Which Texas candidate raised the most money?

Lists of top donors and candidates in a given race or election cycle are among the most popularly-viewed articles in campaign finance, including on Transparency USA. At a glance, our readers can see the top candidates, PACs and donors ranked by total fundraising in any selected election cycle. And it’s not surprising. Fundraising is one of the primary metrics used in campaign finance for drawing for comparisons between candidates in a race. Plus, call it human nature, but people always seem to want to know who is writing huge checks and who is receiving them.

But while donations are a useful way to compare and contrast prominent figures in Texas politics, this category leaves out another large source of potential capital: loans.

Almost $7 million in loans not included in Texas donation totals

In the 2022 election cycle so far, state-level campaigns in Texas have been loaned a total of $6,997,330.31. Notably, $5 million of those loans belong to the campaign account of Don Huffines, who is running for Texas governor in 2022.

Candidates and officeholders, through their official candidate political action committees (PACs), are required to report donations and loans separately to the Texas Ethics Commission, even though both sources of income impact the account’s cash-on-hand in the same way. And while the distinction between money that is given and money that is loaned may seem intuitive for record-keeping purposes, some readers are surprised — or even feel misled — when they discover that loans are not included in total donation counts. The 2020 special runoff election between Drew Springer and Shelley Luther highlighted this lender/donor dissonance last cycle. More confusingly, campaign finance reporting rules are different in every state. For instance, while loans are displayed separately in Texas, this is not always the case.

Why loans can be a strategic way to support candidates

For the political supporter looking to make a large investment in a campaign — especially when backing a challenger to a powerful incumbent with plenty of available capital — loans can be particularly attractive. For the candidate, the potential downsides of a loan structure (namely, repayment with interest) are less of a risk than it might appear from the outside. Here are some of the reasons why:

1. Loans to candidates can be paid back with campaign account funds.

A candidate can use future campaign funds to pay off loans to the campaign. A winning candidate can expect to receive donations as a show of support throughout their time as an officeholder. These typically come from individuals, PACs, and lobbyists who are more likely to give to an elected officeholder than an unproven candidate. Money from that burgeoning campaign account can be used to turn around and pay off any loans.

This is the best-case scenario for lenders. They help their candidate get successfully elected, and get all their money back once that candidate is in Austin.

2. Loans can be forgiven.

A lender can choose to forgive a loan at a later time. For some supporters, a loan structure is worth it for a shot at that repayment opportunity if the candidate wins. But the empty coffers of a losing candidate at the end of the campaign trail are unlikely to be flooded with any “show of support” money that can be used to repay loans.

In this scenario the loan can be forgiven, essentially turning it into an ad-hoc donation. If a loan is forgiven, it must then be reported as an in-kind contribution. Lenders don’t have to forgive loans, of course. That’s the risk taken by the candidate accepting a loan. But in practice, campaign loans from individuals can be given with a certain understanding of what the expectations are if they win or lose the election.

3. Loans are less visible.

Some supporters prefer loans over donations precisely because lender information is not as accessible to the public as donor information. A candidate is unlikely to receive small loans in the same volume that they receive small dollar donations. Usually, lenders are offering a significant influx of cash. And not every supporter wants to be a chart-topping donor with their profile raised during elections.

Loans are still public record, and their support is certainly not a secret. But because loans don’t show up in donation totals, lending activity won’t land them on the top of any Texas donor list. For someone who is interested in contributing to a race in a significant way, while keeping their public profile lower, loans are an appealing option.

4. Loans are sometimes just a label.

There are other nuances to loan reports, and they don’t necessarily imply a camera-shy supporter. Many candidates fund their own campaigns this way. The TEC requires personal funds deposited to a candidate’s own campaign account to be reported as loans.

Some loans count as contributions (like a loan from an individual) while others do not (like a loan from an established financial institution). This is why, for clarity and to avoid potential double entries, we display “donations” and “loans” instead of “contributions” and “loans.” For more, see reporting requirements from the TEC.

Where to find loan data on Transparency USA

Readers looking for a more complete picture of a candidate’s campaign finance position can find all of the relevant data on Transparency USA. We’ll use Don Huffines, the Texas gubernatorial candidate who single handedly accounts for the majority of the loans reported in 2021, as an example.

In Texas, cash-on-hand is featured prominently alongside donations and expenditures at the top of any candidate page, and offers the best snapshot of the most recently-reported resources in an account.

Readers also have access to loan data for any Texas candidate on Transparency USA. While those numbers are not included as part of the total donations displayed in blue, they can be found on every profile under the “loans” tab.

Loans are also prominently displayed in our Election Races feature, making it easy to compare candidates in any specific race. You can access this feature directly from our Texas home page, or by selecting the relevant election on the candidate’s current state profile.

Want more about TEC reporting requirements, campaign finance terminology, and how we display information on Transparency USA? Start with any of these resources:

How To Start

Campaign Finance Terms

Texas Data Explanation

TUSA Video Tutorials