John McCain to rely on party money

By Michael Luo and Mike McIntire

updated 7:24 a.m. ET May 19, 2008

Pivoting toward the general election, Senator Barack Obama is turning again to his history-making fund-raising machine, which helped to anoint him as a contender against Senator Hillary Rodham Clinton and then became a potent weapon in their battle for the Democratic nomination.

To confront the Obama juggernaut, Senator John McCain, whose fund-raising has badly trailed that of his Democratic counterparts, is leaning on the Republican National Committee. Mr. McCain’s efforts to raise money suffered a blow this weekend when a key fund-raiser, Tom Loeffler, resigned because of a new campaign policy on conflicts of interest.

Mr. McCain is likely to depend upon the party, which finished April with an impressive $40 million in the bank and has significantly higher contribution limits, to an unprecedented degree to power his campaign, Republican officials said.

To that end, Republican officials said they were enlisting President Bush, a formidable fund-raiser who has raised more than $36 million this year for Republican candidates and committees, for three events on Mr. McCain’s behalf. They will appear together at a fund-raiser in Phoenix on May 27, and the next day the president will take part in a luncheon with Mitt Romney in Salt Lake City and then an exclusive dinner at Mr. Romney’s vacation home in Park City, Utah.

Financial arms race
The financial arms race that is shaping up is likely to produce the most expensive presidential contest in history and test the commitments that both Mr. Obama and Mr. McCain have made to rein in the influence of money in politics.

Mr. Obama’s fund-raising success makes it increasingly likely that he will back away from a pledge he made last year to accept public financing for the general election — and its attendant spending limits — if the Republican nominee also accepted public money.

Several major fund-raisers for Mr. Obama said in interviews that they could not envision the campaign sheathing its sword and accepting public financing, given how powerful Mr. Obama’s fund-raising could be in the Democrats’ urgent quest to reclaim the White House. Mr. Obama would be the first major-party presidential candidate to bypass public financing for the general election since the system began in 1976.

Mr. McCain, who abandoned public financing in the primary but has indicated he would employ it in the general election, is aggressively building a joint fund-raising operation with the Republican National Committee and state party committees in four battleground states. These committees can raise money far in excess of the $2,300 limit imposed on individuals giving to Mr. McCain’s presidential campaign. Donors can write a single check of almost $70,000 to the committees that is divvied up to various entities.

Offering a glimpse of the kind of money that can be spread around with such a committee, $300,000 was collected from nine hedge fund executives and real estate investors at an event in New York in March, according to a report filed with the Federal Election Commission. More than $10 million was raised at an event on Thursday in Washington, McCain campaign advisers said.

Lacking a robust small-dollar Internet fund-raising operation, Mr. McCain has a busy schedule of some two dozen high-dollar fund-raising events this month.

'Hard to be a reformer'
Advocates concerned about the influence of money in presidential campaigns expressed alarm at how two candidates who have emphasized reform have moved closer to a no-holds-barred sprint for cash. Mr. McCain was a co-author of sweeping campaign finance legislation in 2002, and Mr. Obama has rejected donations from federal lobbyists and political action committees.

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But the crucible of a presidential contest inevitably yields new priorities.

“It’s hard to be a reformer,” said Joan Claybrook, president of Public Citizen, “when you’re trying very hard to raise as much money as you can.”

There are early signs, though, that some of the more controversial elements of recent presidential campaigns might be somewhat muted this time around.

On Thursday, the leader of Progressive Media USA, which had been expected to be the major vehicle on the Democratic side for unregulated donations directed toward television advertising, said the group would stand down because of disapproving signals from the Obama camp.

Similarly, the Republican side has not mounted a major “soft money” effort for the general election comparable to Swift Boat Veterans for Truth, which in 2004 undermined the presidential bid of Senator John Kerry. Many potential donors to such groups, which are able to skirt restrictions on donations, are wary of displeasing Mr. McCain, Republican operatives said.

Mr. Obama’s fund-raising machine has been powered by more than 1.5 million donors, the overwhelming majority of whom have given to him in small increments over the Internet. Mr. Obama has argued that with this wide base of small donors, he has created something of a parallel system of public financing.

His fund-raising apparatus, however, also features a formidable high-dollar network that has collected more $1,000 contributions and above than Mrs. Clinton’s once-vaunted team of bundlers of campaign donations. A key task would be to bring members of Mrs. Clinton’s team into the fold if she leaves the race. Informal conversations between top fund-raisers on both sides have begun, but feelings between the two camps remain raw, supporters from both campaigns said.

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