- The Washington Times - Sunday, February 24, 2008

ANALYSIS/OPINION:

A review of Hillary Clinton’s fund-raising operation since she began her presidential campaign in January 2007 reveals that when she personally lent her campaign $5 million on Jan. 28, 2008, she was far more desperate for the cash infusion than previously understood. Moreover, based on her recent filing with the Federal Election Commission (FEC) for the month of January, the cash available to her for the primary campaign as of the end of last month was far less than her reported cash-on-hand position indicated. The reason for both assertions relates to the disproportionate amount of money Mrs. Clinton has raised for the general election.

On Jan. 31, five days before Democrats were contesting 21 primaries and caucuses on Tsunami Tuesday, Mrs. Clinton’s campaign had $29.2 million in cash on hand. Had she not lent her campaign $5 million three days earlier, her end-of-the-month cash position would have been $24.2 million. But that figure is highly misleading. In fact, it overstates the cash available to the Clinton campaign for primaries and caucuses by more than $21 million.

In anticipation of opting out of public funding for the general election, Mrs. Clinton, along with several other candidates, including Barack Obama and Republicans John McCain, Mitt Romney and Rudy Giuliani, has been simultaneously raising funds for both the primaries and the general election. Candidates who agree to accept public funding for the general election (an estimated $85 million would be given to each major party nominee after their conventions) cannot accept private donations from individuals or political action committees (PAC) for the general-election campaign.

Although Mrs. Clinton had raised $119.9 million from individual donors through January, more than $21 million of that total had been earmarked for the general election, according to a review by The Washington Times editorial page of Mrs. Clinton’s FEC quarterly filings from last year and her January FEC report. That $21 million cannot be spent during the primaries; in fact, it must be held in escrow. If a candidate does not receive the nomination or if the nominee changes his or her mind and decides to accept public funding for the general election, then the individual and PAC contributions earmarked for the general election must be returned to the donors. General-election donations, like primary contributions, are limited to $2,300 per person and $5,000 per PAC.

Thus, had Mrs. Clinton not given her campaign the late-month $5 million loan, her Jan. 31 cash-on-hand position for the primaries would have been about $3.2 million. Deduct the $2.6 million in debts that the Clinton campaign owed, and her unencumbered cash position would have been about $600,000 less than a week before Tsunami Tuesday. While her loan helped her campaign’s cash position, it also added to its debts, so the campaign’s Jan. 31 unencumbered cash position was still $600,000. But the loan did give her the necessary liquidity to pay for last-minute TV ads for Tsunami Tuesday.

By contrast, only $6 million of the $138 million Mr. Obama has raised from individuals through January was earmarked for the general election. And his debts on Jan. 31 totaled only $1.1 million. Thus, his $24.9 million cash-on-hand position on Jan. 31 represented nearly $18 million in unencumbered funds for the primaries.

In January, Mr. Obama raised a stunning $36.1 million in contributions from individuals, more than 2.5 times the $13.8 million that Mrs. Clinton raised from individuals last month. To fully appreciate Mr. Obama’s feat, let’s put his January windfall in perspective. Recall that Howard Dean emerged as the frontrunner for the Democratic presidential nomination at the end of 2003 in large part because he had raised $40.9 million from individuals during the entire year. In the single month of January, Mr. Obama raised 88 percent of Mr. Dean’s 2003 total. And, by all indications, he did so without breaking a sweat.

Moreover, if a stiff like John Kerry, who managed to raise only $19.4 million from individual contributions throughout 2003, was then able to raise a mind-boggling $180 million during the five months (March-July in 2004) after he sewed up the Democratic nomination, imagine how many hundreds of millions of dollars Mr. Obama will be able to raise before the Democratic National Convention in late August if he knocks Mrs. Clinton out in Ohio and Texas on March 4. No wonder he is running from his commitment to accept public funding for the general election if the Republican nominee agreed to do so.

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