I'll try to go in somewhat chronological order here (although that's a little difficult later).
Obama outraised Clinton early in 2007:
One of the myths that most ordinary Americans and even some political activists have given credence to is that Clinton held a lead in financing throughout 2007, and Obama only began to outraise her after winning Iowa. However, he actually began outraising her early in 2007, as this article from one year ago shows. Of course, no one paid much attention when Jesse Jackson (D-IL) said in April of last year,
This is a long road and a long process to the White House, but make no doubt about it, Barack Obama is driving the fastest car.
As far as the MSM was concerned, the Clintons were still the big fundraisers in the Democratic Party. In fact, two days before ABC News told the public that Obama had outraised Hillary, the New York Times headline said, "Clinton Campaign Shows Fundraising Edge." At every juncture of this primary race, the MSM dismissed Obama and regarded Clinton as inevitable, even after he won Iowa and South Carolina and right up until he won more delegates on Super Tuesday.
What I found most interesting was that the Clinton campaign did not take him seriously until right before Super Tuesday when the Clintons loaned Hillary's campaign $5 million. While the Obama campaign was spending money in very calculating ways aimed at winning votes, the Clinton campaign was spending huge sums of their money on consultants (or as Dean calls them, professional election losers), and things like snow shovels, and catering for events where no food was allowed. Clinton spent $800,000 in South Carolina to turn out black voters only to have her husband turn them out for Obama.
2007 Clinton Donations from Unlikely Sources:
In fact, last April, the same month that Obama was making headlines for overtaking Clinton's fundraising numbers, Clinton was offering to retire $400,000 of Governor Vilsack's campaign debt. They Clintons were so confident, they were just giving money away. According to the Los Angeles Times:
Dishwashers, waiters and others whose jobs and dilapidated home addresses seem to make them unpromising targets for political fundraisers are pouring $1,000 and $2,000 contributions into Clinton's campaign treasury.
...snip...
At least one reported donor denies making a contribution. Another admitted to lacking the legal-resident status required for giving campaign money.
...snip...
One-third of those donors could not be found using property, telephone or business records. Most have not registered to vote
...snip...
And several dozen were described in financial reports as holding jobs -- including dishwasher, server or chef -- that would normally make it difficult to donate amounts ranging from $500 to the legal maximum of $2,300 per election.
Maybe it was all of the busboys donating to the Clinton campaign that made her so sure of her inevitability. Should we have seen this as the first sign of financial trouble? At the time, most of us saw it as the Clintons' ability to raise the necessary funds through any means necessary. I'm sure some people saw it as a warning sign that her most committed donors were maxed out, but I don't remember having those thoughts at the time.
Nevertheless, the Clinton campaign did raise more money in the third and fourth quarters of 2007 and the 2007 year overall.
Clinton's First Cash Crunch Started in Early January 2008:
I've discussed this article with fellow political activists today, and each one was under the impression that Clinton's financial crisis began a few days before Super Tuesday. The first article I found, though, that talked about the Clinton campaign having financial difficulty was a prominent article in Time Magazine on January 6. So, why did so many well-informed people believe her financial problems weren't real until she loaned herself $5 million? Maybe it was all of the talk of inevitability. Maybe it was the MSM's refusal to believe that Obama was a viable candidate. Maybe my friends aren't as well-informed as I thought?
I think we missed it because of the tears in New Hampshire. Or maybe we just forgot. I knew Obama raised more than Hillary in January, but when I look back now, I was just as surprised today as I was then. Obama raised $35 million in January, and Clinton raised $13.5 million. That's less than half.
Even so, if Clinton outraised Obama in 2007, then her cash crunch shouldn't have come until the end of January (or the middle of January at the worst). According to Time,
Clinton spent lavishly on what turned out to be a debacle in Iowa.
According to the New York Times:
Nearly $100,000 went for party platters and groceries before the Iowa caucuses, even though the partying mood evaporated quickly. Rooms at the Bellagio luxury hotel in Las Vegas consumed more than $25,000; the Four Seasons, another $5,000. And top consultants collected about $5 million in January, a month of crucial expenses and tough fund-raising.
Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.
