Signs of financial strain showing up for Romney
March 16, 2012
SAN JUAN, PUERTO RICO (AP) – The long and increasingly messy Republican presidential contest is starting to hit Mitt Romney where it hurts most: his wallet.
New signs of financial stress are emerging in Romney’s campaign, which has built a wide lead in delegates thanks in part to the might of his bank account and multistate operation. As rival Rick Santorum’s surprising strength keeps extending the nomination battle, Romney has scaled back expenses, trimmed field staff in some cases and begun to count more on free media coverage to reach voters. And he’s still relying on an allied super political action committee to supplement his spending on expensive TV ads.
This week, the former Massachusetts governor was forced to spend two days privately courting donors in the New York area, even as his Republican rivals were wooing voters ahead of pivotal elections in places like Illinois, where he hasn’t been in four months, and as President Barack Obama was stockpiling cash for the fall general election fight.
On Wednesday, Romney had five finance events in New York, all packed, raising about $3 million, with more set for Thursday. So the news is hardly all bad. Wednesday “was the best day we’ve had so far,” said New York Jets owner Woody Johnson, who accompanied Romney to multiple events, including a donor breakfast in New York City.
But it’s less encouraging for the campaign that the money is badly needed to re-fill coffers that had sunk close to their lowest levels since Romney launched his presidential effort last year.
It’s unclear if he will tap his own personal wealth.
The former financial executive, whose personal wealth is estimated between $190 million and $250 million, loaned his 2008 presidential campaign $42 million. Top aide Eric Fehrnstrom says Romney has not loaned his campaign any new funds this cycle and has “no plans” to do so.
Raising money to get through a protracted primary fight is clearly not how Romney wanted to be spending his spring. He had hoped to have wrapped up the nomination by now, giving him the freedom to raise money for the general election against Obama. The incumbent Democrat doesn’t have a primary challenge, and already is well into running for re-election. He’s spending 14 hours Friday raising money; the biggest event is to be with actor/director Tyler Perry and musician Cee Lo Green in Atlanta.
As Romney reloads for his GOP fight, his chief Republican rival, Santorum, is showcasing new fundraising success. The once-lopsided money race between the top two Republican candidates has never been closer. For the month of February, Romney boasted his second-best fundraising month ever, taking in $11.5 million. Santorum, who has a vastly smaller organization to support, wasn’t far off, with $9 million.
For months, the former Pennsylvania senator’s campaign was marked by disorganization and a shoestring operation that largely depended upon passionate but inexperienced volunteers. Santorum has finally opened a national headquarters to replace the post office box that previously served that role. And he’s added several paid staff.
Romney aides acknowledge they’re looking at ways to reduce costs.
The campaign stopped conducting expensive polling ahead of the Michigan primary. Instead, it now counts on lower-cost voter ID phone calls, which aides contend are nearly as accurate as internal polls. Romney also stopped using the 150-seat plane that could accommodate the press after Super Tuesday and is instead flying with a small group of aides and Secret Service agents on a smaller and cheaper aircraft.
Further, his staff is pursing what it calls creative ways to maximize free television coverage to supplement a flood of paid television advertising. Romney notified local media, for example, that he’s scheduled to arrive at the San Juan airport Friday at 2:30 p.m., although there are no formal remarks or events planned for that time. That’s not typical for the buttoned-down campaign with the tightly controlled media schedule.
Publicly, Romney and his senior team have offered no hint of financial stress.
Fehrnstrom said that “we started March with more cash on hand than any of our opponents. Our fundraising continues to be healthy. We have all the resources we need to remain competitive in this race.”
Indeed, Romney scored narrow victories over Santorum in Michigan and Ohio in recent weeks, drawing on his financial advantage to outspend his opponents on the local airwaves. It was the same in Mississippi and Alabama this week. But in those Southern cases, Santorum overcame his cash deficit and scored twin victories that threatened to re-set the Republican contest.
Henry Barbour, a Republican operative who is helping Romney’s fundraising in the South, said money won’t necessarily decide the nomination.
“Cash is always a fundamental factor, but if it becomes a one-on-one, it becomes a little less important,” said Barbour. “Romney has several structural advantages – cash is one. He also tends to have more staff, surrogates, party regulars and leaders who should make it easier for him to fight on multiple fronts. Santorum’s back is still against the wall, but we need to close the deal.”
Santorum hopes to maintain momentum by defeating Romney Sunday in Puerto Rico’s GOP primary, which offers candidates the opportunity to score points with Hispanic voters, while building a broad donor base with ties throughout Florida and New York.
But after his two days of fundraising in New York, Romney arrives in Puerto Rico on Friday without any finance events scheduled. Aides were concerned that the trip might be portrayed as an ATM withdrawal. Instead, only a handful of deep-pocketed donors are expected to contribute the maximum allowed under federal law, $2,500.
Illinois, which hosts a primary on Tuesday, is the next big test. And despite financial strains, Romney is showing little sign of abandoning his traditional paid advertising dominance, thanks in part to the Romney-aligned Restore Our Future super PAC working on his behalf.
Romney and that group have been running Illinois television advertising that, combined, exceeds $2.4 million. Santorum’s aligned super PAC is spending $400,000 there so far.
And Romney super donor Johnson says the fundraising community is as engaged as ever.
“You’d think you’d see some donor fatigue, but we haven’t,” Johnson said. “From the beginning, we said we’d be in this a long time and we planned accordingly.”