Clinton May Erase Obama's Fund-Raising Edge in Third Quarter

By Jonathan Salant and Kristin Jensen

Sept. 26 (Bloomberg) -- Hillary Clinton may blunt one of rival Barack Obama's few advantages in the race for the Democratic presidential nomination: money.

As the campaigns press donors with predictions that their candidate is losing the fund-raising race, both Clinton and Obama are set to report about $20 million in donations during the third quarter, which ends Sept. 30, according to campaign officials and fund-raisers.

A failure to out-raise Clinton would deprive Obama of the momentum he needs to overcome his rival's significant leads in national and key state polls. Obama raised $33 million to her $27 million in the second quarter and ended up with more cash on hand for the primary elections. His campaign had aimed to be able to outspend her significantly in the last part of 2007 and early next year.

``The Clinton juggernaut is moving if she out-raises him this quarter,'' said Peter Fenn, a Democratic consultant who isn't affiliated with any candidate this year. ``It makes the argument for her winnability an easier one.''

A comparatively strong haul for Clinton would allow her to minimize Obama's argument that his larger list of donors reflects a broader appeal to voters. Obama's Web site says he has more than 340,000 contributors. Clinton said she had more than 100,000 in a Sept. 23 interview on NBC. She wouldn't comment further at a news conference the next day.

While the totals may change as the candidates continue to raise cash this week, political giving typically slows in the third quarter as would-be donors take summer vacations and grow weary of requests for money. The fourth quarter often picks up again ahead of the first nominating contests in January.

Maximum Donations

Both campaigns said they had tapped new sources of cash. More of Obama's donors made small donations in the first and second quarters, making them available for repeat requests. By contrast, 70 percent of Clinton's donors had offered up the maximum $2,300 for the primary elections by the end of the second quarter, the Washington-based Center for Responsive Politics said. Many have also given $2,300 for the general election, which Clinton, 59, can spend only if she wins the nomination.

Obama, 46, points to his donors as evidence that his message is resonating. ``Everybody's talking about the kind of money we raised,'' Obama said in a speech to labor leaders last month in Iowa. ``We raised it the old-fashioned way -- $5, $10, $25.''

Recruitment

Clinton's lead in the polls and strong performance in candidate debates is helping her with donors and fund-raisers, said Clinton supporter and former Democratic National Committee Chairman Steve Grossman.

``Even people who are grudging in their approval for and respect for Hillary have to admit that she's run an outstanding campaign,'' Grossman said.

Obama fund-raisers and campaign officials said their candidate would have plenty of money to compete in the primaries and that national polls don't reflect his competitive standing in early nominating states such as Iowa.

``He gets better and better on his feet,'' said Obama fund- raiser James Torrey, chief executive officer of New York-based Torrey Associates.

Former North Carolina Senator John Edwards, the third-place contender in the Democratic race, is pushing to raise $1 million on the Internet in the last 10 days of the quarter. His campaign declined to comment on his fund raising other than to say he is on track to reach his goal of bringing in $40 million before the first contests. Edwards, 54, raised $23 million in the first half, about half as much as Clinton and Obama.

Republicans

Strategists expect Obama, an Illinois senator, and Clinton, a New York senator, to keep winning the money race in comparison with the Republicans. They will be watching to see whether former New York Mayor Rudy Giuliani, 63, or ex-Massachusetts Governor Mitt Romney, 60, brings in the most in their field and whether former Tennessee Senator Fred Thompson, 65, who entered the race this month, can compete financially.

This quarter's report will also show whether former Arkansas Governor Mike Huckabee, 52, has been able to capitalize on his second-place finish in a Republican straw poll in Iowa in August. The campaign of Arizona Senator John McCain, 71, will get a chance to prove he has been able to recover after fund- raising fell short in the first half and he burned through almost all the cash he raised.

Officials at the Republican campaigns declined to comment on fund-raising totals or didn't return calls.

As they prepare to file their third-quarter reports by Oct. 15, the campaigns are engaging in a time-honored tradition: hyping an adversary's strength. Both Clinton and Obama backers have said publicly that they expect their rival's campaign to raise more than $30 million in the third quarter, a figure no expert takes seriously.

To contact the reporters on this story: Jonathan Salant in Washington at jsalant@bloomberg.net ; Kristin Jensen in Washington at kjensen@Bloomberg.net

Last Updated: September 26, 2007 00:03 EDT

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