Thursday, February 07, 2008

Aggressive Obama TV Spending Prompted Clinton's Loan

Will 24's David Palmer fiction be Obama reality?

Aggressive Obama TV Spending Prompted Clinton's Loan

By Matthew MoskWashington Post Staff WriterFriday, February 8, 2008; A08

When Sen. Barack Obama began to bombard Super Tuesday states with television ads late last month, top advisers to Sen. Hillary Rodham Clinton quickly realized they could not afford to match the effort, and first broached with her the notion of dipping into her personal bank account.
"The campaign faced a strategic decision -- either attempt to match his TV . . . or lose," said a senior Clinton adviser, who spoke about the internal discussions on the condition of anonymity. "I would say given the result of Super Tuesday, it was the right decision."
The $5 million loan telegraphed for the first time that the Clinton campaign, which raised more than $100 million in 2007, had suddenly hit the financial skids. Clinton disclosed the loan on Wednesday.
What campaign aides have described as a "temporary cash-flow problem" left Clinton (N.Y.) unable to match Obama's advertising in upcoming primary states for much of this week. It also made some of Clinton's top donors, in key states such as Texas, uneasy.
Alonzo Cantu, a South Texas developer who has raised more than $1 million for Clinton's bid, said that while his region remains "Clinton country," he can hear Obama's footsteps in a state whose March 4 primary offers a huge delegate prize.
"They're buying media, they're calling state representatives, they're calling key senators," he said of the Obama campaign. "It's Clinton country, but right now it feels like it's hers to lose. She doesn't seem to be very active."
Cantu's concerns may be short-lived. Clinton campaign chairman Terence R. McAuliffe told donors on a conference call that the disclosure of the $5 million loan had unleashed a fresh flow of money. Yesterday afternoon, he said the campaign raised $6.4 million over the Internet "in the last 24 to 30 hours," and will start airing television ads in several critical states today. "It's going to allow us to do everything we need to do," McAuliffe said.
Evan Tracey, an analyst who monitors political advertising, confirmed that the Clinton team had placed new orders for ads in Maine, Nebraska and Washington state. But Obama has had commercials airing for several days in large television markets in the District, Maryland and Virginia, as well as Louisiana, Nebraska and Washington state, Tracey said. The senator from Illinois has also gotten a fundraising bounce out of the Feb. 5 contests, raising more than $7 million on Wednesday.
Michael Stratton, a Clinton fundraiser in Denver, said that while her loan may have given donors jitters about the financial health of the campaign, it also motivated them to reach back into their pockets.
"I think there was this assumption she's a money machine and will be able to raise whatever she needs," he said. "I think there are people who thought, 'Whoa. I guess we've got to rally here.' "
Clinton was able to draw on her joint bank account with her husband to make the loan. Last year, Hillary and Bill Clinton cashed out a blind trust with stock holdings valued at $5 million to $25 million, with the aim of avoiding conflicts of interest during the campaign, Clinton aides said.
More recently, the Wall Street Journal has reported that the former president will collect about $20 million in a deal to end his business relationship with the investment firm of billionaire friend Ron Burkle. Burkle is also a top fundraiser for Hillary Clinton's campaign.
Aides also noted that she reportedly received $8 million from the publication of her autobiography in 2003.
There had been signs of belt-tightening even before the loan was made. Clinton officials have shared hotel rooms -- an inconvenience that wealthier campaigns do not force upon exhausted staff members -- and Clinton has brought media representatives with her on every leg of her travels, which can help defray transportation costs (although it creates inconvenience).
A senior campaign official reported being told last month that McAuliffe was unhappy about falling behind Obama in fundraising, although McAuliffe did not say so publicly and yesterday called the campaign's current condition "spectacular" when speaking with donors.
During Clinton's 2006 Senate race, several high-ranking aides voiced concerns about loose financial controls over such things as office supplies and advertising. The current campaign appears to be run more frugally, with headquarters in Virginia rather than on K Street. But the campaign's latest reports still show unusual expenditures, such as nearly $500,000 last year for parking costs.
A review of both campaigns' financial filings show they aggressively spent money last year. Both spent more than $80 million before heading into the January primary season, including similar amounts on travel and events. Obama spent more on television advertising and field staff. Clinton spent nearly $4 million on political and media consultants; Obama spent about $1.4 million.
What changed in 2008, Clinton aides said, is that Obama has escalated his spending substantially. Even after Clinton decided to lend the campaign money, Obama outspent her on television advertising. Tracey estimated that Obama spent $16 million from Jan. 7 to Feb. 5 and that Clinton spent $12 million.
Susie Tompkins Buell, a bundler for Clinton in California, said she remains optimistic, even though many donors she has contacted have given the maximum allowed. "The campaign has gone on much longer than any of us expected," Buell said. "I think now we are in the position of looking for the little checks. We're trying to find out how best to do that." The Clinton campaign reported attracting 40,000 new online donors yesterday.
Staff writer Anne E. Kornblut and database editor Sarah Cohen contributed to this report.

This Guy is Right On The Money

Ed Martin says [and I agree] : "I completely agree with the premise of the show, which is you should enjoy the wines you drink. One of the things I hated about working in the wine industry was the attitude that some people have about wines. My attitude has always been, if you like how it tastes, continue to drink it, no matter how inexpensive it costs, where it was made, how it was made, and who made it. Everyone has different tastes (and differing number of taste buds). Good wineries can make bad wine. Inexpensive wines can be good.At any rate, Fred Franzia was really funny. His stance is very anti-wine snob, but the guy is a consummate marketer. He knows the majority of folks that drink his wines are not wine enthusiasts. Most are probably intimidated by wine snobs. He plays the anti-wine snob role very well to sell his wines. Coincidentally, Fred Franzia and Michael Mondavi were roommates at Santa Clara. Both are really good at marketing, but Fred's got the edge here."

TIME Poll: Clinton More Beatable than Obama

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Fred Franzia wants Everyone to enjoy wine: The miracle of "Two Buck Chuck”

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