April 23 (Bloomberg) -- President Barack Obama held a 10-to-1 cash advantage at the start of this month in the campaign fundraising contest with Republican Party front-runner Mitt Romney.
The president had $100 million in the bank at the end of March, while the former Massachusetts governor had $10 million in cash, according to disclosure forms filed with the Federal Election Commission.
In prior presidential races, such a financial imbalance would define the dynamics of the race as a cash-strapped challenger facing an empowered incumbent. Not so this year, as Obama’s fundraising advantage shrinks to 2-to-1 when independent political groups aligned with the Republican Party are matched against the president and his Democratic allies.
“President Obama has been counting on the fundraising prowess that comes with being an incumbent as well as the network of donors on who he relied in 2008,” said Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey. “But changes in campaign finance practices and the Supreme Court’s Citizens United decision have opened an opportunity for the GOP to match him.”
The ability of the Republicans to remain competitive with a president who faced no primary and holds a record for raising about $745 million for his 2008 campaign illustrates the impact of the Supreme Court’s 2010 decision removing limits on corporate and union campaign spending.
Republicans Outraise Democrats
As they did in 2010, Republican super-political action committees and groups organized as tax-exempt public policy organizations are out-raising the Democrats with the help of multi-million dollar donations from wealthy individuals and corporations.
Republican donor Harold Simmons, chairman of Dallas-based Contran Corp., contributed the maximum $2,500 to Romney’s primary campaign in June. Thanks to the Citizens United decision, Simmons had committees in which to give more, including $10 million to pro-Republican American Crossroads and $800,000 to Restore Our Future, a pro-Romney group, according to the Center for Responsive Politics, a Washington-based research group that tracks campaign donations.
In contrast, Jeffrey Katzenberg, chief executive officer of Glendale, California-based DreamWorks Animation SKG Inc., is among the Democrats’ biggest givers. He donated $5,000 in April 2011 to Obama’s primary and re-election bids; $30,800 to the Democratic National Committee; and $2 million in May 2011 to Priorities USA Action, a super-PAC supporting the president’s re-election.
As a consequence, Obama’s re-election committee; the super-PAC supporting his candidacy, Priorities USA Action; and the Democratic National Committee combined had $133.6 million cash on hand entering April.
Romney’s campaign committee; the super-PACs backing him Restore Our Future and American Crossroads; and the Republican National Committee had $73.6 million in their bank accounts at the beginning of this month.
“It is not a stretch that Romney will be building a formidable money-harvesting machine,” said Steffen W. Schmidt, political science professor at Iowa State University in Ames.
Obama in February urged supporters to begin contributing to the Priorities USA super-PAC. The pro-Obama committee has asked former President Bill Clinton to help raise money for it.
The ties among the campaign and the outside groups are significant.
Carl Forti, political director of American Crossroads, also serves on the board of Restore Our Future. Former Republican National Committee Chairman Ed Gillespie, who earlier this month became a senior adviser to the Romney campaign, helped set up the Crossroads groups with Karl Rove. Both Gillespie and Rove worked in the White House under President George W. Bush.
The Democratic groups also carry familiar names. Among the founders of Priorities USA is Bill Burton, a former spokesman for the White House, bringing expertise to the general election.
“So far, the Romney campaign cannot match Obama’s technology nor its outreach in the field,” said Stephen Wayne, a professor of government at Georgetown University in Washington. “Obama’s early start gives him an advantage here.”
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