Republican candidates spent money to make money
The huge infrastructure that President Obama is putting together for his reelection effort was already visible in the first few months of spending by his campaign, which doled out $10.5 million for a massive bricks-and-mortar operation based in Chicago. Obama for America spent $2.2 million on salaries alone, with another $707,000 going to computer equipment and software.
The priorities were different for his lesser-funded challengers, who devoted much of their resources to fundraising and travel as they raced around the country, trying to amass war chests for a primary battle that Obama will avoid.
A close examination of the first campaign finance reports by the 2012 presidential candidates provides a window into the operations and approaches of the various contenders: Former Massachusetts Gov. Mitt Romney favors lavish fundraisers at posh hotels such as the Four Seasons and Ritz Carlton. Texas Rep. Ron Paul’s campaign likes to dine at Jimmy John’s, a Midwestern sandwich shop.
“It’s fair to draw conclusions about how well they’re going to run something and what kind of lifestyle they want to lead” based on how the candidates spend money, said Democratic campaign veteran Steve Elmendorf. “Where you’re spending money should be about communicating with voters.”
For Minnesota Rep. Michele Bachmann, the emphasis in her first few weeks of campaigning was almost solely on filling her coffers. Of the $937,000 she has spent since her June 13 candidacy announcement, about 64% went to pay for fundraising-related expenses such as direct mail, telemarketing and consultants. By the end of June, she had yet to open a campaign office.
Her focus helped her raise $2.3 million in two and a half weeks. She began July with $3.6 million in the bank, thanks to her ability to draw from a previous congressional account that is now linked to her presidential committee. That means Bachmann is second only to Romney in terms of cash on hand among the Republicans, giving her an advantage heading into the potentially influential straw poll that will be held Aug. 13 in Iowa.
If Bachmann is putting together a campaign on the fly, Romney is benefiting from an organization that has been years in the making.
Much of the essential infrastructure of Romney’s current campaign — including computer and telecommunications equipment, website domains and voter databases — was purchased from the federal political action committee, Free and Strong America, that financed his activities before he declared his candidacy this year. The campaign paid more than $260,000 to Free and Strong America as it essentially absorbed the PAC’s resources.
Former Minnesota Gov. Tim Pawlenty, who also made ample use of his own Freedom First PAC before he started his campaign, paid his former committee about $8,500 for equipment and publications.
The filings also showed the outlays Romney used to court the donors that moved him to the front of the GOP money pack. A highly choreographed telethon at the Las Vegas Convention Center in mid-May cost the campaign more than $300,000 in hotels, food and other event-related expenses.
The campaign spent at least $180,000 for room rentals and catering for events at other upscale locales including the Four Seasons Hotel in Boston and the Beverly Hilton. In one instance, the campaign paid more than $2,500 to a Seattle catering company called Tuxedos and Tennis Shoes.
Of the $3,000 or so his campaign spent on travel-related food, many charges came from fast-food staples such as McDonalds, Burger King and Starbucks. Pawlenty’s campaign notched visits to well-known chain restaurants as well, including a stop in Iowa at a Godfather’s Pizza — a chain formerly run by GOP presidential hopeful Herman Cain.
Romney paid about $110,000 in rent for four campaign locations — in Boston, New York, Lexington, Mass., and in Manchester, N.H. Pawlenty’s rental bill was half that of Romney’s — about $50,000 — for offices in St. Paul, Minn., Urbandale, Iowa, and Amherst, N.H.
While former Pennsylvania Sen. Rick Santorum spent $5,824 on rent for an office in West Des Moines, the rest of the GOP field appeared to be running their campaigns largely from the road.
Of the $1.55 million Paul spent in the last quarter, $234,000 went to air charters. That was the second biggest expense for his campaign, after consulting fees and payroll, which amount to nearly $415,000.
Paul’s campaign spent $52.79 at Wal-Mart for event decorations and logged meal charges at restaurants such as Burger King and Cracker Barrel.
Former House Speaker Newt Gingrich, on the other hand, fell $1 million into debt by the end of the quarter. The campaign still owes more than $200,000 on a $700,000-plus bill from the Austin, Texas, firm hired to develop his website and email distribution platform.
Gingrich spokesman R.C. Hammond defended the campaign’s Web development costs.
“Reaching out to a voter online is just as important as reaching out to a voter in person,” he said. “It will be a cornerstone to how the campaign communicates with the coalition of supporters we’re building.”
Gingrich also paid nearly $160,000 for fundraising consulting and racked up about $500,000 in bills for private jet travel.
For his part, Cain spent nearly $450,000 on airfare and more than $100,000 on lodging, including stays at the Rancho Las Palmas Resort in Palm Springs and the Wynn resort in Las Vegas.
Obama, meanwhile, is “getting ready for a general election, not a primary,” Elmendorf said.
The campaign was investing early in a sophisticated operation to reach voters, spending $407,000 in website hosting and other technology last quarter. Nearly all of that money went to Blue State Digital, an online fundraising and advocacy firm cofounded by Joe Rospars, who is currently the campaign’s chief digital strategist.
Doug Smith and Maloy Moore in Los Angeles contributed to this report.
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