Aggressive Obama TV Spending Prompted Clinton's Loan

By Matthew Mosk
Washington Post Staff Writer
Friday, February 8, 2008

When Sen. Barack Obama began to bombard Super Tuesday states with television ads late last month, top advisers to Sen. Hillary Rodham Clinton quickly realized they could not afford to match the effort, and first broached with her the notion of dipping into her personal bank account.

"The campaign faced a strategic decision -- either attempt to match his TV . . . or lose," said a senior Clinton adviser, who spoke about the internal discussions on the condition of anonymity. "I would say given the result of Super Tuesday, it was the right decision."

The $5 million loan telegraphed for the first time that the Clinton campaign, which raised more than $100 million in 2007, had suddenly hit the financial skids. Clinton disclosed the loan on Wednesday.

What campaign aides have described as a "temporary cash-flow problem" left Clinton (N.Y.) unable to match Obama's advertising in upcoming primary states for much of this week. It also made some of Clinton's top donors, in key states such as Texas, uneasy.

Alonzo Cantu, a South Texas developer who has raised more than $1 million for Clinton's bid, said that while his region remains "Clinton country," he can hear Obama's footsteps in a state whose March 4 primary offers a huge delegate prize.

"They're buying media, they're calling state representatives, they're calling key senators," he said of the Obama campaign. "It's Clinton country, but right now it feels like it's hers to lose. She doesn't seem to be very active."

Cantu's concerns may be short-lived. Clinton campaign chairman Terence R. McAuliffe told donors on a conference call that the disclosure of the $5 million loan had unleashed a fresh flow of money. Yesterday afternoon, he said the campaign raised $6.4 million over the Internet "in the last 24 to 30 hours," and will start airing television ads in several critical states today. "It's going to allow us to do everything we need to do," McAuliffe said.

Evan Tracey, an analyst who monitors political advertising, confirmed that the Clinton team had placed new orders for ads in Maine, Nebraska and Washington state. But Obama has had commercials airing for several days in large television markets in the District, Maryland and Virginia, as well as Louisiana, Nebraska and Washington state, Tracey said. The senator from Illinois has also gotten a fundraising bounce out of the Feb. 5 contests, raising more than $7 million on Wednesday.

Michael Stratton, a Clinton fundraiser in Denver, said that while her loan may have given donors jitters about the financial health of the campaign, it also motivated them to reach back into their pockets.

"I think there was this assumption she's a money machine and will be able to raise whatever she needs," he said. "I think there are people who thought, 'Whoa. I guess we've got to rally here.' "

Clinton was able to draw on her joint bank account with her husband to make the loan. Last year, Hillary and Bill Clinton cashed out a blind trust with stock holdings valued at $5 million to $25 million, with the aim of avoiding conflicts of interest during the campaign, Clinton aides said.

More recently, the Wall Street Journal has reported that the former president will collect about $20 million in a deal to end his business relationship with the investment firm of billionaire friend Ron Burkle. Burkle is also a top fundraiser for Hillary Clinton's campaign.

CONTINUED     1        >

© 2008 The Washington Post Company