Obama sets his own terms for the race

Freed from a serious fundraising constraint, Barack Obama is positioned to mount a general-election campaign on a scale the nation has never seen, fueled by hundreds of millions of dollars in private donations.

Having rejected public financing of his presidential bid Thursday, Obama now faces no legal spending limits after he emerges from the Democratic convention in August and moves to the final stage of the race against the presumptive Republican nominee, John McCain.

Obama turned down $84.1 million in federal money in opting out of the federal system -- the first major-party candidate to do so since it started in 1976. His campaign is betting it will collect far more than that from his donors.

The Illinois senator intends to use the extra money to re-draw the electoral map. He will run television ads in traditionally Republican states where he hopes to compete and deploy field operations in places Democrats are not supposed to win.

“It allows him to go broader and deeper than any prior candidate has been able to do from a financial basis,” said Don Sipple, a Republican political strategist.

McCain said Thursday that he would accept public financing, meaning he will be restricted to $84.1 million in direct spending in the two months between the Republican convention and election day.

He accused Obama of breaking a promise to abide by the federal spending limit. “This is a big deal, a big deal,” McCain said. “He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people.”

Obama’s ambitions are evident in a TV spot he rolled out Thursday. Called “Country I Love,” the 60-second ad is airing in 18 states, many of which -- including Colorado, Georgia, North Carolina and Virginia -- voted Republican in the 2004 presidential contest.

Though Obama’s decision made strategic sense, it left some good-government groups discouraged, predicting it would only fuel the money chase in politics. Complicating matters for Obama, he wrote in a campaign questionnaire last November that he was committed to public financing.

“It’s a mistake; I’m sure he’s thinking more of his short-term advantage than the long-term success of his reform program,” said Steve Weissman, associate director for policy at the Campaign Finance Institute. “Even though he’s for fixing the public financing system, this could help erode support for that objective, because people will turn around and say, ‘Why do we need to fix it? It worked fine for the Democrats last time.’ ”

Obama’s campaign said the decision to reject public funding was tough. It is rooted in the unmatched success he has enjoyed in raising money. Through the end of April, Obama brought in more than $265 million, compared with less than $97 million for McCain, according to the nonpartisan Center for Responsive Politics.

Under the public financing system, McCain can raise and spend as much as he wants until he becomes the GOP nominee at the September convention. From that point, the Arizona senator can spend only the $84.1 million from a federal treasury fund. Taxpayers kick into the fund by voluntarily checking off a $3 contribution on their tax returns.

Obama’s already deep pool of about 1.4 million donors is expected to swell. He is now absorbing New York Sen. Hillary Rodham Clinton’s fundraising machinery, which will provide a jolt.

Obama’s senior staff met in Chicago on Thursday with a half-dozen of Clinton’s top fundraisers. Those in attendance included John B. Emerson of Capital Guardian Trust Co. in Los Angeles; Thomas F. Steyer of Farallon Capital Management in San Francisco; and Gary Gensler, who was Treasury undersecretary under President Clinton.

Clinton has called on 100 of her top fundraisers to meet with her and Obama next week in Washington, D.C.

Obama is also in a strong position because nearly half of his donors have given less than $200, according to the Center for Responsive Politics. Contributions to the general election are capped at $2,300, so Obama is free to go back to his small donors and ask for more.

Chris Kofinis, a Democratic strategist who worked for John Edwards’ 2008 presidential campaign, predicted that Obama could raise and spend $200 million in the “post-convention” period alone.

That kind of money would change the dynamics of the race. Obama can sink cash into historically Republican states, if he chooses, solely to force McCain to defend that territory.

Evan Tracey, head of the nonpartisan Campaign Media Analysis Group, said Obama’s strategy against Clinton in the Pennsylvania primary foreshadowed what he might do to weaken McCain. Obama’s forces did not expect to beat her, but they spent so much that Clinton was compelled to deplete her resources to preserve victory.

“He can complicate the McCain campaign’s electoral math,” said Tracey. “They can try to make any state in the country competitive.”

Anthony Corrado, a political scientist at Colby College, said Obama will be able to avoid the kind of tough choices that other candidates have faced in the final days of the campaign when they were burdened by federal campaign spending limits.

In 2000, Al Gore took down his ads in Ohio to spend more against Bush in Florida. And John F. Kerry did not respond as quickly as he might have in August 2004 to television ads that questioned his image as war hero because he was husbanding resources for the final months of the campaign.

It is unclear whether Obama will pay any political price with voters. Although his image is that of a reformer, he is turning away from a system meant to curb the influence of private money in politics.

When he answered the campaign questionnaire in November, he was asked by the Midwest Democracy Network whether he would take part in the public financing system. Yes, he replied, adding that if he became the nominee he would “aggressively pursue an agreement” with his Republican counterpart to “preserve a publicly financed election.”

An Obama campaign attorney, Robert Bauer, said Thursday that he met with a McCain lawyer earlier this month to discuss the matter but could not reach an agreement.

Obama took pains to explain his position, e-mailing a video message to supporters. Looking at the camera in jacket, tie and flag pin, Obama said the public financing system is “broken” anyway.

He suggested that the Republicans would exploit loopholes in the system by pouring money into outside entities that would subject him to “smears and attacks.”

Obama said, “The public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system.”

But some watchdog groups were not mollified.

Pointing to Obama’s answers to the questionnaire, David Arkush, director of Public Citizen’s Congress Watch division, said: “You can slice up his comments, but it’s pretty clear to everyone what he meant. No one thought he meant anything different. . . . It’s very disappointing.”

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peter.nicholas@latimes.com

janet.hook@latimes.com

Times staff writer Dan Morain contributed to this report.