Cash fuels the race for the White House
THE money train is back on track with a fury.
In the offices of hedge fund managers, the mansions of Hollywood stars and the homes of politicians, campaign cheques are being scribbled next to scrambled eggs and coffee, fine wine and caviar.
An eclectic bunch of conservatives, liberals, business tycoons and dapper lobbyists are all united in one aim: to raise mega-million bucks for their presidential candidates.
The 2008 presidential election could be the first billion-dollar one in the United States.
Americans have given US$157 million (S$237.5 million) to candidates so far this year, more than five times the total contributed to campaigns in the same period four years ago.
Harvard Professor Thomas Patterson, a leading expert on US electoral politics, told The Straits Times: “The amount of money going to be collected and spent will be off the charts.”
Significantly, the two Democratic front runners – Mrs Hillary Clinton and Mr Barack Obama – are filling their coffers more rapidly than their opponents, including Republicans – who have led the presidential campaign money race since 1976.
Although it is early days yet, the latest figures suggest that the ground may be swinging in favour of the Democrats, not only for fund- raising, but also for spending.
Mrs Clinton, the New York Senator and former first lady, banked US$24 million for her campaign in the first three months of the year.
She raised US$19 million for the initial round of primary elections and boosted her coffers with a US$10 million transfer of money left over from her successful Senate campaign last year.
Mr Obama, a newcomer on the national stage, surprised many by outdoing Mrs Clinton. He collected US$24.8 million in donations for the primary and, after spending, has US$18.2 million remaining in his war chest.
Mr John Edwards, the Democrats’ vice-presidential nominee in 2004, established himself as a likely alternative by raising US$13 million and reporting US$9.8 million in the bank at the end of the first quarter.
Republican candidates were left playing catch up.
Mr Mitt Romney, the former Massachusetts governor, filed US$20.7 million in donations. But Mr Rudy Giuliani, the former New York mayor, who raised US$15 million, stayed even with him with cash in hand. Both have more than US$10 million in the bank.
Arizona Senator John McCain, seen as an early leader in the race, had only half as much in the bank, with a US$1.8 million debt to boot. He raised US$12.5 million.
These eye-popping figures are early indications of a candidate’s fund-raising base and organisational strength.
Prof Patterson said most candidates are choosing to raise their own funds instead of using public financing.
After the Watergate scandal in 1974 which brought down Republican president Richard Nixon, legislators moved to limit campaign spending and the influence of wealthy special-interest donors by offering matching funds from the federal government to candidates who agreed to cap their spending.
This worked fairly well for two decades. Then, in 2000, candidate George W. Bush ushered in a new era when he opted out of public financing. He raised more than US$100 million, forcing out competitors who could not generate as much funds.
Four years later, he turned once again to private money. So did his Democratic challengers, Mr John Kerry and Mr Howard Dean.
The thinking today is that a publicly-financed candidate will be relegated to the second tier.
Prof Patterson noted: “It’s turned into a money race because candidates don’t want to fall behind. Having more money creates this perception of viability.
“Donors will want to give more to someone who they see leading the fund-raising charts. Inevitably, the rich get richer, and the poor get poorer.”
Other factors are also at play. Earlier primaries mean that candidates will have to generate funds sooner rather than later to fight on several fronts across the country.
The candidates spend the big bucks on a massive logistics operation that entails chartering planes, booking hotels and running field operations in important states.
The bulk of the money, however, goes to television advertising.
“Twenty years ago, candidates could get away by placing an ad in the national newspaper,” said a senior congressional aide to a Republican senator.
“There is no chance of that happening today with the proliferation of media outlets.”
Federal Election Commissioner Michael Toner sees many candidates raising US$100 million each this year alone.
“I believe that the nominees of the two major parties will end up raising US$500 million apiece in the 2008 race, so that it will be the first billion-dollar election,” he said.
Republicans are today finding it harder to draw money.
A recent survey by the Pew Research Center found that in 1995, the year after the Republican Party took control of the House and Senate, there were nearly twice as many Republicans as Democrats among the most affluent 10 per cent of registered voters.
There are now just as many Democrats in this top tier.
Discontent with President Bush and the war in Iraq are also factors in the fund-raising race.
While Mrs Clinton appears to be the Democratic candidate with the most extensive money network, Illinois Senator Obama has raised more money, and many Clinton fund-raisers are now helping him.
He has more than 100,000 donors, twice her number.
Proponents of the current system say that it supports the cardinal First Amendment right – the freedom of expression, which is a cornerstone of American democracy. Anyone can run for the presidency and raise funds for this objective.
Detractors argue otherwise.
They say that private fund-raising not only opens up the system to corruption, but also undermines democracy. Outsider candidates who take public financing might just be left in the dust.
“It may be that some lesser-known candidate who does not have significant financial muscle has the best political message for the country,” Mr Steve Weissman, an analyst with the Washington-based Campaign Finance Institute, told The Straits Times.
“Is that democratic? Think of it like this. If it weren’t for public funding, then the outsider candidates like Ronald Reagan in 1976, and George H.W. Bush in 1980, never would have had a chance.”
ADVERTISING IS KEY
“Twenty years ago, candidates could get away by placing an ad in the national newspaper…There is no chance of that happening today with the proliferation of media outlets.”
A SENIOR CONGRESSIONAL AIDE to a Republican senator, on TV advertising, which the bulk of candidates’ funds go to.