January yields debt for HRC, cash for Obama
By: Kenneth P. Vogel and Jeanne Cummings
February 20, 2008 11:05 PM EST
Hillary Clinton ended January with $7.6 million in debt – not including the $5 million personal loan she gave to her campaign in the run-up to the critical Super Tuesday elections, according to financial reports released Wednesday.
In contrast, Democratic rival Barack Obama’s campaign’s finances continued to be robust.
He reported raising nearly $37 million and spending nearly $31 million. His cash balance was $25 million, of which roughly $20 million can be spent on the primary. He reported a comparatively small $1 million in debts, owed largely to just three vendors.
The January monthly financial disclosure reports glimpse a behind-the-scenes imbalance that has had a significant impact on the primary contest — one that continues in the days leading up to the critical March 4 primaries in Texas and Ohio.
As the Clinton campaign scrambles for cash, Obama appears on track to raise more than $30 million again in February.
Phil Singer, a Clinton spokesman, downplayed the disparity. “Thanks to an enormous outpouring of support, we will raise more money this month than in any other so far. We have all the resources we need to compete and win,” he said.
But the Clinton report paints a picture of a one-time front-runner under enormous pressure after miscalculating that she would wrap up the nomination before or on Feb. 5.
According to the reports, Clinton raised about $20 million in January, including her loan. She spent nearly $29 million during the month.
She reported a cash balance of $29 million. But more than $20 million of that is money dedicated to the general election. Her personal loan accounts for more than half of the remaining approximately $9 million, leaving just about $4 million in cash raised from donors.
But even that money is illusionary when measured against the reported $7.6 million in debts.
More than $2 million of the red ink is owed to chief consultant and adviser, Mark Penn. But the lengthy laundry list of IOUs also includes unpaid bills ranging from insurance coverage, phone banking, printing and catering at events in Iowa, New Hampshire and California.
Clinton’s strapped financial situation in late January meant she couldn’t invest in all of the Super Tuesday states, particularly the expensive ground operations required in caucus states.
Obama won every one of those caucus contests on Feb. 5, opening up a critical lead among pledged delegates.
He was also able to launch television advertising earlier than Clinton in subsequent primaries in Virginia, Maryland and Wisconsin and other key states, which ultimately stretched his lead and fueled his momentum today.
The fundraising woes of the Clinton camp have marked a stark turn-about in the historic primary.
The New York senator launched her campaign a year ago with much of the party’s establishment and financial muscle behind her. The Illinois senator, meanwhile, built a grassroots fundraising operation reliant on small givers that continue to fuel him today.
The chink is Clinton’s financial armor actually predates the latest reports.
Clinton’s 2007 year-end report showed her owing more than $5 million to vendors ranging from phone bank firms and pollsters to charter airline operators and telephone companies.
Her campaign last month dismissed those debts as a matter of bookkeeping. "These are not true debts accruing by the campaign, but simply unpaid invoices," said spokesman Blake Zeff.
Zeff pointed out the campaign at the end of 2007 had enough money in the bank to pay off its debts (it finished the year with $13 million on hand after subtracting the debt and contributions earmarked for the general election).
"Sometimes invoices are not paid immediately because we need additional information for our records, or to verify expenses," said Zeff.
But campaign finance experts said the unpaid bills filled a dual strategic purpose: freeing up cash for important up-front expenditures including advertising time, and superficially boosting the campaign's cash on hand to impress donors and pundits.
This year’s compressed primary calendar contributed to Clinton’s financial crunch. But December’s debt was evidence of "a cash flow crunch," said Michael Toner, a former Federal Election Commission chairman who served as general counsel for Republican Fred Thompson's aborted presidential campaign.
"Nobody fails to pay bills just because they don't have time. These are strategic decisions," Toner said, adding "you put off paying bills when you've got obligations that require liquidity."
Not surprisingly, some of Clinton’s biggest debts are to her top consultants, said Massie Ritsch, a spokesman for the non-partisan Center for Responsive Politics.
“I'm sure that they're willing to extend some credit for a time," said Ritsch. "Even if she isn't the nominee, she'll still be a senator and has shown that she can raise plenty of money for her Senate campaigns and can pay off the debt. But in the short term, you need as much cash as possible."
