Obama-McCain Race to Test Candidates’ Fund-Raising Pledges

By Michael Luo and Mike McIntire

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

To confront the Obama juggernaut, Senator John McCain, Republican of Arizona, whose fund-raising has badly trailed that of his Democratic counterparts – and whose efforts suffered a blow this weekend when a key fund-raiser, Tom Loeffler, resigned because of a new campaign policy on conflicts of interest – is turning to the Republican National Committee. 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 George W. Bush, a formidable fund-raiser who has raised more than $36 million this year for Republican candidates and committees, for three events on McCain’s behalf. They will appear together at a fund-raiser in Phoenix, Arizona, next Tuesday, and the following day the president will be in Utah to take part in a luncheon with Mitt Romney in Salt Lake City and then an exclusive dinner at Romney’s vacation home in Park City.

The financial race that is shaping up is likely to produce the most expensive presidential contest in history and test the commitments that both Obama and McCain have staked out to reining in the influence of money in politics.

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

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 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 Thursday in Washington, McCain campaign advisers said.

Lacking a robust small-dollar Internet fund-raising operation, McCain has embarked upon an aggressive schedule of some two dozen high-dollar fund-raising events this month.

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

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, Democrat of Massachusetts. Many potential donors to such groups, which are able to skirt restrictions on donations, are wary of displeasing McCain, Republican operatives said.

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. 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 in contributions of $1,000 and above than Clinton’s once-vaunted team of bundlers of campaign donations. A key task would be to bring members of Clinton’s team into the fold. Informal conversations between top fund-raisers on both sides have begun, but feelings between the two camps remain raw, supporters from both campaigns said.

Although Obama suggested recently that he might consider capping donations for the general election, his campaign manager, David Plouffe, said in an interview that there had been “no real discussions” about the possibility.

“We honestly haven’t had a rigorous discussion about it,” Plouffe said.

Although Obama has collected three times as much money as McCain, Plouffe said he “would not accept the proposition” that Obama would outspend McCain.

“I think they’re going to have a lot of money,” Plouffe said.

McCain drew accusations of hypocrisy this year when he backed out of public financing for the primary, which he had initially when his campaign was struggling but then pulled back from after his fortunes rose. Critics argued that he had used the promise of public financing to secure a $4 million loan to keep his campaign afloat, something that would have bound him to the spending limits that come with the public system.

McCain’s ties to lobbyists have also been drawing increasing scrutiny, a problem the campaign sought to address last week with its new conflict-of-interest policy. Loeffler, a lobbyist who was the general co-chairman of McCain’s campaign, became the policy’s most recent high-profile casualty on Friday when he submitted his resignation. Loeffler’s firm did work for Saudi Arabia, which included a May 2006 meeting between Loeffler, McCain and the country’s ambassador, according to lobbying records. The meeting was first reported over the weekend by Newsweek.

McCain’s advisers say they hope their joint fund-raising efforts can raise $150 million, or just more than $20 million a month until November. Coupled with the $84 million McCain would receive through public financing, which the campaign could spend in the two months after the Republican convention, his advisers insist they will have enough resources to compete with Obama.

Originally published by The New York Times Media Group.

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