Finally, just days before Super Tuesday, the financial crisis forced the Clintons to loan Hillary's campaign $5 million. After raising $100 million in 2007 (a record amount), this was earth-shattering. Where did all of this money go? (see above reports of lavish spending) This was such a big deal that they kept it under wraps until after Super Tuesday.
Of course, Obama answered Hillary's $5 million loan by raising $7 million in 48 hours online from ordinary joes. Nearly everyone took note that Bill Clinton had recently said this:
You couldn’t stop me from spending all the money I’ve saved over the last five years on Hillary’s campaign if I wanted to, even though it would clearly violate the spirit of campaign finance reform.
Of course, I can't let that go without pointing out that considering the Clintons made $109 million in the seven years after leaving the white house, I'd say $5 million to get back into the white house is a good investment!
Of course, given the amount of money the Clintons have, I find it unsettling that she elected to let her staffers go without pay rather than loaning the campaign more money so that she could pay them. While some of the consultants are paid very highly, most campaign staffers are paid peanuts and really need their paychecks. I guess Clinton is committed, but not that committed.
More on Consultants (the Professional Election Losers):
According to an article at Salon.com:
Clinton paid Penn a total of $8.9 million for direct mail, according to CQ MoneyLine. She paid Penn for polling, at $2.8 million. She even paid Penn $160,000 for consulting about polling, which presumably involved his telling her what an excellent pollster she'd hired. By Feb. 29, she also owed Penn's firm another $2.5 million for "consulting/polling," federal records show. March expenditures won't be revealed for another few weeks -- but through February, Clinton spent nearly 9 percent of the $138 million she's burned through in the race on Penn's firm alone.
...snip...
Besides Penn, there's Clinton's communications director, Howard Wolfson. He appears to have set up a consulting firm for the sole purpose of working for Clinton, called Gotham Acme, which has taken in more than $700,000 since the race started. No other client has paid the firm a cent since 2003.
Compare those whopping millions paid by Clinton's campaign to Penn to Obama's campaign, which paid only $1.2 million to its top consultant (Axelrod), $120k/year for Plouffe, and $635,000 to Obama's chief pollster Benenson.
Then, the Credit Card Charges:
Kathy Callahan, a Clinton finance advisor resigned after her debit card was charged for amounts not authorized. Callahan said that the unauthorized charged caused her to go over the legal limit for donations, and caused her to have $400 in overdraft fees. She had so much trouble getting the campaign to refund the unauthorized charges that she ended up filing a police report and resigning from the campaign. She also says that others are having similar problems.
In fact, these types of credit card mishaps have been a problem for the Clinton campaign since early last year:
Mrs. Clinton’s big numbers might require an asterisk.
Her campaign has since had to subtract hundreds of thousands of dollars from its first-quarter total because of a variety of problems, including donors whose credit cards were mistakenly charged twice, contributions exceeding the legal limit and checks that bounced.
...snip...
Elmar Vomfell, who owns a small business in Kentucky, after he agreed to make a $4,600 contribution, the legal maximum. When he checked later, he found that $9,200 had been charged to his card on March 31. The Clinton campaign issued him a $4,600 refund a month later — after both contributions had been counted in the first-quarter total.
Even one of our own Kossaks was affected by these problems. EmperorHadrian had trouble getting the Clinton campaign to cancel a recurring charge after repeated requests.
In fact, there are quite a few of these stories. Enough to add up. Hillary Clinton's campaign has refunded three times as many donations as Barack Obama's campaign has refunded. To the tune of $2.8 million.
Time to Pay the Bills
First the stories of unpaid bills trickled out. A small cleaning company in Iowa complained to the media that the Clinton campaign wasn't paying them and had stopped taking their calls. A New Hampshire landlord had to resort to contacting the media to get paid (he was so mad at the Clinton campaign about the way he was treated that he donated the check to Obama when he finally got paid). Hotel Ottumwa also contacted the media and finally got paid after it hit the news:
Mr. Semetis, the deli owner, said he was a longtime Republican who was supportive of Mrs. Clinton, because he believed Mr. Obama was too inexperienced and Senator John McCain, the presumptive Republican nominee, would be too much like President Bush.
Mr. Semetis’s business closed for several weeks after the Sept. 11, 2001, terrorist attacks, forcing him to downsize, and Mr. Semetis said he was still trying to regain his footing. "This is not politically motivated, believe me," he said. "This is financially motivated."