By: Kenneth P. Vogel and Jeanne Cummings
February 20, 2008 11:05 PM EST
Hillary Clinton ended January with $7.6 million in debt – not including the $5 million personal loan she gave to her campaign in the run-up to the critical Super Tuesday elections, according to financial reports released Wednesday.
In contrast, Democratic rival Barack Obama’s campaign’s finances continued to be robust.
He reported raising nearly $37 million and spending nearly $31 million. His cash balance was $25 million, of which roughly $20 million can be spent on the primary. He reported a comparatively small $1 million in debts, owed largely to just three vendors.
The January monthly financial disclosure reports glimpse a behind-the-scenes imbalance that has had a significant impact on the primary contest — one that continues in the days leading up to the critical March 4 primaries in Texas and Ohio.
As the Clinton campaign scrambles for cash, Obama appears on track to raise more than $30 million again in February.
Phil Singer, a Clinton spokesman, downplayed the disparity. “Thanks to an enormous outpouring of support, we will raise more money this month than in any other so far. We have all the resources we need to compete and win,” he said.
But the Clinton report paints a picture of a one-time front-runner under enormous pressure after miscalculating that she would wrap up the nomination before or on Feb. 5.
According to the reports, Clinton raised about $20 million in January, including her loan. She spent nearly $29 million during the month.
She reported a cash balance of $29 million. But more than $20 million of that is money dedicated to the general election. Her personal loan accounts for more than half of the remaining approximately $9 million, leaving just about $4 million in cash raised from donors.
But even that money is illusionary when measured against the reported $7.6 million in debts.
More than $2 million of the red ink is owed to chief consultant and adviser, Mark Penn. But the lengthy laundry list of IOUs also includes unpaid bills ranging from insurance coverage, phone banking, printing and catering at events in Iowa, New Hampshire and California.
Clinton’s strapped financial situation in late January meant she couldn’t invest in all of the Super Tuesday states, particularly the expensive ground operations required in caucus states.
Obama won every one of those caucus contests on Feb. 5, opening up a critical lead among pledged delegates.
He was also able to launch television advertising earlier than Clinton in subsequent primaries in Virginia, Maryland and Wisconsin and other key states, which ultimately stretched his lead and fueled his momentum today.
The fundraising woes of the Clinton camp have marked a stark turn-about in the historic primary.
The New York senator launched her campaign a year ago with much of the party’s establishment and financial muscle behind her. The Illinois senator, meanwhile, built a grassroots fundraising operation reliant on small givers that continue to fuel him today.
The chink is Clinton’s financial armor actually predates the latest reports.
Clinton’s 2007 year-end report showed her owing more than $5 million to vendors ranging from phone bank firms and pollsters to charter airline operators and telephone companies.
Her campaign last month dismissed those debts as a matter of bookkeeping. "These are not true debts accruing by the campaign, but simply unpaid invoices," said spokesman Blake Zeff.
Zeff pointed out the campaign at the end of 2007 had enough money in the bank to pay off its debts (it finished the year with $13 million on hand after subtracting the debt and contributions earmarked for the general election).
"Sometimes invoices are not paid immediately because we need additional information for our records, or to verify expenses," said Zeff.
But campaign finance experts said the unpaid bills filled a dual strategic purpose: freeing up cash for important up-front expenditures including advertising time, and superficially boosting the campaign's cash on hand to impress donors and pundits.
This year’s compressed primary calendar contributed to Clinton’s financial crunch. But December’s debt was evidence of "a cash flow crunch," said Michael Toner, a former Federal Election Commission chairman who served as general counsel for Republican Fred Thompson's aborted presidential campaign.
"Nobody fails to pay bills just because they don't have time. These are strategic decisions," Toner said, adding "you put off paying bills when you've got obligations that require liquidity."
Not surprisingly, some of Clinton’s biggest debts are to her top consultants, said Massie Ritsch, a spokesman for the non-partisan Center for Responsive Politics.
“I'm sure that they're willing to extend some credit for a time," said Ritsch. "Even if she isn't the nominee, she'll still be a senator and has shown that she can raise plenty of money for her Senate campaigns and can pay off the debt. But in the short term, you need as much cash as possible."
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