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Romney Outpaces GOP Pack in Fundraising
McCain's Team Regroups at No. 3

By Matthew Mosk and Perry Bacon Jr.
Washington Post Staff Writers
Tuesday, April 3, 2007

Former Massachusetts governor Mitt Romney provided a jolt to the Republican presidential contest yesterday, reporting a haul of $21 million in the first three months of the year, as Sen. John McCain of Arizona posted a lackluster third-place finish that even his campaign manager called a disappointment.

As campaigns release their first meaningful fundraising figures in what appears certain to become the most expensive presidential campaign in history, McCain's $12.5 million total also put him behind former New York mayor Rudolph W. Giuliani, who leads the Republican field in public polls and reported taking in $15 million in the first quarter.

Among Democrats, Sen. Hillary Rodham Clinton (N.Y.) has set the pace for the field so far, reporting Sunday that she had raised $26 million in combined primary and general election funds and transferred an additional $10 million from her Senate campaign account. Her total was followed by that of former North Carolina senator John Edwards, who raised $14 million. Sen. Barack Obama of Illinois has so far declined to release figures for his campaign.

The totals of the major contenders easily surpassed the record $8.9 million raised by Al Gore in the first three months of 1999.

Romney has labored in single digits in polling but has been an aggressive fundraiser. He launched his campaign with a "National Call Day" at the convention center in Boston in January, where nearly 400 of his supporters, including Meg Whitman, the chief executive of eBay, and Missouri Gov. Matt Blunt called friends to ask them to back Romney. The event raised a whopping $6.5 million in a single day.

But the showing by McCain, who had been ordained the front-runner in the GOP contest from Day One and had worked to win over many of the fundraising Pioneers and Rangers who helped fill President Bush's coffers in 2000 and 2004, was a surprise to both analysts and rival campaigns. Most characterized the numbers as an unexpected sign of distress for a campaign that has been building its machinery for eight years and was one of the first to set up a fundraising committee.

"By any historical measure, $12.5 million is a lot of money," said Alex Vogel, a Republican strategist not affiliated with any candidate. "But McCain was the front-runner for so long, the expectation was he would not come in third."

McCain campaign manager Terry Nelson acknowledged as much yesterday, coupling his release of the dollar figure with the gloomy admission that "we had hoped to do better."

Nelson said the campaign has begun to aggressively revamp its fundraising operations and insisted in an interview that the showing does not reflect a lack of support for the Arizona senator.

"While we wish we would have done better in this quarter, certainly we did well enough to fight an effective campaign, which is what we're going to do," he said.

Nelson added that a new system of accountability, including targets for individual fundraisers, has been established for the members of McCain's finance team. The campaign also announced that its general co-chairman, former Texas congressman Tom Loeffler, recently was put in charge of fundraising and began a review of fundraising operations.

In interviews yesterday, key 2008 fundraisers blamed McCain's lackluster quarter on a host of shortcomings, most notably his difficulty summoning support from traditional Republican donors who were unhappy about his campaign finance reform agenda in the Senate and his earlier clashes with Bush.

"I think there are a lot of people out there who got turned off during the South Carolina primary eight years ago and never returned," said Richard Hug, who won Ranger designation because he raised more than $200,000 for Bush's campaign efforts.

"It was very bitter," said Hug, who is assisting Giuliani. "I don't think [McCain] has a whole lot of support among the Bush people in general."

Wayne Berman, a Washington lobbyist and Bush Pioneer who is backing McCain, said yesterday that the disappointing figures stem from a failure to organize large donor events earlier in the year. He said the campaign held just a handful of events in January and February, and started to pick up the pace in March, with 23 fundraisers.

"The opportunities simply weren't there for people to give," Berman said.

But Berman discounted the impact the numbers would have on the campaign moving forward. He said McCain already has two dozen events scheduled for April and a similar number on the books for May.

A large fundraising take at this stage "is hugely important if you have to prove you are a credible candidate," Berman said. "McCain is an enormously credible candidate already. He is extremely visible, and is the most visible on the most difficult and defining issue of the day. He's in Iraq, he's on TV, he's talking about the broader war on terror."

In the first quarter, the candidate who benefited the most was Romney. In addition to announcing his formidable total, his campaign also pointed out that all the money he raised can be spent in the primaries. Romney also lent his campaign about $2 million, putting his total figure closer to $23 million.

Scott Reed, a Republican strategist who is not affiliated with a 2008 campaign, said Romney "cemented his position as a first-tier candidate."

"This reinforces the notion that he can go the distance," Reed said.

Ronald C. Kaufman, a lobbyist who has been advising Romney on his fundraising effort, said the candidate built on a range of connections he has made over his lifetime. He said donors included supporters from Michigan, where Romney's father served as governor; contacts from his career as a management consultant, running the Salt Lake City Olympics in 2002 and serving as Massachusetts governor; as well as fellow Mormons.

"I think he did a really good job of tapping into all those worlds," Kaufman said.

Romney's showing rivaled the almost $30 million that then-candidate Bush raised in the second quarter of 1999.

Early success in fundraising is no guarantee of results at the ballot box. In 1995, then-Sen. Phil Gramm of Texas raised more than $8 million and had $13.5 million on hand at the end of the first quarter of campaigning, but he did not stay in the Republican contest beyond a fifth-place finish in Iowa.

Fergus Cullen, a former Gramm staffer who is now the chairman of the New Hampshire Republican Party, said experience taught him that McCain, a candidate with a formidable campaign organization in the state, should not be counted out.

"I know firsthand that money isn't everything," said Cullen, who is not backing a candidate in the Republican primary. Gramm "had all the money and none of the votes."

Because full campaign finance reports will not be available until April 15, it is unclear just how much of a financial handicap McCain will face. None of the candidates have released figures on how much they spent during the first quarter, and among the Republicans, only Giuliani announced how much money remained in his account when March ended.

Giuliani aides announced that he had raised $15 million overall, $14 million of which is eligible to be spent in the primaries, and had $11 million in cash on hand.

Jack Oliver, who headed Bush's finance effort, said it is "critical to look at what the burn rate is." He said, "If it cost you a lot of money to raise these amounts, they aren't nearly as much help."

Staff writers Dan Balz and Michael D. Shear contributed to this report.

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