Giuliani campaign's got serious financial cracks

Evidence is mounting that the campaign of former mayor Rudy Giuliani, once the national frontrunner for the Republican nomination, is in serious financial trouble that could adversely affect its ability to continue competing.

News emerged today that the campaign had "asked" its top staff members to work without pay, at least for January and possibly beyond. The idea is to conserve dwindling financial resources to invest in the now crucial Florida campaign. But that is always a bad sign in politics.

Giuliani had based his nomination strategy on basically forfeiting early states like Iowa, New Hampshire and South Carolina, where his liberal social views might not have done well anyway...

in order to surge ahead in later states like Florida, which is packed with aging former New Yorkers, many expected to survive at least through the Sunshine State's primary Jan. 29.

Giuliani's late-state approach was seen as a risky, unproven strategy because it counted on no other clear winner emerging with momentum from earlier competitions. To Giuliani's benefit, that's exactly what has happened, with Mike Huckabee winning Iowa and John McCain capturing New Hampshire. "It's working out great for us," Giuliani said after Thursday's debate.

And the once-feared Mitt Romney has won only Wyoming and been forced to basically withdraw from Florida and South Carolina to compete hard with McCain in Michigan. And the campaign issues have also changed away from Giuliani's strong suit, terrorism.

But no one was anticipating serious financial difficulties as a threat to Giuliani.

A Giuliani campaign news release today brought word that at the end of 2007 he had $12.7 million cash on hand, but only about $7 million of that could be used in the primaries. That is nowhere near enough to seriously compete in the 22 states that vote on Feb. 5.

"He would appear to be in serious financial trouble," said Michael Schroeder, who is Romney's California political director and, of course, has a stake in creating uncertainty about his rival's future. Schroeder also pointed out to The Times' campaign financial expert, Dan Morain, that unlike Romney, Giuliani had no vast personal fortune to draw on.

The former mayor launched his presidential bid with the goal of raising more than $100 million in 2007. He didn't come even close. Nor did any Republican. Only Hillary Clinton and Barack Obama claim to have passed that figure. Figures for fourth-quarter donations, always the toughest money-raising quarter, are not due to be reported to the Federal Election Commission until the end of this month. But Ron Paul is believed to have been the most successful Republican fundraiser in that time period, raising almost $20 million and another reported $700,000+ so far this month.

By the end of September, Giuliani had gathered in only $44.3 million, with $16.6 million in the bank. Still, he put up a new ad today, promising to send Congress the largest tax cut in American history on his first day in office.

Anne Dunsmore, who was a Giuliani campaign aide in charge of fundraising until recently, told Morain, “He is going to be out of money every day and will replenish it every day. It is not prudent to be hoarding money at this point in a campaign. You raise money and spend it.”

Which is what you say if you have no dollar cushion.

Giuliani plans a series of West Coast fundraising events immediately after the Florida vote. Their dollar outcomes obviously will depend on Giuliani's vote success across the country. And that will determine how far he can take the campaign toward that first day in the Oval Office and the largest tax cut in American history.

And if that doesn't work out, he could always take the advice of the satirical newspaper The Onion and run instead to become President of 9/11.

-- Andrew Malcolm 

Comments

[lnardozi]

Good for them, they'll get a taste of what they're driving voters toward for the next four years. When you're filling your car with $3 gas and buying some $2.65 a dozen eggs, remember who is running on stopping deficit spending. The war for oil is what caused prices for anything that eats grain to skyrocket. When THOSE prices rise, the fresh fruit seller raises his prices again, now you have some nice $5 a pound grapes in the market. It's YOUR money being spent. YOU'RE the one going to pay $250 a week for groceries. Still think Ron Paul sounds like a bad idea? He's the ONLY candidate, Republican or Democrat that is running on reducing your cost of living. Maybe you have plenty money. Me, I'm not so rich.

[Rhys]

Figured even Rudy stories need a comment.

(Very funny. Thanks for that.)

[Greggory DeVore]

Putting all of his eggs in one basket Rudy may have made a serious mistake. Consider the following:

If the primary contests were structured such that a winner (either by 1 vote or 5,000 votes) received all of the delegates, then one could truly declare a WINNER after each primary. However, since the majority of the state primary's delegate are portioned to each candidate based upon the popular vote, why does it matter who is first, or second, or third? It is the delegate count that matters. In New Hampshire McCain won by only a few percentage points. However, over 75,000 voted for Romney. Do you throw those votes to the wind and pretend that those who voted for Romney have no say in the process? The answer is no...they are rewarded with delegates representing their views to go the national convention.

Why not step back and watch the delegate count and understand that this is not about "winning" or "losing", but is about harvesting delegates for the grand finale.

[Jeffrey]

Looks like he's doing his own version of Howard Dean. Least Dean had substance.

[gao xia en]

Looks llike Giuliani has a piping-hot serving of Texas-style crow coming his way. I'm voting for Ron Paul even if he dies before the general election.

(Now, THAT is one committed Ron Paul voter!)

[gao xia en]

Excuse me for being partisan, but I think that Giuliani's going to be eating Texas-style crow pretty soon. Ron Paul has the cash to stay in to the end. I feel he has a better shot than Giuliani or Thompson. Once they drop out, as they will, he could see some real traction. At the very least he makes the Republicans debate real issues. He seems to be the only one that understands constitutional law and economics (Mises is brilliant). This is exactly how matters should be discussed during a political campaign.
At the very least Ron Paul can get 10% if he hangs on to the bitter end. That's influence at a brokered convention. And there's still the threat of a third-party run. He doesn't have to win, he just has to begin to break the machine.

[Wendi]

I have not been a fan of Rudy ever since Bush's re-election campaign where Rudy said your voting for terrorism if you didn't vote for Bush. Its great to talk about tax cuts.. but what programs are you going to slash since you won't be getting as much money? What programs and services do we lose? What is the trade off?