The Clinton Cash Shortage: Fundraising Stunt or Endangered Candidacy?

If money makes the difference, Hillary Clinton may be in trouble. While I'm not convinced that money always makes the difference, I've wondered since mid-January about the richness of Clinton campaign coffers. Today, I'm puzzled and sense something possibly fishy...

When in Nevada two weeks ago helping with that state's caucus count, I noticed an amusingly juicy little story about the spending habits of the Clinton campaign. Per the Las Vegas Review-Journal on January 19, 2008:

" Democratic presidential candidate Hillary Clinton and her camp ate a little higher off the hog than her rival Barack Obama during their week of campaigning in Las Vegas.

"Both campaign camps called N9NE Steakhouse at the Palms minutes apart Friday for a food delivery. Chef Barry Dakake... delivered around $200 worth of food, including two Kobe burgers, two organic chicken sandwiches and one order of Dover sole, to Obama in a conference room at the Las Vegas Signature Terminal.

"The Clintons' tab came to $1,530 and included entrees of nine steaks, three chicken, three salmon and three Maine scallops, two lobster pappardelle, salads, sashimi, rock shrimp, and various side dishes. The Clintons, who spent the week in a Bellagio villa, also had a big order delivered from N9NE on Monday."

Forbes magazine dubs the villas at the Bellagio Hotel "the most expensive hotel room in Las Vegas," with each of the nine villas featuring "a private terrace and pool" and "a private butler service and private limousine entrance."

The implication of this innocuous story is clear: the Clintons and their entourage were living large and luxuriously in Las Vegas. Now I have no idea if the Clintons were comped (i.e. given a freebie or discounted rate) at the elegant five-star Bellagio Hotel, or if the Obamas were staying in similarly posh digs. But this gossipy tidbit made me briefly stop and wonder...

Hillary Loans $5 Million to Her Cash-Hungry Campaign
Then came word on February 6 that Sen. Hillary Clinton was forced, in late January (after their Las Vegas sojourn?) to loan $5 million to her unexpectedly cash-strapped campaign.

Per Sen. Clinton, a $5 million fund infusion was needed because "We had a great month fundraising in January, but my opponent was able to raise more money."

And that's true. Per all reports, the Obama campaign generated a mind-boggling $32 milliion in January 2008, versus about $10 million, plus the $5 million loan, by the Clinton campaign.

But that still doesn't make a lot of sense, unless the Clinton campaign has run through cash at an unimaginably unprecedented (and oddly ineffective) rate. Hear me out here...

Per the Federal Election Commission for the fourth quarter of 2007, Sen. Clinton outpaced Sen. Obama in contributions by $4 million: $26.8 million for Clinton vs. $22.8 million for Obama.

Additionally, Sen. Clinton reported a cash balance of $37. 9 million at December 31, 2007, versus $18.6 million for Sen. Obama. (For more info, see Fundraising Results & Donor Info for Hilllary Clinton and Barack Obama.)

Bottom line: $5 million is a pittance. A week's spending for these campaigns, and by the calculations of this former CPA, about four days' spending for the Clintons in January 2008. $5 million represents just 13% of what the Clintonistas had on hand less than 40 days ago.

Like I said... the Clinton cash shortage makes little logical sense. Only three puzzling explanations are possible:

• Either in January, Hillary Clinton outspent Barack Obama roughly 2-to-1, and yet won the same number of voting delegates; or

• The Clinton campaign embarked on a lavish spending spree in January 2008, as possibly evidenced by their reported sumptuous habits in Las Vegas.

• It's a stunt, and the shortage is wholly or partially untrue. (As I write these words late on February 7, ABCNews.com sports a story headlined Cash Strapped Clinton Campaign - Stunt? )

If the Clinton camp couldn't survive a week ago without an immediate loan of $5 million, then, indeed, Hillary Clinton's candidacy is in very deep trouble.

Mixed Financial Signals from the Clinton Camp
Since Sen. Clinton's embarrassing announcement 36 hours ago about her personal loan, her campaign has issued confusing and conflicting statements about the financial status of her campaign. In chronological order, various spokespersons have said:

• Some high-ranking Clinton campaign staffers will forego pay for the month of February. (Also see the New York Post's Hillary Clinton Will Go for Broke.)

• Hillary Clinton raised $4 million from 35,000 donors less than 48 hours after Super Tuesday. (Obama reports raising $7 million during that same period.)

• Per ABC News late on February 7, Clinton campaign staffers are "not going without pay" after all. Reports ABC News, " 'It's not happening,' said a source familiar with the situation."

• Clinton campaign chair Terry McAuliffe announced this evening that they have "raised $7.5 million since February first -- $6.4 million of that came in through online donations in the 24 to 30 hours after polls closed on Tuesday."

  Per ABC News, "McAuliffe called the record fundraising numbers 'spectacular' and thanked donors for their 'huge outpouring of support'."

Meanwhile, the Obama campaign reports that it's on-track to raise another $30 million in February 2008. Per Politico.com:

" Insiders in both campaigns say the growing financial disparity virtually ensures that Obama will be able to significantly outspend Clinton in the critical primaries to come."

But Will the Money Make a Difference?
John McCain fired his staff last summer, and had no funds left for anything but the bare minimum of events. And Mike Huckabee has cleverly operated his entire campaign on a shoestring.

McCain and Huckabee are the last two Republicans standing in the race for the White House, while big-spender Mitt Romney is headed home to Massachusetts.

When a candidate captures the national pulse of his/her party, the money probably doesn't make a difference. And as proven again, this time by Mitt Romney, throwing money at a presidential race doesn't guarantee victory.

Barack Obama won't win the Democratic nomination simply because he can buy more TV time. And Hillary Clinton won't lose the nomination because she'll attend a few less rallies, or fund less on-the-ground operatives in upcoming contests in smaller states.

Shades of Past Clinton Cash Problems
Here's what really bothers me about this latest bit of Clinton chaos: The intransparency. The whiff of dishonesty and trickery.

And most of all, the potent reminder of Bill and Hillary's dicey relationship with money over the past couple decades, from the Whitewater land deal mess, the "missing" Rose Law firm billing records, and Hillary's infamous cattle future trading profits to serious allegations of quid pro quo trading of presidential pardons for political contributions (Remember Marc and Denise Rich?) and on and on and on...

No, the money shouldn't make a difference. But the handling of money with transparency and honesty should make a huge difference.

Something's fishy about about this Clinton campaign cash shortage. I don't know what it is, but it doesn't speak well for Hillary Clinton. And it lends subtle credence to all the old stories about the Clintons and cash.

And it makes me ask: Do Democrats really want the ethics-challenged Clintons to run against John McCain, author of McCain-Feingold campaign finance reform and respected champion of fiscal ethics?

THAT answer about money should make the difference in choosing between Barack Obama and Hillary Clinton for the Democratic presidential nomination and to run against John McCain for the presidency.

(Photo courtesy of the Bellagio Hotel in Las Vegas.)

Related Reading
Barack Obama - Fundraising Stats and Donor Info
Hillary Clinton - Fundraising Stats and Donor Info
Politico.com, Feb 7, 2008: Where the money went
Bloomberg.com, Feb 6, 2008: Clinton Loaned Her Campaign $5 Million Last Month (Update 2)
Politico.com, Feb 7, 2008: Obama on pace to raise $30 M in Feb.