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John McCain to rely on party money

To confront the Obama juggernaut, Senator John McCain, whose fund-raising has badly trailed that of his Democratic counterparts, is leaning on the Republican National Committee.
John McCain
Republican presidential candidate, Sen. John McCain, R-Ariz., left, and his wife Cindy walk to his chartered plane on Sunday in Newark, N.J. Jeff Chiu / AP
/ Source: The New York Times

Pivoting toward the general election, Senator Barack Obama is turning again to his history-making fund-raising machine, which helped to anoint him as a contender against Senator Hillary Rodham Clinton and then became a potent weapon in their battle for the Democratic nomination.

To confront the Obama juggernaut, Senator John McCain, whose fund-raising has badly trailed that of his Democratic counterparts, is leaning on the Republican National Committee. Mr. McCain’s efforts to raise money suffered a blow this weekend when a key fund-raiser, Tom Loeffler, resigned because of a new campaign policy on conflicts of interest.

Mr. McCain is likely to depend upon the party, which finished April with an impressive $40 million in the bank and has significantly higher contribution limits, to an unprecedented degree to power his campaign, Republican officials said.

To that end, Republican officials said they were enlisting President Bush, a formidable fund-raiser who has raised more than $36 million this year for Republican candidates and committees, for three events on Mr. McCain’s behalf. They will appear together at a fund-raiser in Phoenix on May 27, and the next day the president will take part in a luncheon with Mitt Romney in Salt Lake City and then an exclusive dinner at Mr. Romney’s vacation home in Park City, Utah.

Financial arms race
The financial arms race that is shaping up is likely to produce the most expensive presidential contest in history and test the commitments that both Mr. Obama and Mr. McCain have made to rein in the influence of money in politics.

Mr. Obama’s fund-raising success makes it increasingly likely that he will back away from a pledge he made last year to accept public financing for the general election — and its attendant spending limits — if the Republican nominee also accepted public money.

Several major fund-raisers for Mr. Obama said in interviews that they could not envision the campaign sheathing its sword and accepting public financing, given how powerful Mr. Obama’s fund-raising could be in the Democrats’ urgent quest to reclaim the White House. Mr. Obama would be the first major-party presidential candidate to bypass public financing for the general election since the system began in 1976.

Mr. McCain, who abandoned public financing in the primary but has indicated he would employ it in the general election, is aggressively building a joint fund-raising operation with the Republican National Committee and state party committees in four battleground states. These committees can raise money far in excess of the $2,300 limit imposed on individuals giving to Mr. McCain’s presidential campaign. Donors can write a single check of almost $70,000 to the committees that is divvied up to various entities.

Offering a glimpse of the kind of money that can be spread around with such a committee, $300,000 was collected from nine hedge fund executives and real estate investors at an event in New York in March, according to a report filed with the Federal Election Commission. More than $10 million was raised at an event on Thursday in Washington, McCain campaign advisers said.

Lacking a robust small-dollar Internet fund-raising operation, Mr. McCain has a busy schedule of some two dozen high-dollar fund-raising events this month.

'Hard to be a reformer'
Advocates concerned about the influence of money in presidential campaigns expressed alarm at how two candidates who have emphasized reform have moved closer to a no-holds-barred sprint for cash. Mr. McCain was a co-author of sweeping campaign finance legislation in 2002, and Mr. Obama has rejected donations from federal lobbyists and political action committees.

But the crucible of a presidential contest inevitably yields new priorities.

“It’s hard to be a reformer,” said Joan Claybrook, president of Public Citizen, “when you’re trying very hard to raise as much money as you can.”

There are early signs, though, that some of the more controversial elements of recent presidential campaigns might be somewhat muted this time around.

On Thursday, the leader of Progressive Media USA, which had been expected to be the major vehicle on the Democratic side for unregulated donations directed toward television advertising, said the group would stand down because of disapproving signals from the Obama camp.

Similarly, the Republican side has not mounted a major “soft money” effort for the general election comparable to Swift Boat Veterans for Truth, which in 2004 undermined the presidential bid of Senator John Kerry. Many potential donors to such groups, which are able to skirt restrictions on donations, are wary of displeasing Mr. McCain, Republican operatives said.

Mr. Obama’s fund-raising machine has been powered by more than 1.5 million donors, the overwhelming majority of whom have given to him in small increments over the Internet. Mr. Obama has argued that with this wide base of small donors, he has created something of a parallel system of public financing.

