Money Slip Hurts McCain Bid

By MARY JACOBY
The Wall Street Journal
July 3, 2007; Page A4

WASHINGTON -- Sen. John McCain's presidential campaign fund raising tailed off in the last three months, raising questions about whether he will be able to stay in the race for the Republican nomination over the long haul to 2008.

Mr. McCain raised $11.2 million in the second quarter, down 14.5% from $13.1 million in the first quarter, top campaign aides said. Falling funding totals usually signal a loss of momentum.

QUARTERLY RECEIPTS
 
  1st Quarter* 2nd Quarter**
Clinton (D) $36.1 $27
Dodd (D) 8.8 3.25
Edwards (D) 14 9
Giuliani (R) 16.6 N/A
McCain (R) 13.1 11.2
Obama (D) 25.8 32.5
Richardson (D) 6.2 7
Romney (R) 23.4 N/A
*Total receipts; includes individual contributions, plus PACs and transfers. Transfers were significant in some cases.
** Preliminary
Sources: FEC, Opensecrets.org
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His campaign had believed it would raise more than $100 million this year; that assumption now has been jettisoned. "We made some incorrect assumptions about how much money we could raise," campaign manager Terry Nelson said. He declined to say how much he thought Mr. McCain would raise now.

Last week, Mr. McCain called speculation he would drop out of the race "ridiculous."

The campaign also reported having just $2 million cash on hand, a sign its fiscal discipline has been weak. Mr. Nelson announced staff cutbacks and salary reductions yesterday to bring costs into line with resources. Mr. Nelson, whose salary had been nearly $13,000 a month, added that he would work without pay for a few months.

He attributed the low fund-raising numbers to Mr. McCain's "principled stands" over the years against wasteful government spending and corporate donations to political campaigns. "That doesn't always make us the favorite candidate of the special interests," said Mr. Nelson, a top strategist for President Bush's 2004 campaign.

To be sure, it is still early in the campaign, and Mr. McCain's fortunes could turn. Eventual nominees don't always win the money race every quarter; the eventual Democratic nominee in 2004, John Kerry of Massachusetts, loaned his campaign $6.4 million after one poor fund-raising showing during the primary campaign.

Yet Mr. McCain lacks the same vast personal wealth to draw upon as Mr. Kerry did. Moreover, he placed third in the Republican fund-raising race in the first quarter, after former Massachusetts Gov. Mitt Romney, who raised $23.4 million, and former New York Mayor Rudy Giuliani, who raised $16.6 million. Messrs. Romney and Giuliani haven't reported their second-quarter fund-raising totals.

Democrat Barack Obama racked up $31 million in the second quarter through Internet solicitations and other less traditional fund-raising methods that target small or first-time donors. His fund-raising strategy shows candidates don't have to rely on support from big industries and companies looking for legislative favors.

Mr. Nelson also acknowledged the fallout from Mr. McCain's high-profile advocacy for the recent failed immigration-reform package in Congress. The senator has been courting voters from the Republican Party's right-leaning base, but many of those voters were furious with what they called an attempt to offer "amnesty" for illegal immigrants.

Mr. Nelson said Mr. McCain would focus on winning traditional early primary states such as New Hampshire as a springboard to Feb. 5, when primaries are held in more than 20 states, including New York and California. But his campaign laid out no plans for that important date.

Write to Mary Jacoby at mary.jacoby@wsj.com