In a major strategic decision, Republican presidential candidate John B. Connally has decided not to accept federal matching funds for his campaign, sources in his organization confirmed last night.
The decision means that Connally will not be bound by the federal limits on statewide spending in the 1980 campaign and thus will be able to outspend his competitors, who are expected to take the federal matching money.
The action was taken late last week at a meeting in Chicago that included Connaly; Eddie Mahe, his campaign director; Jere Thompson, campaign fiance chairman, and other. Connally plans to announce his decision at a news conference here this morning.
The decision appeared to be part of an overall strategy to jolt Connally's campaign forward and apply pressure on Ronald Reagan, the acknowledged frontrunner for the Republican nomination whom Connally believes is his main competitor.
The idea not to take federal matching money has been under consideration for some time in the Connally camp. The former Texas governor has raised more than$8 million from private contributors, considerably more than any other candidate.
Connally has said recently that it will be difficult for any challenger to overtake Reagan if all are forced to spend the same amount of money.
At the same time, his campaign has been spending money rapidly, and there is speculation that he would have trouble staying within the spending ceiling in such states as New Hampshire and Florida.
Under federal election laws, the spending ceiling in New Hampshire is about $264,000 and in Florida about $1.3 million.
Connally reportedly spent more than $300,000 in Florida in an effort to win the nonbinding Republican straw poll last month. He finished a poor second to Reagan, and the defeat has jarred his campaign staff and strategy.
He is shooting to defeat Reagan in one of the four southern primaries in the second week of March. But he has admitted that he is far behind now in most of the early primary states and must move quickly to make up that ground.
He has stepped up campaign appearances in Iowa and New Hampshire in an effort to prevent himself from falling further behind Reagan and George Bush, who is considered well-organized in both states.
Connally is also counting on a hefty television advertising campaign early in 1980 but that, too, will require him to spend large amounts of money.
The decision to forgo the matching funds could hurt him later in the campaign, however. Under regulations proposed by the Federal Election Commission, any candidate who "knowingly, willingly and substantially" violates the federal spending limits would be ineligible for federal matching funds later.
In othr words, if Connally refuses federal money in the first three months of 1980 and then goes over the money limits in several early primary states, he could not later ask the FECfor matching funds.
The decision to forgo the federal money could cost him several million dollars.
The FEC sent the proposed regulations to Congress earlier in the fall. They will take effect after 30 legislative days if Congress does not block them. So far, 18 legislative days have elapsed according to an FEC official.
The action by Connally on financing came as his campaign announced that he had written the Des Moines Register urging the newspaper to make further efforts to get Reagan to participate in the Republican debate scheduled for Jan. 5.
Regan has said he will not debate his GOP opponents.
In the same letter, Connally said he would purchase 30 minutes of television time in Iowa on Jan. 8 for a call-in show that he said would give Iowans a chance to question him further. He invited Reagan to join him on that show.