Wednesday, April 02, 2008

McCain building November campaign finance machine, breaking campaign finance laws

I saw this story in the Washington Post yesterday, and I do want to comment on it:

As his Democratic presidential rivals squabble, Sen. John McCain has moved to transform his ragtag primary campaign into a general-election operation by boosting fundraising, establishing control over the Republican National Committee, and beginning a conversation with voters who live in states where he has not campaigned.

One of McCain's first decisions has been to assemble a novel and risky campaign structure that will rely on 10 "regional managers" who will make daily decisions in the states under their direction, his advisers said. The managers will gather today in New Mexico to plot strategy with GOP state officials.

Some Republican strategists have said that McCain has not made the best use of the extra time that the prolonged Democratic nomination battle has given him. They have criticized the pace and direction of his decisions and have questioned why the senator from Arizona has not held more fundraisers to close the huge financial gap between him and his rivals.

The WaPost story continues on, saying that the McCain campaign is struggling with a combination of problems with having McCain's message being heard through the clamor of the Hillary Clinton / Barack Obama Democratic primary fight and the impressive amounts of money that both Obama and Clinton have raised. In February, the month he cinched the nomination, McCain raised $11 million. This was an eighth of the combined total of what Clinton and Obama raised. One factor that will work for McCain will be the formation of the Republican Party's Victory Committee, which will put together fundraising events that are held jointly by McCain and the Republican National Committee, bringing in nearly $30,000 per person. The limits for giving to the RNC are much higher that giving directly to the candidate.

And yet, as the McCain campaign anticipates the new money that will be coming in through the Victory Committee, there are still problems within the campaign finance machine. According to the WaPost:

After essentially running out of money during the primaries, McCain was forced to rely heavily on his handful of workers -- many of whom were unpaid -- to run the essential operations on their own, with little direction from the national level.

The results, his advisers said, justified the unorthodox approach. His victories in New Hampshire, South Carolina and Florida were not the result of broad media campaigns driven by national operatives but rather of the ground games built by operatives in those states.

"We are going to try that kind of autonomy," senior strategist Mark Salter said.

That is a departure for a party that has prized itself on running hierarchical, highly disciplined campaigns, and it has sparked grumbling among some Republicans, who say McCain's advisers are moving too slowly to build a large national apparatus.

One senior GOP strategist called the decision "a recipe for internal communication problems and uneven execution." Another senior Republican said the lack of a political director or full-time pollster at McCain's Arlington headquarters has "a lot of us scratching our heads wondering what's taking so long to fill out the team."

Both Republican strategists spoke on the condition of anonymity so they could be candid about the party's presidential nominee.

It is almost like the McCain campaign is going for a de-centralized approach in raising and spending money for the general election campaign, rather than the disciplined, hierarchical campaigns that the Republican Party is known for. And there is a problem with this type of approach. The ground games built up by the McCain operatives succeeded because the campaign was fighting in single, primary states. The national McCain campaign could allow these ground games to essentially build themselves up through their supporters, and essentially have these operatives run the state campaigns themselves, until McCain was ready to stomp through their state just before the primary election. Essentially, you are having 50 separate elections running this year for each state primary and caucus. You can build 50 different campaign organizations that will operate autonomously to help elect your candidate for each primary state. A de-centralized approach can work there.

But now McCain is running a general election. And in a general election, you have one big election day, and 50 separate campaigns working to get Americans to vote for you on that first Tuesday in November. And each of those 50 separate campaigns are asking for money and resources to do their 50 separate campaign jobs. It is here that a national campaign can lose focus on where its strengths and weaknesses are within the states, which states you should attacking your opponent, and which states your opponent is attacking you. Here you need the disciplined, national focus in your campaign strategy in determining where you should plow your money and resources for attacking and defending your opponent in specific states. It is here you need a national campaign to call the shots for the overall campaign strategy, and then order the state campaigns to do the grunt work. This has been the Republican Party's strength during the presidential elections. And yet, the McCain campaign is going against this strategy in that they have failed to bring in a political director or a full-time pollster to their national campaign. Maybe the McCain campaign is trying to emulate itself along the lines of its Democratic rivals. Who knows.

The second big story on the McCain campaign is really what was not said in Tuesday's Washington Post story. For while McCain is building this impressive campaign fundraising machine, he is also breaking his own campaign finance laws. According to this February 22, 2008 Washington Post story:

[McCain's] attempts to build up his campaign coffers before a general election contest appeared to be threatened by the stern warning yesterday from Federal Election Commission Chairman David M. Mason, a Republican. Mason notified McCain that the commission had not granted his Feb. 6 request to withdraw from the presidential public financing system.

The implications of that could be dramatic. Last year, when McCain's campaign was starved for cash, he applied to join the financing system to gain access to millions of dollars in federal matching money. He was also permitted to use his FEC certification to bypass the time-consuming process of gathering signatures to get his name on the ballot in several states, including Ohio.

By signing up for matching money, McCain agreed to adhere to strict state-by-state spending limits and an overall limit on spending of $54 million for the primary season, which lasts until the party's nominating convention in September. The general election has a separate public financing arrangement.

But after McCain won a series of early contests and the campaign found its financial footing, his lawyer wrote to the FEC requesting to back out of the program -- which is permitted for candidates who have not yet received any federal money and who have not used the promise of federal funding as collateral for borrowing money.

Mason's letter raises two issues as the basis for his position. One is that the six-member commission lacks a quorum, with four vacancies because of a Senate deadlock over President Bush's nominees for the seats. Mason said the FEC would need to vote on McCain's request to leave the system, which is not possible without a quorum. Until that can happen, the candidate will have to remain within the system, he said.

The second issue is more complicated. It involves a $1 million loan McCain obtained from a Bethesda bank in January. The bank was worried about his ability to repay the loan if he exited the federal financing program and started to lose in the primary race. McCain promised the bank that, if that happened, he would reapply for matching money and offer those as collateral for the loan. While McCain's aides have argued that the campaign was careful to make sure that they technically complied with the rules, Mason indicated that the question needs further FEC review.

If the FEC refuses McCain's request to leave the system, his campaign could be bound by a potentially debilitating spending limit until he formally accepts his party's nomination. His campaign has already spent $49 million, federal reports show. Knowingly violating the spending limit is a criminal offense that could put McCain at risk of stiff fines and up to five years in prison.

McCain's February FEC report shows that McCain has spent 58.4 million dollars in his primary campaign--well above the $54 million FEC primary spending cap. And the McCain campaign is continuing to raise, and spend, money in this primary season. John McCain is breaking his own campaign finance laws. And since the FEC has too many vacancies to issue a ruling on this matter, the McCain campaign can happily get away with breaking the law. And you can bet that if McCain does become president, he will appoint FEC election officials who will rule in McCain's favor in this issue.

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