WASHINGTON -- In the weeks leading up to the late August Republican National Convention, Mitt Romney's campaign took out a $20 million bank loan to help make it through the month. The loan may come as a surprise, given that Romney trounced President Barack Obama in fundraising from May through July, but nearly all of that money was earmarked for the general election, which only began at the end of the convention.
The loan, which was first reported Tuesday by the National Review Online, will be reflected in the campaign's monthly report filed with the Federal Election Commission on Thursday. The campaign has reportedly paid back nearly half and, although this won't be reflected in the Thursday report, the debt is down to $11 million.
A senior Romney campaign official told National Review Online, "We realized that we could collateralize this debt with $20 million of general-election funds that were already sitting in our bank account." In other words, the campaign was able to obtain the loan based on the money donated for the general election.
This is not unprecedented. Past candidates, including Republican Sen. John McCain in 2008, put up public matching funds as collateral to receive bank loans during the primary campaign. As Romney is not participating in the public financing system, his campaign put up funds raised for the general election as collateral.
With the Romney campaign unable to match the Obama camp in raising primary funds, the president's team took the opportunity to flood the airwaves with advertising during the pre-convention period. The Wesleyan Media Project, which monitors campaign advertising, found a notable disparity in the number of ads favoring Obama versus those favoring Romney over the summer and especially at the end of August and the beginning of September, leading up to Obama's post-convention bump in the polls.
The Obama campaign also was able to pay for a large on-the-ground staff in key swing states throughout the summer.
Despite the $11 million still owed on the loan, the Romney campaign is flush with campaign cash in both its own coffers and at the Republican National Committee. The campaign and the RNC combined had $168.5 million in cash on hand at the end of August, according to a release from the campaign. That kind of money will easily pay off the primary debt and fund advertising, targeting and get-out-the-vote efforts in the remaining weeks of the general election. The Obama campaign, which outraised Romney in August, will not release its cash-on-hand number until Thursday.