Huffpost Politics

Obama is flush, Clinton in debt

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WASHINGTON — Hillary Rodham Clinton is struggling with debt, Barack Obama would like to turn his whopping financial advantage into primary victories, and an uncontested John McCain still lags in fundraising even as he broadens his money-raising apparatus.

Financial reports filed Sunday offered a window into the challenges facing the presidential campaigns as Clinton and Obama continue to slug it out for the Democratic nomination and Republican McCain awaits off stage.

Obama began the month of April with $42 million in the bank for the primary to Clinton's $9.3 million.

But Clinton had debts of $10.3 million at the start of the month, much of it money owed to her main polling, phone banking and advertising consultants. The largest single debt was to the firm of her demoted former chief strategist, Mark Penn.

She also owed $1.17 million to The Spoken Hub, a phone bank operation, and $528,000 to ad maker Mandy Grunwald's firm.

But many of those owed money _ vendors from Pennsylvania to Iowa to Texas _ were not political insiders.

"We desperately need to see payments so we can pay our vendors," said Chris Menichetti, the founder and president of Endeavor Audio and Lighting Services in Dickson City, Pa., who was owed $43,484 by the campaign.

Still, several other firms contacted Monday said they did not consider the campaign delinquent on payments and were confident they would be paid.

"We will, of course, be honoring the debts in the coming weeks and months, and that goes for whatever our debts are and to whomever they are to," Clinton communications director Howard Wolfson said Monday.

For now, Clinton's red ink is less of an obstacle than her inability to keep up with Obama's prodigious fundraising. Obama raised $41 million in March, twice as much as Clinton. His nearly 5-1 edge in cash on hand gave him a rich base from which to challenge Clinton in Pennsylvania, which holds its primary on Tuesday.

But money alone hasn't guaranteed Obama victories. He spent $30.6 million in March to Clinton's $22 million. The month began with tough contests in Ohio and Texas. He lost the popular vote to Clinton in both state primaries even though he outspent her, but he emerged with more delegates in Texas.

On Monday, Clinton officials sought to use Obama's financial advantage as a cudgel, arguing that after outspending Clinton 3-1 in Pennsylvania, Obama could not afford to lose.

"If Sen. Obama can't win a big swing state like Pennsylvania with that big a spending advantage, just what will it take for him to win a large swing state?" Wolfson said.

Most recent polls show Clinton leading in the state by varying margins.

"We came in with obvious disadvantages in the state, being down 20 or more points in the polls," Obama spokesman Bill Burton said. "But tomorrow we're hoping to at least close that gap and do as well as we can."

For McCain, the presumed Republican nominee, the financial demands were not as urgent.

McCain raised $15 million in March and had $11.6 million in the bank at the start of April. It was his best fundraising performance of the campaign, but he still lagged the two Democrats.

Last week, he released the names of his fundraisers _ 73 of them, called "Trailblazers," have raised $100,000 or more, and 33, called "Innovators," have raised at least $250,000.

McCain is now working with the Republican National Committee to maximize his financial reach. He has expanded his stable of fundraisers by attracting money "bundlers" who once backed his primary rivals. And the national party has created a victory fund under the direction of McCain advisers to supplement his campaign money.

The March reports marked the end of the first quarter of 2008 and illustrated how fundraising has spiked dramatically compared to the four quarters of 2007. Obama has raised $132 million so far this year, surpassing his total for all of 2007. Clinton raised $68.5 in the first quarter of this year; her average quarterly fundraising in 2007 was $27 million. McCain has raised $38 million so far this year, also exceeding his 2007 total.

Obama's fundraising in March led all candidates, but it was still lower than the mark he set in February, when he raised more than $55 million. The Illinois senator has raised $235 million in his campaign.

His report showed he spent $9 million on media advertising in March; Clinton spent less than a third of that. Obama spent nearly $5 million on telemarketing and $3.6 million for travel and lodging. Clinton spent about $5 million on travel and about $2 million on phone banks.

Clinton spokesman Jay Carson said Clinton's online fundraising is on the rise and noted that the March figures do not include the $2.5 million she raised last week at an Elton John concert in New York. Carson said the event's total sum included money from 6,000 new donors.

In January, Clinton made a $5 million personal loan to the campaign. The campaign has reported no other personal loans since.

McCain's biggest expense of the month was $3 million to Fidelity & Trust Bank to finish paying off a $4 million loan that had become the focus of a stalemate between McCain and the Federal Election Commission. Campaign finance regulators want to make sure McCain did not use the promise of public financing in the primary to secure the loan. McCain was eligible for public financing in the primary, but his lawyers said they did not use that eligibility as collateral.

He also refunded donors about $3 million in contributions, most of it money he had received for the general election. The refunds set the stage for McCain to accept about $84 million in public funds for the fall campaign. Candidates who accept public financing cannot raise money from donors for the general election campaign.