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Clinton, Giuliani Hold Financial Leads
Democrats Again Outpace Republicans

By Matthew Mosk and Sarah Cohen
Washington Post Staff Writers
Tuesday, October 16, 2007

Sen. Hillary Rodham Clinton (D-N.Y.) and former New York mayor Rudolph W. Giuliani (R), the front-runners for their parties' presidential nominations, entered the final months of the primary season with another crucial advantage: more money to spend than their rivals.

Clinton topped the Democratic field, reporting $35 million available to spend on the primaries, edging out Sen. Barack Obama (Ill.), who had roughly $32 million in reserve for the battle for the nomination, the campaigns reported. Both Democrats continued to enjoy a huge advantage over their Republican counterparts. Giuliani ended September with $16 million in his campaign account, while his closest competitor, former Massachusetts governor Mitt Romney, had $9 million in available cash.

Obama, Giuliani and Romney all spent more than they raised in the past three months, with Romney spending $21 million -- more than twice what his campaign brought in.

Struggling to catch the better-known front-runners in the polls, Obama and Romney have been far more active in spending on television ads than their rivals. Obama has aired more than 4,000 spots on Iowa television this year, compared with 1,600 for Clinton. Romney, meanwhile, has run more ads in Iowa and New Hampshire than have all the other Republican candidates combined. Romney had placed 10,893 television and radio ads through Oct. 10, according to Nielsen Co., and advertising accounted for almost a third of Romney's outlay over the past three months. Romney also lent his campaign $8.5 million.

When asked about their pace of spending, Romney campaign officials have pointed to the significant hurdles the former governor faced as a relative unknown in a field of high-profile GOP contenders.

"The fact that Governor Romney, when we announced, was at 4 percent [in the polls] and was practically unknown outside of Utah and Massachusetts was a significant challenge, especially given the fact that we were placed into a fundraising environment that had us competing against candidates who had universal name recognition among Republican donors," said Kevin Madden, a Romney spokesman.

While most of the candidates concentrated their spending in Iowa, New Hampshire and South Carolina, finance reports filed with the Federal Election Commission yesterday show that Giuliani invested thousands of dollars opening campaign offices in places such as Fargo, N.D., and Columbia, Mo.

Giuliani's decision to spend there, as well as in Florida, New Jersey and Illinois -- all states that will be part of a Feb. 5 mega-primary -- signals that he alone among the Republicans is laying the groundwork for a national primary strategy, campaign strategists said.

"It looks a lot like Rudy is banking on a breakout strategy, where he survives early losses and gets to the big states on January 29 and Super Tuesday," said Scott Reed, a former campaign strategist for Robert J. Dole who is not attached to any presidential campaign this year.

Giuliani raised $11 million in the third quarter of 2007 -- more than his Republican counterparts -- and spent $13 million without making a significant purchase of television advertising.

The latest entrant to the GOP field, former senator Fred D. Thompson (Tenn.) reported $7.1 million in cash on hand. Sen. John McCain (Ariz.) finished September with $3.5 million in the bank, but after factoring in $1.7 million in debts and $1.8 million in funds he can use only if he becomes the GOP nominee, McCain finished the third quarter $94,000 in the red. Sen. Sam Brownback (Kan.) had just $95,000 on hand after he spent heavily in an unsuccessful attempt to win the Iowa straw poll.

Those figures were dwarfed by the amounts banked by the leading Democrats from July to September.

Clinton raised $23.7 million in funds that can be used for the primaries, bringing her total to more than $78 million for the year, and she spent more than $22 million in the period. Obama raised roughly $20 million in primary funds, boosting his total for the year above $76 million, and he spent $21.5 million.

Former senator John Edwards (N.C.) raised more than $7 million in the period, spent roughly $8 million and had more than $10 million in reserve for the Democratic primaries. New Mexico Gov. Bill Richardson, who has gained some traction in polls in Iowa and New Hampshire, reported more than $5 million in cash on hand.

Clinton was sitting on an additional $15 million that she can spend only in the general election, while Obama had $4 million more that he can spend if he is the Democratic nominee.

The quarterly financial reports offer an important look inside the gears of the campaigns as they move out of the quiet summer months and into one of the most active phases of the race. Steve Elmendorf, a Democratic strategist who worked on Richard A. Gephardt's 2004 White House bid, said it is in the coming weeks that campaigns will start to dump money into television advertising and into organizational efforts that will in large measure determine the outcome of the early contests.

The reports also shed new light on the people who are donating money, and in some cases bundling checks, for the campaigns.

Clinton's campaign on Sept. 14 sent refunds totaling $804,850 to 249 donors -- all of them associated with the disgraced bundler Norman Hsu.

The campaign decided to refund the money raised by Hsu, as well as $23,000 that Hsu donated himself, after news reports revealed that he was a fugitive who had jumped bail before being sentenced on fraud charges. The Justice Department has since filed charges against Hsu alleging that he was running several Ponzi schemes involving scores of victims in multiple states.

Many of the investors who now say they were cheated by Hsu told authorities they were pressured by Hsu into donating to the Clinton campaign. One major investor of Hsu's, New York financier Joel Rosenman, along with three of his relatives, appears on the list of refund recipients. So do five members of the Paw family from Daly City, Calif., a group of modest means.

"While we had no information that any specific individual made a contribution that was not from his or her personal funds, we decided to refund those donations out of an abundance of caution," said Clinton campaign spokesman Howard Wolfson.

This is the first FEC filing from Thompson's presidential campaign, and it shows among other things that he has not yet become a major draw for the financial backers of President Bush. Only 19 of the 631 individuals previously identified as Pioneers or Rangers -- designations that George W. Bush's campaign gave to his top bundlers -- have joined the Thompson campaign.

William H. Strong, a vice chairman at Morgan Stanley, is one of those who signed on with Thompson after seeing little in the initial Republican field that excited him. "There were many positive attributes of the other candidates, but trying to reach a decision about who I thought could best serve this country as president, I felt it would be Fred," Strong said.

Giuliani's spending was elevated at least in part because he traveled in style. He often stayed in luxury hotels, spending $2,010 at the Greenbrier in West Virginia, $4,034 at La Costa Resort and Spa in Carlsbad, Calif., and $5,370 at the Fairmont in San Francisco. He also spent more than $565,000 reimbursing various corporate supporters for private jet travel and an additional $800,000 on charter jet travel.

"We have said, at the end of the day, looking at the total that we have, it shows we're running a very efficient and effective campaign and are very mindful of the donations that we receive," said Maria Comella, a Giuliani spokeswoman.

One Giuliani bundler added yesterday that he doesn't care how the candidate is spending his money. "I don't give a damn whether he's staying at Motel 6 or Ritz-Carlton," the bundler said. "What I care about is where he is in the polls."

Staff writer Perry Bacon Jr. and staff researcher Madonna Lebling contributed to this report.

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