DNC Is Not Duplicating the Fundraising Success of Party's Candidates

By Chris Cillizza and Matthew Mosk
washingtonpost.com Staff Writer
Sunday, May 25, 2008

In a banner fundraising year for Democrats, the struggles of the Democratic National Committee to stockpile cash are frustrating party leaders and complicating efforts to define Sen. John McCain, the presumptive Republican presidential nominee.

Sens. Barack Obama (Ill.) and Hillary Rodham Clinton (N.Y.) are raising record sums for their presidential bids, and Democrats in the House and Senate enjoy huge cash advantages over their Republican counterparts. But as of the end of April, the DNC had collected $22.8 million this year and had $4.4 left to spend; the Republican National Committee finished April with $57.6 raised and $40.6 million in its accounts.

DNC supporters say several factors have contributed to the shortfall. Among them, they say, are that the protracted race between Obama and Clinton has soaked up funds that would otherwise go the party committee; DNC Chairman Howard Dean's commitment to his "50 State Strategy" has been costly; and that House and Senate Democrats have aggressively pitched donors on efforts to expand their congressional majorities.

Whatever the cause, there is broad agreement that the DNC's cash position will put significant pressure on the party's nominee -- probably Obama -- to raise vast sums quickly for the national committee to compete with Republicans during the late spring and summer.

Hassan Nemazee, a finance co-chair for the Clinton campaign and longtime DNC fundraiser, said that without a nominee, the party's ability to raise money is severely limited.

"People are not going to give until that candidate puts in place an apparatus that allows for people to feel as though there is an institutional memory in place, so they know someone will remember they gave the money," he said.

One longtime party strategist familiar with the inner workings of the DNC went further, acknowledging that although raising money is always "a difficult thing during a primary" for the DNC, "there is serious concern about their complete lack of fundraising success."

DNC spokeswoman Stacie Paxton acknowledged that the lengthy nomination battle has posed problems for the party's fundraising. "Our mission is to elect the president," she said. "Donors to both campaigns have understandably been focused on helping their candidate win the nomination, not giving to the DNC. . . . We're confident our fundraising will take off."

Already, she noted, the party has brokered agreements with Obama and Clinton to create joint fundraising committees that will allow the party to sock away money for the fall campaign. The DNC will also hold a major fundraiser featuring Al Gore and organized by top fundraisers for both candidates at the end of this month in Manhattan.

The extended nomination fight appears certain to carry on at least until the end of the primary season, in early June, and has put the DNC in the unexpected position of carrying the fight to McCain (Ariz.) largely on its own. A high-ranking DNC official who spoke with The Washington Post on the condition he not be identified because of the sensitivity of the situation said he worries that the party's impaired financial condition is leaving it powerless to help define McCain.

"Both campaigns have expressed a desire for us to attack McCain," the official said. "We made a small media buy. But we simply cannot sustain the kind of advertising we need right now. We can't even sustain even a national cable buy for a month."

Financial records reveal that the DNC has spent $638,000 against McCain this year, the vast majority of which -- $600,000 -- was spent on two television ads that ran on national cable networks. The first questioned McCain's assertion that Americans are "better off" than they were eight years ago; the second hit him on the idea that U.S. troops could be in Iraq for 100 years or more.

Neither ad is currently being shown, and the DNC's inability to stay on the air has been complicated by the recent collapse of Progressive Media USA. That organization, affiliated with a number of high-profile Democratic operatives, was expected to underwrite advertisements through the summer with the theme "McSame," aimed at defining McCain as a clone of President Bush.

A top DNC official said the real financial problems at the committee trace not to fundraising but to spending under Dean's regime.

From Jan. 1, 2001, when Terence R. McAuliffe took over the committee, through March 31, 2004, the DNC raised approximately $127 million in funds that could be spent directly on campaign activities. Between Jan. 1, 2005, and March 2008, the DNC raised $190 million. But the DNC had $27.5 million in the bank at this time four years ago, as opposed to $4.4 million now.

Paxton said the increased spending results from investments that the DNC has made in technology -- in particular, building an array of lists and collecting detailed demographic information about voters that officials hope will give the nominee a significant edge in the fall campaign. About $10 million was spent to develop a national voter file, an effort officials believe has been successful.

"These things cost money," Paxton said. "The advice we got from previous presidential campaigns is that we needed to invest in these things early. We could have sat on the cash, but I don't think that would have been a good investment."

The biggest point of contention between supporters and detractors of Dean's leadership of the DNC is the "50 State Strategy," the centerpiece of his chairmanship. The strategy is designed to make the party competitive throughout the country by, among other things, building a party presence in every state, including those that have not traditionally voted Democratic.

The program costs about $9 million a year, and some within the party think it is wasteful to spend on a party infrastructure in states in which Democrats are not competitive at the presidential level.

Dean's defenders argue that the program paid dividends in 2006, when Democrats picked traditionally Republican House seats in states such as Kansas. The program has shown more results this cycle, they contend, with special-election victories on GOP turf in Louisiana and Mississippi. The DNC had six staff members on the ground in advance of the special election in Mississippi's 1st District, where a Democrat won a seat Bush carried with 62 percent of the vote in 2004.

"Howard Dean is trying to walk the tightrope between supporting the 50 State Strategy and helping to win the presidency," said Steve McMahon, a Democratic consultant who worked for Dean in his 2004 presidential campaign. "And if anyone wonders whether the 50 State Strategy is worthwhile, they should simply ask newly elected Congressman Travis Childers of Mississippi."

The upcoming Manhattan fundraiser, coupled with other recent gatherings, suggest that the DNC is moving to remedy the situation. Alan Solomont, a Boston fundraiser and Obama supporter, said he expects that the presence of a presumptive nominee will help the party quickly close the gap with Republicans.

But the DNC has ground to make up. With McCain firmly in place as the presumptive nominee, his advisers have formed a "Victory Fund, which allows major donors to write a check for as much as $70,000. That total includes $28,500 for the party committee, $2,300 for the candidate and $10,000 for each of four state party committees.

In so doing, the RNC raised $7 million for McCain's presidential bid at an event in New York this month.

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