Posted on 05/11/2008 10:34:52 AM PDT by DeaconBenjamin
It took 20 years for John Glenn, the former astronaut and Democratic senator, to repay the debts that he ran up in his failed bid for the presidential nomination in 1984.
Nobody is predicting that Hillary Clinton, whose campaign debts are estimated at between $20m and $30m – and rising – would take that long to meet her obligations. But the financial strain is getting more difficult with each day.
Having raised little more than $1m (€650,000, £510,000) since her defeat in North Carolina and narrow victory in Indiana last Tuesday, compared to $10m in the days following her Pennsylvania win last month, Mrs Clinton’s decision to fight on is almost certainly adding to her mountain of debts.
“I don’t recall the last time any candidate faced withdrawal from the race with debts of this magnitude,” says Michael Toner, the former head of the Federal Election Commission. “She began the race with the most formidable money machine in modern history and she looks likely to end it in record debt.”
The financial story of Mrs Clinton’s bid offers a glimpse of her campaign’s broader failures. The principal mistake was to assume that she would comfortably “outraise” her rivals. Although she has garnered what would have been a record $190m since January 2007, Barack Obama has raised almost $240m. This was in spite of Mrs Clinton beginning the race with $9m carried over from her Senate re-election campaign a few months earlier.
By drawing on perhaps the most extensive Rolodex in US politics, Mrs Clinton has been able to get thousands of people to give $2,300 – the maximum individual contribution permitted under FEC rules. But she has tapped almost everyone she knows, as well as their friends, leaving her vulnerable to a persistent debt overhang.
Mr Obama, in contrast, has relied on an internet fundraising model in which hundreds of thousands of people he has never met – and is never likely to meet – have contributed in small increments of $5 and upwards. These donors can thus legally be revisited every time the campaign needs to refuel.
“If you base your campaign on being the incumbent, then you can’t suddenly start asking the public for $25-contributions to repay your debt,” says Leo Hindery, former senior policy advisor to John Edwards, who withdrew from the race in January. “Donors sense the whiff of death around a campaign and the money just dries up.”
America’s campaign finance regulations, which were revamped in 2003 in a bill co-sponsored by John McCain, now the Republican nominee, also put tight constraints on the candidate’s ability to repay loans they have made to themselves.
Mrs Clinton has lent her campaign $11.4m of her own money since January. Under the rules she will have to write almost all of that off unless she can raise money to repay herself before the Democratic convention in late August. “It would be politically very awkward for Senator Clinton to hold fundraisers to repay herself,” says Chip Smith, who was chief financial officer to Al Gore’s 2000 presidential campaign.
Other kinds of debt, including money owed to campaign “vendors”, such as polling groups, charter plane companies or staff salaries, can be delayed indefinitely – as happened with Mr Glenn and other failed candidates. “You can put off the phone company for another month, but not that [personal] debt,” says a Democratic attorney.
According to Mrs Clinton’s most recent filings, her biggest debts are to Mark Penn, her chief pollster and former senior advisor, who is owed $4.6m; Mandy Grunwald, who makes many of her television advertisements, who is owed $528,000; The Spoken Hub, a phone bank provider that is owed $1.16m; and MSHC Partners, which does direct mailing and is owed $956,000. These amounts are likely to have grown. There are also dozens of smaller companies in states such as Pennsylvania and Indiana that organised campaign events in the lead up to polling days or provided catering to campaign staff.
“It is generally the TV production and polling research people who get paid last,” says Mr Smith. One possible solution for Mrs Clinton would be to get Mr Obama to help repay her debts in exchange for her withdrawal. Many failed candidates have struck this deal in the past – most recently Mrs Clinton helped Tom Vilsack, the former governor of Iowa, repay his debts last year in exchange for his signing on to her campaign.
Similarly, some of Mr McCain’s biggest donors helped former Republican candidate Sam Brownback pay back $40,000 in debt after Mr Brownback endorsed Mr McCain.
Howard Wolfson, Mrs Clinton’s communications director, on Friday denied rumours they had been approached by Mr Obama’s campaign with such an offer.