This DailyKos diary has links to some other stories as well. leevank wrote two diaries (here and here) about who some of these bills are owed to and how long some of them went unpaid.
Some vendors who are owed money by the Clinton campaign have grown so frustrated that they've begun warning other vendors:
A pair of Ohio companies owed more than $25,000 by Clinton for staging events for her campaign are warning others in the tight-knit event production community — and anyone else who will listen — to get their cash upfront when doing business with her. Her campaign, say representatives of the two companies, has stopped returning phone calls and e-mails seeking payment of outstanding invoices. One even got no response from a certified letter.
A New York caterer went even further and took the Clinton campaign to small claims court over the bill they owed him.
The Clinton campaign has amassed a mountainous debt of $8.7 million (not including the $5 million owed to herself), compared to only $650k in current bills owed by the Obama campaign. Clinton owes about $3.7 million to her top three consultants, but most of thse bills are owed to small businesses, and many of these bills go back to December. Even the health insurance for the staffers went unpaid for 90 days, but the Clinton campaign says the coverage never lapsed. (I wonder if it occurred to the Clintons that her campaign isn't paying the bills for healthcare while she's campaigning for a mandate on individuals to pay health insurance.)
Funds Available for Primary vs. General Election?
I've seen some various figures thrown around regarding this, and several of the numbers don't match up. JedReport seems to have the best handle on this topic:
Clinton ended February with about $33 million cash on hand. About $21 million of that was restricted for the general.
There have been rumors floating, which seem to have been posted on every blog from here to the blue yonder, that Clinton may have only raised $7 million last month that can be used for the primary election. Again, JedReport clears this up for us. He points out that people who are coming to this conclusion are looking at the wrong number and should be looking at February's contribution total:
In February, Clinton raised about $35 million. About $34 million of that was designated for primary usage -- just $1.2 was restricted for the general.
Also, according to Talking Points Memo, Wolfson says that nearly the entire $20 million raised in March was for the primary, which does seem to coincide with the fundraising figures for February.
However, Andrew Romano at Newsweek points out:
if Clinton spent at anything like February's rate--$1 million a day--she'd be living hand-to-mouth," and that even slower spending makes it "hard to imagine that she's doing much better than breaking even" once outstanding debts (between $8 and $14 million) are factored in
CONCLUSIONS?
If you read this far, you're probably wondering what conclusions I've drawn from all of this. I'd rather let you be the judge, but I will share with you the reason that I decided to delve into this topic.
My husband and I are small business owners. We know what it's like to invest everything you own to try to create the American dream. For many small business owners, one client not paying their bill can mean the difference between putting food on the table or going hungry, paying for health care or having your policy lapse, keeping your home or watching the bank auction it off, keeping your car or watching the repo man drive it away.
I am outraged that Clinton is financing her campaign on the backs of little people who never dreamed she wouldn't pay them. Small business owners who don't have $109 million in the bank. Voters who thought she was speaking for them.
I'll leave you with one final point from a column at Salon.com:
The [fundraising] stories have been repeated so often that they seem apocryphal, even though campaign aides swear they're true: students skipping meals to send money to him, seniors doing the same with expensive medicine to send cash to her.
But what are they getting for their money? Do the seniors who aren't taking medication really think Wolfson's daily conference calls with the press are worth the $8,000 a week he made while Clinton lost primary after primary in February? Did Penn's direct mail really give Clinton an edge worth $8.9 million in the race against Obama? Don't candidates who are suddenly raising most of their money from people who can barely afford to send it in have some responsibility not to waste it once they get it?
What is Hillary Clinton sacrificing next to these ordinary people who do without in order to donate? Is she standing beside these donors, or on top of them? Maybe that's too harsh... I don't know. The unpaid bills to small businesses still rile me the most.
You be the judge. What conclusions do you draw? If Hillary Clinton paid all of the people she owes, would she still be financially viable? Should this person manage our national budget and our economy?
Now I'm going to grab a beer and contemplate the sky opening a nice blue sky, the light coming down sunshine, celestrial choirs singing iTunes, and everyone we know (including Hillary Clinton) doing the right thing, and the world will be perfect a better place.
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