McCain Faces Finance Woes On the Stump

Even if McCain succeeded in overcoming a huge financial disadvantage in the primaries and won the nomination, Malbin said, he would then face months of campaigning on fumes while the Democratic nominee would face no spending restrictions. It would most likely fall on the Republican Party to assume the costs of running a separate campaign on McCain's behalf -- one that would have to be conducted without any consultation with McCain.

Jan Baran, a Republican campaign finance expert, said the practical problems of McCain would be compounded by the irony of the senator turning to the party to run what would essentially be a shadow campaign on his behalf.

"He would then have to rely on a legal fiction he spent years criticizing: having the party spend tens of millions of dollars independently of his campaign," Baran said.

Then-Rep. Richard A. Gephardt (Mo.) tried to mount his 2004 primary bid for the Democratic presidential nomination using public funds and could not keep up with Sen. John F. Kerry (Mass.) and former Vermont governor Howard Dean, said Steve Elmendorf, who ran the Gephardt campaign.

"You're at a competitive disadvantage that I think is not sustainable," Elmendorf said.

The only other clear option for McCain is to invest his own money in the campaign. Brian Jones, a McCain campaign spokesman, said that has not been discussed.

Kerry faced a similar problem when he ran short of funds late in 2003. Wife Teresa Heinz Kerry's $500 million fortune was off-limits, but he was able to take a $6.4 million mortgage on half of the value of the Beacon Hill home they owned jointly in Boston.

But even that approach could be problematic for McCain. Property records show that McCain transferred ownership of his homes in Virginia and Arizona to his wife or to trust accounts that she controls.

Campaign finance lawyers said McCain might be able to stretch a legal argument around the notion that Arizona is a state that views the holdings of married couples as community property. But that idea has never been tested in a presidential campaign.

Jones said the campaign is counting on rebuilding McCain's bank account with help from small-dollar donors. As long as that is the case, McCain's new campaign manager, Rick Davis, will have to teach his colleagues to work on a shoestring, Ballard said.

"I think he has a big enough presence that they can operate a campaign that's more lean, more frugal," Ballard said of McCain. "They're going to have to, because I don't think the money's going to be there for a while."

The approach McCain plans to take may start to emerge next week, after a long-planned weekend strategy session that now looms as a crucial chance to set the campaign's new course. The remaining campaign team will face a series of decisions, including which early states to focus on and where to look for talent to plug the holes created by this week's departures. And, of course, how to finance the campaign ahead.

Staff writer Dan Balz and researcher Madonna Lebling contributed to this report.