The YearlyKos convention brought two (not just one) campaign missteps for Senator Hillary Clinton’s presidential aspirations, and both were driven by her campaign’s fundraising problems.
Everyone knows about this one:
Clinton: “A lot of those lobbyists whether you like it or not represent real Americans. Nurses, social workers, yes they represent corporations that employ a lot of people.”
But what about the first?
Clinton’s original plan to blow-off the YKos breakout session * was booed on Thursday night there and, to her credit, she wisely fixed the error and rescheduled to do a Saturday a.m. session.
But that first misstep, getting off on the wrong foot there, was caused by the same problem that wrought the second one. Although YKos was scheduled for this date a long time ago, the Clinton campaign chose to book a six event fundraising tour of the Hamptons on Long Island, New York, instead.
More on the nature of those events in the Hamptons, and Clinton’s serious fundraising problems, with supporting links, at the jump…
John Edwards' call yesterday for Clinton to renounce DC lobbyist contributions was about more than the popularity of his position. He zeroed in on one of Clinton's biggest weaknesses and hammered at it (with great skill and poise, I might add).
The Clinton campaign has financial problems that are evident from a careful reading of publicly available FEC filing documents.
Let’s do the math together.
Rewind three weeks to the Federal Elections Commission (FEC) July 15 filing deadline and the revelation that Obama had out-raised Clinton in the second quarter (Q2) of 2007, both in the amount of money and especially in the number of donors that gave.
Marc Ambinder, after poring over the data, noted that Clinton’s “burn rate” of 73 percent compounds her problems in having enough cash on hand for next year’s primaries:
The most interesting figure available to us today, as we pour over the 2nd quarter financial disbursements, is the average burn rate, which is calculated by adding the money spent plus debt, and dividing that by the amount of money raised for the primary elections.
In Obama's case, that's $16M spent + 0.92M debt divided by $32M raised -- or 53%.
Even though Obama spent more than Clinton -- either a little if you count debt or a lot -- he managed to keep half of what we took in. His fundraising will simmer down a bit in the third quarter, but it's fairly easy to imagine that he'll gave $25M or so in the bank come January, which will give him more than enough money to blanket the early (and later) primary states with those biographical ads that Obama's team loves to make.
Clinton burned through 73 cents out of every primary dollar she raised.
Also, the Clinton campaign artificially lowered its “burn rate” by not paying more than three million in campaign bills, including $421,871 owed to Mark Penn’s polling and consulting firm (a candidate asking the staff to defer paychecks until later is a classic maneuver to manipulate the interpretation of quarterly FEC filings):
Clinton reported $3 million in debts, including $421,874 owed to her consulting firm, Penn, Schoen & Berland Associates Inc., and $20,309 to the Palmer House Hilton in Chicago for an event. Obama owed $922,848, including $103,654 for research.
Obama spent $16 million in the second quarter compared with $12.8 million for Clinton. Still, he's raising more on the Internet, taking in at least $10.3 million online in the second quarter alone and building a bigger base of financial supporters than Clinton.
Obama raised $33.1 million from April through the end of June. At least $31 million of that was for the primaries. Clinton raised $27 million, with $21.5 million for the primaries. Candidates can only spend the general election money if they win the nomination and forgo federal funding.
If you’ve managed campaigns, you know how to read the data. And opensecrets.org gives us some key data to work with:
According to her FEC filings, Clinton has raised 71 percent of her primary money from 10,334 “max out” donors that gave the maximum allowed by law of $2,300: That means that the donors of more than $23 million ($23,768,200 to be exact), plus more than $11 million of donations from 4,877 of her “max out” donors that gave money that can only be used after the Democratic National Convention if she is the general election nominee, plus the $10 million signed over from her Senate campaign committee comes from sources that can never give to her primary campaign again.
The total: $44 million of her $63 million raised so far comes from sources that cannot give again to her primary campaign.
