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Clinton Donors Worried by Campaign’s Spending

By MICHAEL LUO, JO BECKER and PATRICK HEALY

Nearly $100,000 went for party platters and groceries before the Iowa caucuses, even though the partying mood evaporated quickly. Rooms at the Bellagio luxury hotel in Las Vegas consumed more than $25,000; the Four Seasons, another $5,000. And top consultants collected about $5 million in January, a month of crucial expenses and tough fund-raising.

Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.

“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”

The high-priced senior consultants to Mrs. Clinton, of New York, have emerged as particular targets of complaints, given that they conceived and executed a political strategy that has thus far proved unsuccessful.

The firm that includes Mark Penn, Mrs. Clinton’s chief strategist and pollster, and his team collected $3.8 million for fees and expenses in January; in total, including what the campaign still owes, the firm has billed more than $10 million for consulting, direct mail and other services, an amount other Democratic strategists who are not affiliated with either campaign called stunning.

Howard Wolfson, the communications director and a senior member of the advertising team, earned nearly $267,000 in January. His total, including the campaign’s debt to him, tops $730,000.

The advertising firm owned by Mandy Grunwald, the longtime media strategist for both Mrs. Clinton and Bill Clinton, the former president, has collected $2.3 million in fees and expenses, and is still owed another $240,000.

“Fees and payments are in line with industry standards,” Mr. Wolfson said. “Spending priorities have been consistent with overall strategic goals.”

But some Democrats are now asking if the money spent on a campaign that appears to be sputtering — $106 million so far — was worth it.

“It’s easy to be critical, but had she won Iowa, none of this would have mattered. It wouldn’t have mattered what she spent because money would have come pouring in,” said Hank Sheinkopf, a Democratic political consultant and a veteran of Mr. Clinton’s successful 1996 re-election bid. “But the fact that she did not has made everyone focus on where the dollars went — and where they think the money should’ve gone.”

Mrs. Clinton came into January with a cash advantage over Mr. Obama, with about $19 million available for the primary, compared with about $13 million for him. She wound up spending at roughly the same rate as Mr. Obama, about a million dollars a day, but because she performed dismally compared to him in raising money, she ended the month essentially in the red and was forced to lend her campaign $5 million, while he had $19 million for the coming contests.

Over all, Mrs. Clinton has spent more than $35 million on media, polling and consulting. A comparison with Mr. Obama’s spending is difficult because of the ways the campaigns labeled expenses, but it appears he spent about $40 million in those areas.

In other notable expenditures during the lean month of January, Mrs. Clinton paid $275,000 to Sunrise Communications, a South Carolina firm that was supposed to turn out black voters for her and collected nearly $800,000 in total. She lost that state to Mr. Obama by a wide margin. Even small expenses piled up in January: the campaign spent more than $11,000 on pizza and $1,200 on Dunkin’ Donuts runs.

Mr. Penn, the chief strategist, said in an interview that, since 2001, he no longer owned any of the political consulting firm of Penn, Schoen and Berland Associates. He said the firm’s fees were capped at $20,000 a month and that the “great bulk” of the payments went for direct mail.

Joe Trippi, who was a senior adviser to John Edwards’s presidential campaign, said he believed that the Clinton team had made two fundamental errors.

First, he argued, Mrs. Clinton built a top-down fund-raising operation that relied on a core group of donors to write checks early on for the maximum amount, $4,600 for the primary and the general election, which left few of them to go back to when money became tight. Mr. Obama, by contrast, focused on building a network of small donors whose continued ability to give has been essential to his success this winter.

And second, Mr. Trippi said, the Clinton campaign spent money as though the race were going to be over after a handful of states had voted and was not prepared for a contest that would stretch for months.

“The problem is she ran a campaign like they were staying at the Ritz-Carlton,” Mr. Trippi said. “Everything was the best. The most expensive draping at events. The biggest charter. It was like, ‘We’re going to show you how presidential we are by making our events look presidential.’ ”

For instance, during the week before the Jan. 19 caucuses in Nevada, the Clinton campaign spent more than $25,000 for rooms at the Bellagio in Las Vegas; nearly $5,000 was spent at the Four Seasons in Las Vegas that week. Some staff members also stayed at Planet Hollywood nearby.

From the start of the campaign, some donors had concerns about the Clinton team’s ability to manage money.

Patti Solis Doyle, Mrs. Clinton’s presidential campaign manager until she was replaced on Feb. 10, also ran her Senate re-election bid in 2006. That campaign spent about $30 million even though Mrs. Clinton faced only token Democratic and Republican opposition.

“The Senate race spending in 2006 was an omen for a lot of us inside the campaign, but Hillary assured us that her presidential bid would be the best run in history,” said one major Clinton fund-raiser, who spoke on the condition of anonymity to discuss private conversations within the campaign.

Yet the Clinton campaign at times found itself spending money on items that were not ultimately helpful. As part of their get-out-the-vote effort in Iowa, the campaign came up with a plan to have a local supermarket deliver sandwich platters to pre-caucus parties. It spent more than $95,384 on Jan. 1 at Hy-Vee Inc., a local grocery chain in West Des Moines, Iowa, in addition to buying loads of snow shovels to clear the walks for caucusgoers. Mrs. Clinton came in third in the Jan. 3 caucus. It did not snow.

Mr. Obama’s fund-raising surged after his Iowa victory. In January, he brought in more than $2.50 for every $1 she was given, and from Jan. 5 to Feb. 5, Mr. Obama spent nearly $16 million on political advertisements — more than $4 million more than Mrs. Clinton, according to a survey by the Campaign Media Analysis Group at TNS Media Intelligence. Mr. Obama broadcast 3,000 more advertisements than she did, and he was able to air those ads not only in the states that were immediately up for grabs but also in contests on Feb. 5 and beyond.

For instance, Mr. Obama spent nearly $480,000 on 1,331 spots in Missouri; he won the state’s primary, a closely fought contest and a national political bellwether, by one percentage point.

Mr. Obama’s campaign is not without highly paid consultants. His top media strategist is David Axelrod, whose firm received $175,000 in January and has collected $1.2 million over all. Mr. Obama’s polling is spread between four firms that have received $2.8 million collectively.

“Obviously, some campaigns are more careful and wise with their money than others,” Jim Jordan, a Democratic consultant who ran John Kerry’s presidential campaign until November 2003. “But these budgetary post-mortems tend to follow a familiar pattern; winners are by definition smart, and losers are dumb and wasteful. In truth, campaign budgeting is hard and complicated and three-dimensional and just impossible to understand without the full time-and-place context of the whole race.”

Source:  New York Times

This article was reported by Michael Luo, Jo Becker and Patrick Healy and was written by Mr. Healy.

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