Obama Cash Funds Offices in Indiana, North Carolina (Update1)

By Jonathan D. Salant and Timothy J. Burger

Aug. 11 (Bloomberg) -- Democratic presidential candidate Barack Obama is opening campaign offices in Indiana, North Carolina and Alaska, using his financial edge to challenge John McCain in states previously written off by Democrats.

Obama, an Illinois senator, also is concentrating much of his campaign-ad spending since clinching his party's nomination in June on states won by President George W. Bush in 2004, according to a study by the University of Wisconsin in Madison.

Obama's push in previous Republican strongholds includes 14 offices in Indiana, 11 in North Carolina and four in Alaska, according to his campaign Web site. Only one of those states, North Carolina, has backed a Democratic presidential candidate in the past 40 years.

``The number of offices that Obama will be able to open in states where we essentially withdrew from the battlefields in previous campaigns is stunning,'' said former Democratic National Committee National Chairman Steve Grossman, who is raising money for Obama.

In highly competitive Missouri, for example, Obama has opened 29 offices, said Debbie Mesloh, Obama's spokeswoman for the state, which has supported the Democratic candidate in only three presidential elections since 1968. McCain's Web site lists seven offices in the state.

In coming weeks, Obama may be outspent by Republican rival McCain, an Arizona senator who has accepted federal campaign funding and is required to empty his treasury before his party's Sept. 1-4 nominating convention in Minneapolis.

Federal Cap

Yet in the general-election season, which begins after the conventions, McCain will have to limit his spending to the $84.1 million in federal funds. Obama has decided not to accept those funds and may have two to three times more money to spend.

Obama spent almost $10 million on ads in Bush states where McCain had spent nothing between June 3 and July 26: Florida, Georgia, North Carolina, Indiana, Montana and Alaska, the University of Wisconsin study showed.

Both campaigns are spending about $3 million a week on ads, though Obama is running commercials in more states, according to Evan Tracey, chief operating officer of TNS Media Intelligence/Campaign Media Analysis Group, an Arlington, Virginia-based company that tracks political advertising.

Olympics Advertising

Obama made a $5 million ad buy in late July to run during NBC's Olympics coverage and McCain made a $6 million buy this week at the same rates, according to NBC Universal records in New York. Both span the two weeks of the Beijing games and will appear on network and cable in various time slots, including primetime.

In addition, Obama is in a stronger financial position than McCain for the future. Obama, 47, can go back to many of his donors and ask them for more money and can use any funds for the general election, even after his party's Aug. 25-28 convention in Denver. He has raised 48 percent of his money in donations of $200 or less, according to the Center for Responsive Politics, a Washington-based research group.

Neither campaign will discuss its fundraising tally for July. They file that data next week with the Federal Election Commission.

McCain, 71, has relied much more on larger donors; 53 percent of his money has come from contributors who have given the maximum $2,300, meaning they can't be tapped again.

TV Spending

The Arizona senator spent $21 million on TV advertising between June 3 and July 26, compared with $27 million for Obama, the Wisconsin study showed.

Tucker Bounds, a McCain spokesman, said the campaign would have enough resources.

``We are going to be competitive with the Obama campaign across the board, and that will be reflected on the airwaves and in the ground game,'' he said.

McCain began advertising earlier than Obama and spent more in some important states, according to the Wisconsin study. He began in Pennsylvania on May 28 and spent $4.6 million there, compared with Obama, whose ads went on the air June 21 and who spent $3.9 million. In Missouri, McCain was on the air two weeks before Obama and outspent him, $1.6 million to $1.3 million.

McCain's early spending sends a signal to his supporters that ```we're out here, we're going to put on a campaign and we're also going to criticize Obama, or have fun with him,''' said Merle Black, a political scientist at Emory University in Atlanta.

Funding Goals

Obama is trying to raise $300 million for his campaign and another $150 million for the Democratic National Committee. That goal requires raising around $60 million a month. McCain expects to have $350 million, including the federal funds.

The Obama campaign Web site listed 25 offices in Florida as of Aug. 8. Demonstrating that McCain intends to fight hard in the state that decided the 2000 presidential election, the Republican's campaign Web site listed 27 offices and promises nine ``coming soon.''

Obama's cash advantage may make it hard for McCain in even the most reliably Republican states said Barry Burden, a political science professor at the University of Wisconsin in Madison.

``As long as Obama can continue to raise impressive sums of money in small donations, thus allowing him to return to previous donors for more, he can hire all the staff he wants,'' Burden said.

To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net ; Timothy J. Burger in Washington at Tburger2@bloomberg.net .

Last Updated: August 11, 2008 19:05 EDT

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