Obama raised 44 percent of his primary money from 9,855 “max out” donors, more than $22 million ($22,666,500), plus another $2.5 million in donations to his general election campaign (for a total of about $25 million) of his almost $59 million raised that cannot give again.
Math time:
Obama has raised more than $34 million from donors that can legally give more.
Clinton has raised just $19 million from donors that can legally give again.
Got it? Obama has raised twice as much from people that can give again as Clinton has raised from them. That means double the amount of “love” coming his way from committed donors for the rest of the campaign.
Only Obama has publicly released his full number of donors: more than 258,000, with 110,000 of them donating via the Internet.
Clinton hasn’t released her total number of donors (but in the first quarter, her campaign publicly estimated her donors to number about 60,000, compared to 110,000 back then for Obama).
The FEC requires that each campaign report only the names of donors of $200 or more. Obama had 37,616 such donors to Clinton’s 25,343.
Subtracting the max-out donors from those: Obama had 27,761 donors of between $200 and less than the maximum whereas Clinton had just 15,009 donors between $200 and the max.
Donors of less than $200 contributed 27 percent of Obama’s donations ($15.9 million) from people unlikely to “max out” and who will likely give again and again throughout the campaign), whereas donors of less than $200 contributed only 8 percent of Clinton’s total (contributing $5 million).
So, Clinton is left with:
15,009 donors above $200 that she can turn to again plus an unknown number of smaller donors that have given $5 million she can tap again.
While Obama has:
27,761 donors above $200 that he can turn to again plus more than 200,000 smaller donors that gave almost $16 million that he can tap again.
After looking at these hard numbers, is it any wonder why Clinton needs every lobbyist and PAC dollar she can get her hands on to be competitive with Obama in the primaries?
But, oh, of course, as she said, she’ll never sell her policy to her big donors, not even to the host of the Saturday night cocktail and dinner party (click the link to read the precious invitation) that she had to leave YKos immediately after the debate to attend, Ron Perelman, “an American billionaire investor who made his fortune buying beleaguered corporations and re-selling them later for enormous profits. Once the richest man in America, he is now tied for 40th place with an estimated wealth of USD$7 billion. He has invested in the grocery, cigar, licorice, makeup, car, photography, television, camping, security, lottery, jewelry, banks, and comic book industries.”
Democrat and former Texas Railroad Commissioner Jim Hightower has called Perelman “a hostile takeover artist,” regarding his role in the Savings and Loan scandals: “These people need taxpayers’ dollars like Oscar Mayer needs more baloney, but here they come, grabbing for your wallet.”
Perelman has also donated to the political committees of Rudy Giuliani, John McCain, Joe Biden and Chris Dodd, among other members of Congress and politicians (he’s donated $104,100 to Republican candidates, $285,670 to Democrats, and $59,000 to “special interest” PACs and party organizations over the past 18 years, and his donations are all over the ideological map.
But of course, he expects no special favors from any of them, and certainly not from the next president of the United States.
It is the weakness of Clinton’s campaign fundraising among small donors that forces her to make these errors – like the two missteps at YKos – precisely because of her absolute dependence on the super rich to be a front-running presidential candidate.
Correspondingly, it is the strength of those campaigns that get most of their funds from small donors that give those candidates the freedom from the power brokers that we so desperately need our leaders to have.
Clinton's absolute dependence on "max out" ($2,300) donors will straight-jacket her not only in a possible general election campaign, but, if it gets to that, in a possible presidency.
Clinton's insistence on Saturday that she'd never be beholden to one lobbyist or donor obscures an even bigger problem: What happens when the United States president is beholden to an entire economic upper class?
Update: *By speaking of "the original plan to blow off the breakout session" I am not referring to the Thursday night claims that Clinton originally confirmed for the event. I accept the explanation by YKos organizers that she never did and I've never stated, here or elsewhere, any claim to the contrary. As I state, it was her "original plan" all along to blow off those events in order to instead dine with $4600 donors. And I believe folks would have been just as upset about that "original plan" with or without the additional and separate flap over whether she had ever agreed to it at all.