Political campaigns, like corporations, sometimes play games with their financial reports. The motives are similar: Candidates, like CEOs, want to project an image of strength, momentum, and growth. Early in a Presidential campaign, contributions offer one rough measurement of whose political stock could rise over time.
In the jump-started 2008 race for the White House, fund-raising is receiving more attention than ever before, as candidates strive to show that they can compete in the coming advertising wars. But numbers officially disclosed on Apr. 15 confirmed that, like their business counterparts, the financial engineers of the campaign trail are increasingly employing gimmicks to spruce up the bottom line.
Candidates knew that how much they could raise in this year's first quarter would become a key test of viability. Not coincidentally, several campaigns reported surges in donations on Mar. 31, the last day of the quarter.
Senator Barack Obama (D-Ill.) disclosed 3,885 individual contributions on Mar. 31. Just the day before he had only 643. The Obama campaign attributes part of the spike to a last-day push on the Internet and fund-raising "house parties" held on the night of the 31st. But campaign spokesman Bill Burton acknowledges that the Obama team counted as first-quarter income many checks that arrived in the mail after Mar. 31. Campaign rules allow wiggle room for this practice, as long as the checks were postmarked by that day, which Burton says was the case with the late Obama contributions. The campaigns of Senators Hillary Clinton (D-N.Y.) and John McCain (R-Ariz.) reported similar patterns and said they acted appropriately.
Candidates frequently stall payments to vendors to maximize cash on hand. John Weaver, a political adviser, received $61,000 in fees from the McCain campaign for his work during January and February. But he received nothing in March. A campaign spokesman explains that Weaver is usually paid at the end of each month for the following month, but April was handled differently. The campaign paid Weaver on the first of April, saving $20,000 in cash for its first-quarter tally.
Another example: Campaign staffers for former Massachusetts Governor Mitt Romney were paid twice a month in January and February but then only once in March. The sole payment kept hundreds of thousands of dollars in cash on hand for the quarterly report. A Romney spokesman attributes the delay to the fact that the second March payday would have fallen on a weekend. Instead checks went out on Monday, Apr. 2.
As with the timing of contributions, federal election rules on paying bills are flexible. They allow campaigns to make payments as late as creditors will allow.
Presidential candidates raise money for both primary and general elections. But general election funds come into play only if a candidate survives to become a nominee, so campaigns put a premium on collecting primary money early. Many donors send checks for $4,600, intending to give the $2,300 maximum for the primary and the general election. Campaign staffers often call such contributors and ask if the money can be booked as primary donations from both the donor and his or her spouse. That allows the campaign to deposit all of the money in the primary election fund and use it immediately. Campaign rules allow candidates plenty of room for this maneuver, too.
While most campaigns quietly seek to "reattribute" donations in this fashion, former Senator John Edwards (D-N.C.) disclosed the practice in his Apr. 15 report. His campaign says it acted legitimately to boost donations.
Campaigns like to surprise the media with strong numbers, so they circulate artificially low quarterly predictions. Just after Clinton announced her Presidential bid in January, campaign aides told supporters they hoped to raise $15 million by Mar. 31. Clinton in fact raised $26 million. Meanwhile, just one day before the end of the quarter, an unnamed Obama official told the press that he'd consider $8 million to $10 million to be a good haul for the first quarter. Obama did much better, reporting $25 million.
By Eamon Javers and Richard S. Dunham