His fund-raising apparatus, however, also features a formidable high-dollar network that has collected more $1,000 contributions and above than Mrs. Clinton’s once-vaunted team of bundlers of campaign donations. A key task would be to bring members of Mrs. Clinton’s team into the fold if she leaves the race. Informal conversations between top fund-raisers on both sides have begun, but feelings between the two camps remain raw, supporters from both campaigns said.

Although Mr. Obama suggested recently that he might consider capping donations for the general election, his campaign manager, David Plouffe, said in an interview that there had been “no real discussions” about the possibility.

“We honestly haven’t had a rigorous discussion about it,” Mr. Plouffe said.

Although Mr. Obama has collected three times as much money as Mr. McCain, Mr. Plouffe said he “would not accept the proposition” that Mr. Obama would outspend Mr. McCain.

“I think they’re going to have a lot of money,” Mr. Plouffe said.

Mr. Plouffe said that Mr. McCain might not raise as much money through his campaign but will get substantial support through the Republican National Committee and a “constellation” of so-called 527 groups, named for the part of the tax code they are organized under, and other independent efforts.

“I think what you’ll see is a sophisticated and well thought-out web of outside groups and the R.N.C. essentially being the main drivers of the McCain campaign,” Mr. Plouffe said.

Mr. McCain rebuked an independent group that financed television advertisements on his behalf last year before the South Carolina primary. Lately, however, his campaign has been saying that Mr. McCain cannot be expected to “referee” advertisements by outside groups beyond his control.

Mr. McCain drew accusations of hypocrisy this year when he backed out of public financing for the primary campaign, which he had initially sought when his campaign was struggling but then pulled back from after his fortunes rose. Critics argued that he had used the promise of public financing to secure a $4 million loan to keep his campaign afloat, something that would have bound him to the spending limits that come with the public system.

Loggyist ties draw scrutiny
Mr. McCain’s ties to lobbyists have also been drawing increasing scrutiny, a problem the campaign sought to address last week with the new conflict-of-interest policy. Mr. Loeffler, a lobbyist who was the general co-chairman of Mr. McCain’s campaign, became the policy’s most high-profile casualty on Friday when he submitted his resignation. Mr. Loeffler’s firm did work for Saudi Arabia, which included a May 2006 meeting between Mr. Loeffler, Mr. McCain and the country’s ambassador, according to lobbying records. The meeting was first reported over the weekend by Newsweek.

Mr. McCain’s advisers say they hope their joint fund-raising efforts can raise $150 million, or just over $20 million a month until November. Coupled with the $84 million Mr. McCain would receive through public financing, which the campaign could spend in the two months after the Republican convention, his advisers insist they will have enough resources to compete with Mr. Obama.

The Republican National Committee raised roughly $20 million in April, said Mike Duncan, the committee’s chairman. Mr. McCain collected $18 million in April, his second full month as the presumptive Republican nominee, a campaign spokeswoman said.

By way of comparison, Mr. Kerry raised $44 million in March 2004, the month he secured the Democratic nomination.

“It’s certainly below what one would expect for a Republican nominee at this stage in the race,” said Anthony Corrado, a professor of government at Colby College and a campaign finance expert.

Running a lean campaign, however, and shifting many functions to the national committee, Mr. McCain has amassed a war chest that left him more than $21 million in the bank at the end of April.

Frank Donatelli, the deputy chairman of the national committee and the chief liaison with the McCain campaign, predicted that the party would give more financial help to Mr. McCain that it has to past nominees.

“We intend to provide substantial, maybe unprecedented, resources to the McCain campaign,” Mr. Donatelli said.

Party reliance has limitations
But Mr. McCain’s heavy reliance on the party comes with limitations. Only a relatively small pool of money can be used in advertising that is coordinated between the party and the campaign. The party can also share the costs for generic advertisements that benefit other Republican candidates, but relying on such commercials could constrain Mr. McCain’s media strategists.

Mr. Obama has been collecting more than $40 million a month this year, without any help from the Democratic National Committee. Mr. Plouffe said it was hard to say whether Mr. Obama would be able to keep up that rate through the summer, but he said he expected Mr. Obama to get a bounce if he indeed became the nominee.

Last week, the Obama campaign signed its own joint fund-raising agreement with the national committee, as did Mrs. Clinton’s campaign. Party officials are hoping the agreements will give the party a much-needed boost, because it has seriously lagged in cash on hand. A spokeswoman for the party said it finished April with roughly $5 million in the bank, but its fund-raising usually surges once a nominee has been declared.

This article, , first appeared in Monday editions of .