Even in Victory, Clinton Team Is Battling Itself

"The greatest challenge going into the campaign," a senior campaign aide said with a sigh, "was the management of Bill Clinton."

That seemed evident in South Carolina. The former president had grown frustrated that the campaign had not aggressively challenged Obama and so took it upon himself to go after the senator from Illinois, but in the process his comments unwittingly triggered an uproar that many Clinton advisers think the Obama campaign fanned by -- in their view -- twisting his words to paint him unfairly as a racist.

The Clinton camp ended up spending nearly $7 million in South Carolina, but Obama won in a landslide. On Jan. 26, the day of the election, Penn sent an e-mail to the senior campaign staff comparing Obama's victory there to Jesse L. Jackson's two wins in the 1980s. Bill Clinton made the same comparison to reporters that day, generating even more anger among African Americans who perceived it as a way of marginalizing Obama by portraying him as a black candidate who appeals only to black voters.

As Clinton strategists woke up the next morning, they realized that the African American constituency, a backbone of the Democratic coalition, was permanently lost to her. Only then were some of his closest former aides, such as Sosnik, former White House lawyer Cheryl D. Mills and fundraiser Terence R. McAuliffe, tapped to talk with him about reining in his rhetoric, and a daily conference call was established to try to enforce it.

"You had your Hillary people, and you had your Bill people," said the top campaign official. "There were some crossovers, but very few. The Hillary people could never tell him to cut the [crap] because they were Hillary people -- and vice versa."

'This Can't Be Happening'

As one of his generation's smartest political strategists, Bill Clinton understood without anyone telling him that he had damaged the campaign, distracting the public at a time when his wife should have been reintroducing herself with the New Hampshire and Nevada victories at her back. If he did not, he got a powerful wake-up call.

During South Carolina, Clinton friends in Massachusetts such as longtime operative John Sasso and former Kennedy family aides began blitzing the Arlington headquarters with warnings that Sen. Edward M. Kennedy (Mass.) was planning to endorse Obama. But the camp was slow to react, they complained. "People in Boston were apoplectic," a Clinton fundraiser said. "I got the sense it never got high enough up in the organization. And then they realized, 'Oh, my God, this can't be happening.' "

Once it fully dawned on the campaign that the head of the nation's most storied Democratic family planned to pass the torch to Obama, both Hillary and Bill Clinton called to try to change his mind. Kennedy, who according to sources close to him was offended by remarks that seemed to diminish his brother John F. Kennedy's role in civil rights, gave Bill Clinton an earful about his rhetoric.

A Clinton aide called it "a very testy conversation." Another said the former president adamantly denied making offensive remarks. "There's nothing I said that was racial," the aide quoted Clinton as saying. But it was too late, and Kennedy's endorsement two days after South Carolina was a heavy blow.

Hillary Clinton had little time to turn things around before Feb. 5, Super Tuesday, and a campaign that had raised more than $100 million in 2007 suddenly found itself short of money. Ickes and Solis Doyle went to the Clintons for a loan to pay for television ads. The candidate was exasperated. "God, I've raised all this money," she exclaimed, according to one person informed about the conversation. "What have you guys done with it?"

The Clintons lent the campaign $5 million, and Solis Doyle and Henry focused resources on a dozen battleground states, mainly large ones such as California, New York, New Jersey and Massachusetts, as well as Arizona and New Mexico, with large Hispanic populations. But they essentially did not compete in smaller states holding caucuses. Clinton, feeling burned by Iowa, had become allergic to caucuses, deeming them unfair.

Ickes and political director Guy Cecil argued that such states were important because even if she lost, she would pick up delegates with a strong showing. That would soon become clear. Clinton racked up big wins in California, New Jersey and even Kennedy's Massachusetts. But she lost the caucus states, and because of the party's proportional rules, it cost her.