After Pricey Campaign, O'Malley Faces Large Debt

Gov.-elect Martin O'Malley, shown campaigning Nov. 1 with other Democrats in Frederick's historic downtown, spent much of his campaign money on television ads.
Gov.-elect Martin O'Malley, shown campaigning Nov. 1 with other Democrats in Frederick's historic downtown, spent much of his campaign money on television ads. (By Katherine Frey -- The Washington Post)
By John Wagner
Washington Post Staff Writer
Wednesday, November 29, 2006

Baltimore Mayor Martin O'Malley finished Maryland's most expensive fight for governor in history a half-million dollars in debt, according to a report filed yesterday by his campaign, but aides predicted that the governor-elect would have little trouble raising the money to pay it back.

Aides said O'Malley (D) had turned to former trial lawyer John P. Coale, a prolific Democratic donor, for a loan to keep pace with spending by Gov. Robert L. Ehrlich Jr. (R) in the final stages of a race in which the candidates together spent more than $30 million, much of it on television ads.

"The campaign made a strategic decision that we needed additional funds to avoid being outspent during the final week of the campaign," said O'Malley spokesman Rick Abbruzzese. "The governor-elect borrowed the money from a friend, and it's money that will need to be repaid. It turned out to be the right decision."

O'Malley raised $14.9 million during the four-year cycle, according to the report, including $136,883 in the two weeks after the election. Ehrlich's fundraising chief, John Reith, said yesterday that Ehrlich raised $17.9 million during the cycle and had enough cash remaining to pay outstanding bills.

O'Malley's $500,000 debt appeared to be among the largest incurred by a Maryland candidate but was said not to be out of line with experiences of other candidates across the country.

"This kind of thing has happened before, but probably not the size of it," said state Senate President Thomas V. Mike Miller Jr. (D-Calvert). "But times have changed."

Miller said that he was confident O'Malley could raise money to repay the loan with a single fundraiser and that a natural source of money would be "the fat cats who bankrolled Bob Ehrlich's campaign" but want to remain relevant in state politics.

Coale, who is married to Fox News anchor Greta Van Susteren, was among the principal negotiators of the national tobacco settlement reached in 1997, which led to tobacco companies agreeing to pay billions of dollars to the states.

In an interview, Coale said he and O'Malley had been friends for about six years after being introduced by Rep. C.A. Dutch Ruppersberger (D-Md.), a fraternity brother of his at the University of Maryland.

Coale said that he sat on the steering committee of O'Malley's campaign and that when the need for cash became apparent, "I stepped forward. . . . The tobacco wars were very good to me."

Coale gave more than $112,000 to federal candidates and committees during the 2006 election cycle, according to Federal Election Commission records. His recent contributions in Maryland included $15,000 to the state Democratic Party.

After the 2002 election, the Maryland Democratic Party faced more than $100,000 in unpaid bills associated with get-out-the-vote efforts, much of that intended to benefit the party's unsuccessful gubernatorial nominee, then-Lt. Gov. Kathleen Kennedy Townsend, according to party officials.

Massie Ritsch, a spokesman for the Center for Responsive Politics, a group that tracks campaign spending nationally, said other candidates have incurred debts of similar magnitude in recent years.

"I don't have any doubt he'll be able to make it up," Ritsch said of O'Malley. "Usually, if you're a loser and if you have a debt, it's a problem. If you're a winner, it's not."

Ross Goldstein, deputy administrator of the State Board of Elections, said that Maryland law does not limit the size of loans to candidates but that a loan must be repaid by the end of the following four-year cycle. Otherwise, it is considered a direct contribution.

Until this year, the most costly governor's race in Maryland was in 2002, when Ehrlich and Townsend raised a combined $19 million. Previously, the most expensive race had been the 1998 campaign for governor, in which Parris N. Glendening (D) and Ellen R. Sauerbrey (R) raised about $6 million each.

Staff writer Matthew Mosk contributed to this report.

© 2006 The Washington Post Company