Even if Mrs Clinton is quietly hoping Mr Obama will help retire her debts, one Democratic campaign finance attorney said she could not count on such an offer. “There is always an effort to bring the party together . . . but I don’t think it is something you can take to the bank,” the attorney said. “The limit is still $2,300 – it’s a lot of people [that Obama would have to ask for donations]. It’s not like going to eight friends.”
There is always the possibility that Mrs Clinton will stay on in the fight and keep writing off her own money. Together she and Bill Clinton have $109m in personal income and, since they file joint tax returns, she is entitled to draw on her husband’s money. “If they want to throw good money after bad they can,” says Mr Hindery. “But her donor base has already hit its limit.”
Bubba will cut his losses and divorce her. She needs him more than he needs her.
Hillary — the self professed hard-working white people’s candidate.
How ironic. She’s a great believer in redistribution of wealth, and it seems that’s exactly what she’s doing.
There, fixed it.
...people like Mark Penn; Mandy Greunwald ect. I could care less about; because they hoped to get rich off a Hillary presidency...but a small business guy that runs a catering firm and got stiffed; well that’s a different story....looks like he’ll get screwed.
Apparently, China isn’t answering her calls??
Pray for W and Our Troops
I’m sure all the contributors to Obama’s campaign would be thrilled to hear their money might be going to pay off Hillary’s debts.
" I'll follow him around the Horn, and around the Norway maelstrom, and around perdition's flames before I give him up."
Roger that. I’m still waiting for the NYT in depth expose’.
Pick a Duncan Hunter or Tom Coburn as VP and conservatives will open their wallets.
I wonder if all those loans that Clinton made to her campaign were in the form of cash or if those loans are just ways of pulling cash out of the campaign.
“But she has tapped almost everyone she knows...”
Not to mention more than half of the Chinese Communist Party leadership.
Chopped an inion and I still can’t shed a tear...;’}
Thanks. I almost believe this phoney has raised 240 million dollars five or ten bucks at a time. Someone ought to audit his lists of so-called donors. They may bear a striking resemblance to voter registration lists in Chicago.
So what I am reading is that she needs us to all send her 3 cents or so. That would cost her more to track and process than the return.
“Under the rules she will have to write almost all of that off unless she can raise money to repay herself before the Democratic convention in late August.”
So.... she gets to write off a bunch of taxes.
No he won't. Spouses can't be forced to testify against each other.
I wouldn’t be so sure these two creeps can continue to shake the money tree as they did in the past. They have damaged their brand beyond repair. I don’t see even foreign audiences paying Flubba what they used to for “speeches,” the primary way these two laundered their campaign donations.
Also under McCain-Feingold, a candidate’s personal loans to a campaign are in a special category: they have to repaid BEFORE Election Day, which, in this case, the statute considers nomination day.
So the Witch stands to lose over $11M of her own money if she doesn’t raise enough to repay herself by August.
What makes anyone think Hildabeast intends to pay her campaign debts no matter how things turn out?
Yeah, right, hers. Ha! The only thing more laughable would be if they called it earned income.
They need to get the Iranian nutjob to take to the Qom well and see if the hidden Iman might crawl out with a bag of money for Her Heiness.
As Spock would say, "Fascinating."
While you're in it -- and how many millions a year after you leave?
Me thinks we need to bring back Debtors’ Prison for politicians. Just think of all the wasteful taxing and spending we’d stop!
She certainly gave it a shot.
Follow the money...
No one wants to contribute to a campaign...I mean bribe...a politician unless there is a significant possibility of return on investment, so to speak.
Dried up donations = dried up political career.
Toooooo Baaaaad....
Wrath of Khan.
Hey Obama....DON'T PAY HER DEBTS OFF!
He will divorce her if she has to bow out to protect his money and future ability to make money. He’s the only one dimwits are still willing to pay money to....without him, she’s not $hit.
The Hidden Imam's kinda busy right now, but I hear his wife's not a Hillary fan...
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