By Matthew Mosk
Washington Post Staff Writer
Saturday, December 29, 2007
Wealthy Texas financier Gene Phillips had thought about getting behind Republican Mike Huckabee's presidential bid for some time, but it was only after the former Arkansas governor surged in the polls that Phillips decided to open his wallet and his sprawling Dallas estate for a fundraiser.
"When I saw his numbers start to move, that impressed me," Phillips said. "Then his numbers went from single digits to double digits, and I got on the phone to his campaign and offered to help."
For most of the year, as Huckabee remained at the back of the Republican pack, his campaign struggled to raise money. Only a handful of big-dollar bundlers were aboard, and those were mostly from Arkansas. For a time, he had no finance director, relying instead on his daughter-in-law to organize fundraising.
All that changed as Huckabee climbed in the polls, overtaking Mitt Romney in Iowa and running even with Rudolph W. Giuliani nationally. Huckabee has raised $4,755,818 on the Internet since Oct. 1 -- double what he raised from all sources during the first nine months of 2007. He has a large new cast of big-dollar bundlers. And his efforts in Iowa and elsewhere are getting a major boost from independent groups that are able to raise unlimited amounts, often without disclosing the identities of their backers.
With the rush of money have come challenges and potential problems. Huckabee's aides have had little time to research the backgrounds of his new lineup of bundlers and have expressed frustration over the emergence of several outside groups that are now raising and spending money on his behalf.
Only after Huckabee pocketed $330,000 from Phillips's Dallas fundraiser on Dec. 18, for instance, did he learn from a local reporter that Phillips had been subject to $850,000 in fines from the Securities and Exchange Commission and had once faced a federal bribery indictment in a sweeping case alleging organized crime influence on Wall Street. Phillips was acquitted in the criminal case. Huckabee said he welcomed Phillips's support.
J. French Hill, Huckabee's finance chairman, and the chief executive of Delta Trust & Banking Corp. in Little Rock, acknowledged the difficulty of vetting the background of every new bundler. "Our campaign staff is trying to do that the best they can," Hill said. "Particularly as it relates to fundraisers who are assembling events in other cities, they have been briefed on rules and should be sensitive to their responsibility."
Even with his newfound resources, Huckabee will probably remain well behind Romney and Giuliani -- who between them raised $100 million between January and September -- when presidential candidates submit their fundraising totals to the Federal Election Commission on Monday. All three are expected to remain far behind the best-financed Democratic candidates, Sens. Hillary Rodham Clinton and Barack Obama, who are expected to add tens of millions to the more than $150 million raised between them so far.
Nonetheless, Huckabee should for the first time have enough money to contend with an onslaught of costly advertising and organizational challenges during the early primaries. Chip Saltsman, Huckabee's campaign manager, said he remains unconcerned about any financial imbalance heading into Feb. 5, when candidates must compete in huge, expensive media markets across the country.
"It's not how much money you raise; it's what you do with the money you do raise," Saltsman said. "There's a reason we're doing so well, and it has nothing to do with money."
One of Huckabee's new backers that has caused concerns is Common Sense Issues, an independent group that has been accused of financing push polls in Iowa, New Hampshire and Michigan. The group's Web site, TrustHuckabee.com, also suggests the organization is doing crucial leg work by getting precinct captains in place for the Iowa caucuses. The group has funded phone banks to call Huckabee supporters and has tried to recruit captains for each Iowa precinct.
"We've asked them to stop doing what they're doing," Saltsman said. "We think it's hurting us," because the negative messages run counter to efforts to run a positive campaign.
The Ohio-based nonprofit is run by Procter & Gamble executive Nathan Estruth, a longtime Huckabee supporter, and its effort is being overseen by Patrick Davis, who worked with Saltsman at the National Republican Senatorial Committee in 2001. The group has engaged in several state and federal campaigns, and in the past much of its financial backing came from Ohio billionaire and longtime conservative donor Carl H. Lindner Jr.
A spokeswoman for Lindner said that his money is not being used to help Huckabee and that he is a national co-chair of the Romney campaign this year. His son, Carl Lindner III, is backing Huckabee.
Fred Wertheimer, a campaign finance expert in Washington, said Common Sense Issues is so deeply engaged on Huckabee's behalf that it is edging very close to the limits of the law. There is some indication that political activity is all the group does, Wertheimer said. If that is the case, "it would appear to be violating both tax laws and campaign finance laws. This is a group that needs to be investigated by both the IRS and the FEC," he said.
Huckabee, a former Arkansas Baptist State Convention president, has also received organizational and financial support from a loose network of pastors, home-schoolers and Americans for Fair Taxation, a nonprofit that advocates replacing all federal taxes with a national sales tax. That group, which has spent more than $2.5 million on Huckabee's behalf, bought 400 tickets to Iowa's Republican straw poll in August and bused in supporters to help him finish a surprising second.
At the same time, Huckabee's rise in the polls and in fundraising has led to attacks by independent political groups. This week, the Americans for Legal Immigration PAC announced it would target Huckabee in Iowa, posting a video on its Web site attacking his position on immigration matters. And for the past two weeks, an arm of the anti-tax Club for Growth has launched television ads opposing Huckabee, criticizing his record on taxes in Arkansas.
On Wednesday, ClubforGrowth.net announced it had increased its advertising buy in Iowa to $550,000 over three weeks. The television spot "seeks to educate the public about Mike Huckabee's many tax increases and urges taxpayers to call the governor and challenge him on his tax policy," according to Pat Toomey, the group's president.
Hill, Huckabee's top fundraiser, said that while the commercials have been "frustrating," they have also "garnered a lot of support for the governor because he is under attack. That's given him a lot more publicity."
Hill says the campaign is trying to adapt quickly to the dramatic change in fundraising. For the bulk of this year, Huckabee's money was coming from an eclectic mix of people who included about three dozen pastors or priests, several "soldiers," two missionaries and a man who identified himself as "Middleweight Champion of the World."
His larger donations flowed from major shareholders in Home Bancshares Inc., a company that owns community banks in Arkansas. Huckabee owns between $50,000 and $100,000 in bank stock, according to financial disclosure forms; during his tenure as governor, he appointed one of the bank's principals to be the state's chief banking regulator. Another major group of donors came from Arkansas-based Wal-Mart and its affiliates.
Huckabee also continued to get financial help from Jennings Osborne, the Little Rock businessman known for his lavish Christmas light displays, who took heat for giving Huckabee, while he was governor, tens of thousands of dollars in gifts, including furniture, flowers, gift cards and clothing -- $53,000 worth in 1999 alone -- all of which the governor reported in ethics filings.
Now, Hill said, Huckabee's donations are coming from all over. Huckabee will report his fourth-quarter fundraising totals on Monday. Hill would not say how much the governor will have in the bank, but he did say that it would be correct to expect this quarter's tally to be substantially more than he raised over the rest of the year combined.