Clinton, Short of Cash, Taps Her Own Coffers

Hillary Clinton's acknowledgment that Barack Obama, her rival for Democratic presidential nomination, is likely to outspend her during the rest of the primary season has some people wondering where the New York senator is going to scrape together enough cash to compete.

One clear sign of trouble: She's lending her own money to her campaign, a worrisome development for an organization that raised more than any other last year.

Clinton said during a press conference Wednesday that she loaned her campaign $5 million. "I believe the campaign would have a great month fundraising in January," she said. "We intended to be competitive and we were."

Campaign spokesman Howard Wolfson sent an e-mail to Politico.com explaining the loan further. "The loan illustrates Sen. Clinton's commitment to this effort and to ensuring that our campaign has the resources it needs to compete and win across this nation," the e-mail says. "We have had one of our best fundraising efforts ever on the Web today and our Super Tuesday victories will only help in bringing more support for her candidacy."

Clinton isn't the only candidate vying for the White House who loaned herself money. Republican Mitt Romney loaned his campaign $18 million in the fourth quarter, and $35.4 million for the year. Newly minted G.O.P. front-runner Senator John McCain of Arizona took out a $3 million loan in November.

However, Clinton's loan is particularly unexpected. She raised $115.7 million in 2007, far above the $75 million goal her campaign had set for the year. In the last three months of 2007, she collected $26.6 million, slightly less than she pulled in during the previous two quarters.

Obama matched Clinton nearly dollar for dollar last quarter, collecting $22.8 million. That brought his yearly total to $102.2 million. But Obama leapfrogged over Clinton last month when he announced that he raised about $1 million a day in January alone, for a total of $32 million. Clinton's camp says it raised $13.5 million in January.

Clinton's campaign advisers said Wednesday that they expect Obama to outspend their candidate in the upcoming primaries, much like he did on Super Tuesday.

To put a positive spin on it, Clinton chief strategist Mark Penn told reporters she was having a "record day" raising money over the internet on Wednesday. She needs the cash after spending about $9 million on advertising leading up to Super Tuesday, he said.

"We will have funds to compete," he said, "but we're likely to be outspent again." Following that up, the campaign sent out an email request to supporters to raise $3 million over the next three days.

Before the announcement of the loan, there was speculation about whether Bill Clinton would dip into his own millions to help his wife out. At a campaign stop in Iowa in December, he demurred. "They say you couldn't stop me from spending all the money I've saved over the last five years on Hillary's campaign if I wanted to, even though it would clearly violate the spirit of campaign finance reform," he said.

Penn on Wednesday said he didn't know if the Clintons had decided to use any of Bill's money. Their wealth is estimated to be between $10 million and $50 million.

But Bill's money isn't exactly up for grabs. Mark Malbin, executive director of the Campaign Finance Institute, says it's his understanding that normally, a married person can borrow on jointly owned property up to half the value of the property, but no more.

Senator John Kerry had that problem in his 2004 White House bid when he was the Democratic nominee and borrowed $6.4 million against the house he shared with his wife.

The fact that Hillary Clinton loaned herself money may not, in the end, hurt her all that much. "Money gives them the opportunity to present a message, then it's up to the people to decide if they want to hear the message," says Malbin.

by Liza Porteus Viana