DNC Coffers Dry Amid Flood Of Dem Cash

In an election year marked by jaw-dropping Democratic fundraising, one key political player isn’t so flush: The Democratic National Committee.

Despite record hauls by Barack Obama and Hillary Rodham Clinton, the DNC has raised less than half the amount taken in by the Republican National Committee.

According to the latest Federal Election Commission reports filed through the end of March, the RNC had $31 million in cash on hand while the DNC had only $5.3 million. The RNC has raised $36.5 million this year while the DNC has raised $17.7 million.

The story was equally grim in 2007, when the RNC raised a total of $83 million to the DNC’s $50 million.
“The general election has started; we should be raising $15 million a month,” said one senior DNC official who spoke on the condition of anonymity. The committee is raising less than $6 million each month.

“It’s a little nuts that we are spending so much money fighting each other and instead of Republicans,” the official continued. “We should be doing things that start defining McCain our way instead of his way. And if we had more money we could do more.”

The problem, it seems, isn’t that the DNC is doing any worse at this point than in previous presidential years. Rather, the DNC is unable to take advantage of an extremely favorable fundraising environment because the party’s presidential candidates have vacuumed so much cash out of donors. The extended nature of the contest—no other modern presidential race has seen one party’s primary remain seriously contested so long while the other’s concluded so rapidly—hasn’t helped the DNC either.

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“We deserve a lot of credit that we are trying to do what we can with what we got,” said Karen Finney, the DNC’s communications director, who noted that Democratic donors tend to be candidate-driven, as opposed to the more institutional-oriented donors who give year-round, even in the off-cycle years, to the RNC. 

But, Finney acknowledged, “We need donors to give to the DNC.”

In the past week, the DNC began its first efforts to define McCain—a three-week, half-million-dollar ad buy on the cable networks. But few party strategists expect the relatively meager offensive to make a dent in the consciousness of the voting public.

“If you want to do something meaningful with voters to affect more than elite opinion, you have to open up a large-scale media campaign in battleground states,” said Tad Devine, the chief strategist for 2004 Democratic nominee John Kerry.

At the moment though, the DNC lacks the resources to do so. It has focused its efforts on building a massive voter file and national ground team, rather than advertising.

“If we had more money, would we do more?” said one DNC official. “Absolutely.”

The DNC views its first advertising expenditure as “seed money” meant to elicit more donations. After the ad buy, Chairman Howard Dean e-mailed supporters with a link to what he called a “devastating” DNC ad on Iraq—and then asked for contributions.

“All of it—from the new Iraq ad to the organizers in places like Ohio, Colorado, and Oregon—costs money, and we need your help,” the e-mail solicitation read.

Among other things, the fundraising gap has left the Democrats’ “coordinated fund” on empty. While FEC regulations allow for $19.2 million in coordinated campaign operations between the party and the presidential campaign, the party has yet to direct any money into that pot. The RNC’s is already fully funded.

That leaves the RNC poised to unload on the Democratic nominee the moment he or she is selected.

“The thinkng is that both Obama and Clinton are doing a good job of defining each other and we would like that process to continue,” said Frank Donatelli, the RNC’s deputy chairman. “The decision right now is to just let the Democrats continue their primary process and when the time comes we will be ready with a full plate of issues and plenty of money.”

“Who knows,” worried a senior DNC official, “Republicans could be preparing a Swift boat attack.”

Without a fully-stocked coordinated fund or the funds to level a heavy and sustained attack on McCain, the DNC is reliant on state parties and independent groups to soften up the presumptive GOP nominee.

One such group, MoveOn.org, today launched a month-long, $1 million ad campaign targeting McCain on Iraq, timed to coincide with the fifth anniversary of Bush’s ill-fated “mission accomplished” speech.

The senior DNC official stressed that the fundraising squeeze has not yet hit a crisis point. And many Democrats believe that wealthy donors are waiting out the primary before giving to the national party.

More important, the two Democratic candidates have raised so much money to date—in February and March alone, Obama raised some $95 million—that there is no reason to believe the eventual nominee will lack resources, at least in the general election.

Due to their fundraising prowess, neither Obama nor Clinton seem likely to accept the $84.1 million available in public financing for the general election. McCain, on the other hand, is far more reliant on the national party because he is likely to accept the $84.1 million public check—meaning he’ll have far greater dependence on the RNC and state parties for advertising, canvassing voters and galvanizing turnout.

But in a worst case scenario, the DNC official explained, the eventual Democratic nominee could burn through much of his or her primary election cash before the convention and donors might be less responsive to pleas for more money once the nomination battle is settled—leaving the campaign cash-strapped for a prolonged period before the convention, after which the separate general election funds can be tapped.

“I don’t know if the Obama campaign will have so much money by the time that he wins, if he wins,” the DNC official said. “Meantime, voter file, opposition research, voter outreach, we should be doing all the things that the Republicans are doing.”

The sluggish fundraising might also inhibit so-called “hybrid advertising,” which numbered in the tens of millions in 2004. Hybrid advertising is based on a loophole in FEC regulations, discovered and first exploited by the Bush campaign four years ago, in which the party and campaign can split advertising budgets.

Though admittedly concerned about the state of affairs, the record-breaking fundraising pace kept by both candidates this year has left DNC officials hopeful that ultimately the nominee will encourage maxed-out campaign donors to turn their attention to the national party.

“The real answer is sure, [the fundraising is a problem],” the senior DNC official said. “But the question is how much? Disastrously? No. But somewhat, yes.”