A Guide to Cutting Through the Fundraising Talk

June 29, 2007

A week before the end of the quarter, campaigns begin furiously setting low expectations for themselves while raising the bar for others. Supposedly “internal memos” wiggle their way into reporters’ inboxes, warning against the media’s fixation on how much money has been raised and tamping down expectations. It can be difficult to decipher all the quotes swirling around from campaign aides, so we have compiled a small list. Feel free to contribute some more.

1. If an aide says the campaign “will be thrilled to raise X dollars”, they’ll handily beat the figure. Case in point: Barack Obama’s aides said “they would be thrilled to take $7 million to $12 million [in the first] quarter.” Actual amount: $25.8 million.

2. Similarly, if someone says “it will be a coup to raise Y”, count on a coup. Case in point: A Romney adviser said, “If we do $15 million [in the first quarter], it’ll be a coup.” Actual amount: $23 million.

3. Saying the numbers aren’t important signals poor results ahead.  It accomplishes its goal of lowering expectations, but there’s no chance of spinning a good number as great.  Case in point: McCain strategist John Weaver said, “I worked for a candidate who blew everyone’s socks off in 1995”, referring to Phil Gramm.  “We didn’t get to New Hampshire.”  Actual amount: $12.5 million for the first quarter, behind Romney and Giuliani.

4. The disappointing, never boding well, “We’re in this for the long haul”.  Case in point: John Weaver commented, “We’re in this for the long haul.”  After the lackluster first quarter, finance director Carla Eudy left the campaign


Insider Trading on Intrade?

June 28, 2007

Intrade.com is a prediction markets website, where traders can bet on a number of things, including who will get the Democratic and Republican nominations. However, to the best of my knowledge, a person working for a campaign can trade based on insider information. Before a fundraising report beating expectations, a campaign worker could theoretically buy contracts for their candidate and profit on the ensuing spike.

Let’s take a look at an abnormal spike occurring on Intrade right now. In the last 24 hours, Rudy Giuliani has jumped from just over 28 to 32, nearly a 15% increase. The last week has been full of bad news for Giuliani, from his South Carolina chairman being indicted on drug charges to reports that he left the Iraq Study Group because the meetings conflicted with his paid speeches. There haven’t been any earth-shattering polls with huge leads for Giuliani: in fact, polls released over the last day show him trailing in Iowa, New Hampshire, and Georgia, and leading in Florida (by 6%), Ohio (8%), and Pennsylvania (14%).

Giuliani’s campaign has also stayed fairly mum on fundraising, with the speculation that he will meet or exceed his first-quarter totals. Although this may be natural volatility in the contract, I think Giuliani’s fundraising numbers will be better than expected.

Update: Yikes, Giuliani has now gone all the way up to 35, a 25% increase for the day. There has to be something good about to happen for the campaign. The last time Giuliani went up by more than 25% in one day was more than two years ago.

Update 2: Another development is McCain plunging dramatically from 8 to 4 in the last day.

Fundraising Watch – Republicans

June 28, 2007

In the first quarter, Mitt Romney donated $2.35 million to his campaign.  This quarter, spokesman Kevin Madden said Romney contributed a similar amount.  Campaign aides say Romney won’t beat the $20.8 million raised in the first quarter, but will break George W. Bush’s record take in the first half of 2000.  Note that the comparison is flawed, because the contribution limit was $1,000 back then, compared to $2,300 now.  Bush also didn’t start heavy fundraising until March, while Romney started with the New Year.

Romney’s numbers may also flag because of his limited donor pool in the first quarter.  He had 32,074 contributions, relying on a small base of maxed-out contributors.  This quarter, he needs to show he can expand his financial support.

Rudy Giuliani’s camp hasn’t talked about much fundraising buzz, but he will likely raise significant amounts after leading in most GOP national polls.  John McCain has been trying to ratchet down expectations, and it doesn’t appear as if he will match his paltry first-quarter effort of $13 million.

Fundraising Watch – Democrats

June 28, 2007

Barack Obama’s campaign has disclosed nearly 250,000 people have donated in the first half of the year.  More than 138,000 have contributed in the second quarter, although a campaign aide says the average contribution will likely be less than the roughly $247 in the first quarter.  Estimate the average donation at $215, multiply by 138,000, and you get a hefty $29.67 million.

Hillary Clinton also looks to do well, with aides saying she’ll beat her first-quarter effort.  Bill Clinton has been active earlier than planned (scheduled to attend at least 20 fundraisers this quarter) , providing another boost to her numbers.

The Huffington Post said anonymous sources from both candidates said Obama would out-raise Clinton for the quarter, but the report was denied by an Obama spokesman.

John Edwards has a goal of $9 million for the quarter, set in an email by Joe Trippi to supporters.  The campaign has said they only need $40 million by the year’s end, a target Edwards says he will meet.

In the first quarter, each of the three candidates set fundraising expectations differently.  Obama’s campaign predicted $7 million to $12 million, paling in comparison to the actual $25.7 million.  Edwards predicted $7.4 million, the record-breaking amount he raised in the first quarter of 2003.  The actual figure?  $14 million.  Hillary Clinton was the only candidate for which the predictions came close to the real figure: $25 million to $25.8 million.

Obama on the Air

June 25, 2007

Barack Obama starts airing two ads in Iowa, one focusing on his bipartisanship while the other takes a biographical form.  Note that both ads feature footage from his 2004 Democratic National Convention Speech.

The first one featured a Republican legislator, Kirk Dillard, who praised Obama’s ability to build bipartisan coalitions.  The second one focused on his time as a community organizer and passing over Wall Street to “devote himself to the community”, in the words of Laurence Tribe.

Supreme Court on Issue Ads

June 25, 2007

In a 5-4 vote, the Supreme Court just ruled issue ads can be aired up to election day, which can presumably be attack ads in disguise.  The case involved Wisconsin Right To Life, an organization prevented from airing ads two months before the 2004 elections.  The ad called on voters to contact the state’s two senators, Russ Feingold and Herb Kohl, and tell them not to filibuster President Bush’s judicial nominees.

Who benefits from this decision? In the first quarter of the year, Democrats raised more money than Republicans by a wide margin, reflecting their enthusiasm and the Republicans’ lackluster.  The Democratic presidential candidates raised $95 million, compared to the Republicans receiving a bit less than $60 million.  Democrats also outpaced Republicans in the House and Senate congressional committees, $32.7 million to $22.8 million.  Although this money can’t be used for issue ads, it shows the monetary advantages the Democrats hold this election cycle.  They are the ones who will likely benefit from this ruling.

Good News for Giuliani

June 25, 2007

Now, both New Jersey and New York are likely to have winner-take-all primaries on the Republican side, a move tremendously helpful to Rudy Giuliani.    In the RCP average, Giuliani is up by almost 28% in New Jersey, and he has shown a commanding lead in New York polls.

One thing I don’t like about winner-take-all primaries is that it moves the primary process closer to the Electoral College.  Since the Electoral College system isn’t going to change, the primary process should be preserved with delegates awarded in proportion to candidates’ support.

It remains to be seen if the Democrats do the same thing in the two states, which would boost Hillary Clinton (up by 18% in NJ).