Small donors give big to Obama

Sen. Barack Obama relied on donors large and small to seize the lead in the presidential money race, and far outpaced his rivals by tapping people who give less than $200, his campaign finance report filed Sunday shows.

The Illinois Democrat disclosed that $9.7 million of the $33 million he raised in the second quarter of 2007 came in increments of less than $200 -- an unusually large number and one that surprises campaign finance experts.

“This is a very powerful start,” said Michael J. Malbin, executive director of the Campaign Finance Institute, a Washington group that has been particularly interested in the comparison between large and small donors.

Obama raised $58.5 million in the first half of the year, a record for a presidential candidate in the first six months of the year leading up to election year. His chief rival, Sen. Hillary Rodham Clinton (D-N.Y.), is close behind at $53 million.

As of June 30, Obama had $36.2 million in the bank; Clinton had $45 million. She boosted her account by transferring $10 million she raised in previous years. Under federal campaign law, not all money is treated the same. Obama has $34 million that he can use in the primaries, slightly ahead of Clinton’s $33 million.

Clinton ended the first half of the year owing $3 million to consultants and vendors, more than any other candidate. Obama had $923,000 in unpaid bills. Candidates often delay paying bills to create the perception that they have more money.

On the Republican side, Sen. John McCain (R-Ariz.), once considered the party’s front-runner, had $3.2 million in the bank as of June 30. But if his $1.8 million in unpaid bills were subtracted, he would have about $1.4 million, a paltry sum after raising $25 million this year. McCain drastically cut the size of his campaign staff last week.

Former New York Mayor Rudolph W. Giuliani, leading in the polls among Republicans, ended the first half of the year with $18.3 million. Former Massachusetts Gov. Mitt Romney had $12.1 million. They filed their reports on Friday, ahead of the Sunday deadline.

Despite trailing in polls, Obama has shown unprecedented fundraising strength, pulling in $360,000 a day during the second quarter, of which $100,000 came in small donations. He has received money from nearly 260,000 people this year -- far more than any other candidate.

“He has their names and their addresses,” Malbin said. “Once they give a little bit, they are more likely to give more and to volunteer for his campaign.”

Federal law permits each contributor to give $2,300 for the primary, and $2,300 for the general election. If each of Obama’s donors were to give the maximum, he would have far more than the nominee is likely to need.

In an indication that he is raising large sums from small donors, about 45% of Obama’s money came in increments of less than $1,000 in the second quarter. In the first 90 days of the year, 32% of his money came in sums of less than $1,000.

Clinton, by contrast, raised 86% of her money from large donors in the first quarter. About 90% of Giuliani’s money comes from donors who gave $1,000 or more.

Not all of Obama’s money comes in nickels and dimes. He raised more than $1 million from people who identified themselves as chief executive officers and other company executives. Giuliani received more from such people than other candidates: $2.3 million.

Obama received donations from people who work for defense contractors, health insurance companies and energy producers. Although Obama does not take money from lobbyists, he continued to accept donations from law firms that have major lobby operations in Washington.

He raised more than $1 million from lawyers, at least $5,600 of which came from partners at Giuliani’s law firm, which itself has a lobby arm. Obama raised large sums from investment houses, including $28,000 from Romney’s old private equity and consulting firms, Bain & Co. and Bain Capital. Citigroup employees gave him more than $85,000.

Candidates are not required to identify donors who give less than $200. But a review of his donations of $200 and above shows Obama relied heavily on California, his largest source at $4.2 million. His home state of Illinois chipped in second most, at $3.3 million. He took $3.1 million from New York and $1.1 million from Washington, D.C.

Former Sen. John Edwards of North Carolina placed third among Democrats, ending the first half of the year with $13.3 million in the bank, of which $12 million could be used for the primaries. Edwards’ fundraising dropped in the second quarter to $9 million, after he raised $14 million in the first 90 days of the year.

Edwards has relied heavily on the online fundraising company ActBlue. Donors have used ActBlue to earmark $3.4 million for Edwards this year. The bulk of donations funneled through ActBlue were in small denominations.

Edwards’ richest state was California, at $1.3 million. He raised 23.5% of his $9 million in Southern states. Obama raised less than 14% of his money in the South.

If Edwards had raised such sum in any past election, his haul would have placed him in rarified air. But this election is expected to cost the Republican and Democratic nominees a combined $1 billion or more.

“It is a very impressive number except he has to run against the others,” Malbin said.

Among the other Democrats, New Mexico Gov. Bill Richardson relied heavily on the Sunbelt as he raised $7 million in the second quarter, and had $7.1 million in the bank.

Richardson’s biggest source of money, $1.37 million, was New Mexico, where he wields power over legislation and can make political appointments. He raised a combined $3 million in his home state, plus Texas, Arizona, Nevada and California, which was his second-richest state at $850,000.

Richardson has pushed hard for money from Indian tribes that own casinos, and tapped two California tribes with large gambling operations: $2,300 from the Sycuan band near San Diego and $2,000 from the Morongo Band of Mission Indians outside Palm Springs.

Other candidates’ filings include:

* Sen. Christopher Dodd (D-Conn.), who had $6.4 million in the bank, after raising $7.3 million in the first six months. Sen. Joseph Biden (D-Del.) had $2.77 million in the bank, after raising $4.5 million.

* Rep. Ron Paul (R-Texas) had $2.35 million, after raising $3 million in the first half of the year. Sen. Sam Brownback (R-Kan.) had $460,000, after raising $2.7 million in the first six months.

dan.morain@latimes.com

doug.smith@latimes.com

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Times researchers Maloy Moore and Sandra Poindexter contributed to this report.