- I mean, that almost seems a little bit unethical. Is that unusual for campaigns to kind of come up with extra-- almost create extra revenue streams to tap different donors so that they can add more money to their campaigns once they've run out of all the legal options that they can fund raise in?

SHEILA KRUMHOLZ: Well, it's perfectly legal, of course, for him to create a leadership PAC. It's unusual to do it at this stage of a campaign, and clearly it's because they're trying to go back to a base that has already-- many of whom have already maxed out to the campaign and the RNC. So they want to again, yeah, have another kind of fund through which they can raise money.

He can then use that money-- he cannot transfer it all to his campaign, but he can use the money for travel. He has a lot of flexibility in how he can use it. He can use it to stay at his own resorts, et cetera. So there are fewer restrictions on PACs because they're supposed to be independent of the campaign, but here it is really an extension of the campaign.

KRISTIN MYERS: Now I know that the Center for Responsive Politics found that this $60 million, of course, would be much, much more than the last previous record of money spent on legal services, which was $8 million back in 2004 with George Bush. And of course, we all remember George Bush having to fight his own election contested lawsuit back in 2000 with Al Gore versus George Bush. So it seems that the 60 million much, much more than some of those legal battles that we saw 20 years ago over that presidential election. Does that at all indicate in your mind just how long or how protracted this battle might be if this money is so much greater than the money we've seen raised in previous years to essentially contest elections or ask for recounts?

SHEILA KRUMHOLZ: Well, the challenge is to-- ostensibly illegalities had been projected for some time. So I think there has been planning that has gone into this. It may well be protracted. I think what occurred in 2000 caught everyone flatfooted, and so there was this rush to gather funds for the recount effort.

So here, I think, we're already seeing numerous legal challenges being made. And so, yes, they're probably anticipating that this will be a much larger, broader fight. Again, I should reference that some of this money is being raised to pay down the debt. That isn't being advertised quite as loudly, but it is kind of that twofold purpose. So it is different in that sense.

KRISTIN MYERS: Probably got a minute left with you here, Sheila, and I want to ask you now about the Georgia Senate races. Of course, incredibly important to both Democrats and Republicans, especially if Democrats can grab those two seats, they're going to be able to grab power of the Senate. That is, of course, if Vice President Elect Kamala Harris remains the Vice President-elect after all of these lawsuits. Are you-- as you're looking at this, could this become the most expensive Senate race in history given how important they are to both parties and how much money everyone is seeing at home has already been raised for those races?

SHEILA KRUMHOLZ: We are anticipating that this will be just an enormous money bomb for both races. It's hard to say whether this will break the record, but there-- it's different too because again, the balance of the Senate hangs in the balance. And also that these two runoff races are being held at once, and they're coordinating-- the Loeffler and Perdue have created a joint fundraising committee called Senate Georgia Battleground. Outside groups will be coordinating, mentioning both candidates perhaps.

And there is undoubtedly going to be some exhaustion on the part of donors, but also kind of continuing the fight for the kind of the-- to see the results out for the 2020 election. So I expect that the money will be huge. It'll be drawing in all kinds of players, maybe Hollywood, certainly Get Out The Vote efforts, and registration for young voters who hadn't turned 18 by the General, but will be able to vote by the time of this runoff.