McCain Faces Finance Woes On the Stump
Thursday, July 12, 2007
With just $2 million in the bank and a campaign organization in turmoil, Sen. John McCain now looks out on a vastly different landscape when it comes to financing a run for the White House.
Every option before him carries a significant downside. Accepting public financing -- an idea his campaign said yesterday that it was strongly considering after anemic second-quarter fundraising -- could put McCain at a steep disadvantage in the early-primary states.
The Republican senator from Arizona is barred from committing to the campaign a family fortune estimated to be worth as much as $53 million because the assets are held solely by his wife. She is limited to giving just $2,300 to his primary campaign, like any other donor.
Private donors, meanwhile, will have to be convinced that they are not throwing money into a failing enterprise. "It's going to be difficult," said Brian Ballard, a fundraising veteran who oversees McCain's Florida money operation. "The vultures are circling. This is going to have to be a different kind of finance effort."
The grim assessment came yesterday as the McCain campaign was still reeling from the Tuesday departures of campaign manager Terry Nelson and chief strategist John Weaver. Campaign officials confirmed that finance director Mary Kate Johnson had resigned, and sources close to the campaign said other departures are likely.
Drawing from the nation's public finance system would present McCain with "an extraordinarily steep mountain to climb," said Michael J. Malbin, executive director of the Campaign Finance Institute.
Almost all of the other major candidates in both parties are poised to abandon public financing and will thus be free to raise and spend as much as they can.
The public system, created in the aftermath of the Watergate scandals, forces candidates to submit to strict state-by-state limits on how much they can spend until the day their party's national convention selects a nominee. In exchange, they are granted matching funds from the U.S. Treasury. Given the level of spending on modern campaigns, those limits seem quaint, Malbin said.
In New Hampshire, for instance, McCain would be permitted to spend no more than $817,800 during the primaries. He spent $137,652 there in the first three months of the year, without running a single television ad.
His challenge may be greatest in Iowa, where he would be limited to spending $1.5 million. Evan Tracey, a campaign media analyst for TNS Media Intelligence, said other GOP front-runners will probably spend between $7 million and $15 million each in Iowa on television ads alone. "In that situation, you really are taking a knife to a gunfight in terms of advertising," Tracey said.
Perhaps a bigger obstacle, Malbin said, is that there is an overall national limit on primary spending that in 2004 was about $41 million, and McCain has already spent about $23 million.
"I'd like to know, how would he go between now and the nomination on a total of $18 million?" Malbin asked.