Reince Priebus, just over a month into his term as Republican National Committee chairman, is cutting costs and cultivating the party’s donor base in an aggressive bid to fix the national party’s tattered balance sheet.
The former Wisconsin Republican Party chairman has less than 20 months to whip the GOP’s most important money-raising instrument into shape to ensure his party’s candidates can compete with President Obama and congressional Democrats in the 2012 elections.
The troubled tenure of predecessor Michael S. Steele left the RNC deeply in debt and with what was once a battalion of big donors reduced to platoon strength. Mr. Priebus faces a challenge of the magnitude not encountered by an RNC chairman since George H.W. Bush took over the national party headquarters at the height of the Watergate crisis.
“I’m spending six hours a day on the phone to donors,” Mr. Priebus told The Washington Times.
Unlike Mr. Steele, who managed to pick public fights with top conservatives and took months to recruit a finance chairman, Mr. Priebus, 38, has avoided the spotlight and has recruited GOP fundraiser Ron Weiser of Michigan, a former ambassador to Slovakia, to be co-chairman of an internal financial oversight panel.
“We are back on track,” said Mel Sembler, RNC finance chairman when Mr. Bush was elected president in 1988.
In contrast to Mr. Steele’s often difficult relations with the party’s top donors, Mr. Priebus radiates a gung-ho enthusiasm for pitching potential givers.
“I like talking with our donors,” he said.
Mr. Priebus and Mr. Sembler acknowledge that the RNC faces a long, steep comeback. The team has pared staff and frozen contract expenditures in an attempt to restore confidence within the party.
After defeating Mr. Steele and three other rivals in the mid-January vote for chairman, Mr. Priebus immediately put to work his party’s top fundraisers, who have raised enough to knock off $1 million from the RNC’s more than $23 million debt to banks and suppliers.
The Democratic National Committee reported to the Federal Election Commission this month a $16.8 million debt to banks and suppliers in the aftermath of an election cycle that forced the DNC to spend to the hilt in a bid to limit the scope of the electoral disaster in the midterm elections. But the DNC is not burdened by questionable fiscal management that shadows the RNC.
“The RNC owed banks $15 million and owed vendors $8 million, and we’ve paid vendors back $1 million of that,” Mr. Sembler said.
Mr. Priebus’ RNC now must pay off that huge remaining debt while attempting to raise at least as much as the $427 million that Mike Duncan raised as RNC chairman in the 2007-08 presidential campaign cycle.
It won’t be easy.
For one thing, GOP officials say, Mr. Priebus’ management team keeps discovering more hidden debt in the form of unpaid fees owed to banks and other long past-due bills amid the financial disarray left by Mr. Steele and his now-departed team of top aides.
“When Chairman Priebus came into office, our relationships with major donors were virtually nonexistent, and we were spending approximately 60 cents for every dollar raised,” said RNC Chief of Staff Jeff Larson, who is credited with helping right the finances for the 2008 GOP convention in Minnesota.
“In roughly six weeks, we cut overhead and reduced staff costs by a third,” said Mr. Larson, who said the party headquarters held a “national call day” for top donors that raised $2.5 million in five hours. GOP congressional leaders, notably wary of Mr. Priebus’ predecessor, praised the effort.
While acknowledging some administrative lapses, Mr. Steele has staunchly defended his record as RNC chairman, citing his outreach to attract new voters to the party and pointing to major Republican electoral gains during his two-year tenure, including breakthrough wins on Capitol Hill and in statehouses across the country in November.
But the troubles of the major-donor program under Mr. Steele were particularly disabling because the political parties spend far less money to raise each dollar from a rich giver than they must to solicit mail or phone-bank donations of less than $200 from small donors.
“One reason we’re in such a hole is that under Steele in the last two years we’ve had no major-donor program; it’s gone,” said Mr. Sembler.
He said the RNC is rebuilding that program with the help from a string of past RNC finance officials and business leaders, such as Sam Fox of St. Louis, Fred Malek and Bob Pence of Virginia, Ted Welch of Tennessee, Al Hoffman of Florida, Lew Eisenberg of New York, Larry Mizel of Colorado and Dwight Schar of Palm Beach, Fla.
“We’re beginning to hear back from donors who sat on the sideline in the previous cycle,” Mr. Larson said.
To reassure donors, Mr. Priebus has appointed Mr. Weiser to co-chair a new financial-integrity panel. Made up of former RNC chairmen — including Jim Nicholson and Mike Duncan, as well as RNC finance chairmen and big-time “bundlers” of donations — the panel will have a major say in how the RNC raises and spends money.
The national committees of both parties have rigid restrictions on donations, but the RNC starts with a huge debt that the rival DNC does not have.
Like the Democratic National Committee, the RNC can raise no more than $30,800 from an individual donor, while independent groups that support GOP candidates and policies — such as American Crossroads and Crossroads GPS — may accept unlimited sums from an individual, thus lowering the amount spent to raise each dollar in donations.
But only the RNC and the Democratic National Committee — not independent groups — may spend the money on voter-turnout programs in presidential elections, under federal campaign-finance laws. Only the RNC can coordinate directly with federal candidates for get-out-the-vote activities.
Under Mr. Steele, the RNC spent 70 cents to raise each dollar in donations, while American Crossroads and Crossroads GPS spent 4 cents to raise each dollar in donations.