Analysis: Obama Money Dooms Current Public Finance

By Jim Kuhnhenn, Associated Press Writer

It wasn't Barack Obama's most critically acclaimed moment.

When the Democratic presidential candidate reneged on his pledge to take public financing for the general election, campaign watchdog groups and newspaper editorialists pounced. They all hoped he would help salvage a broken campaign finance system.

Instead, he created a whole new one, and he destined the current system of public financing to the trash heap.

On Sunday, Obama's campaign announced he had raised more than $150 million in September alone, a previously unimaginable fundraising rate of $5 million a day. Republican rival John McCain, who chose to participate in the public system, has been limited by law to spending only $84 million in September and October.

At Obama's clip, his fundraising will easily surpass the $650 million total spent by President Bush and Democrat John Kerry combined in 2004. Indeed, by using sophisticated new social networking tools to reach legions of small donors, Obama has already exceeded the forecasts of some campaign finance seers who two years ago were predicting the two parties' nominees would each spend about $500 million.

The extraordinary sum vindicated Obama's decision. It also made a public finance system born after the excesses of the Watergate era look decidedly quaint.

"People will look back at 2008 as the year that Barack Obama once and for all destroyed public financing as we know it," said Todd Harris, a Republican strategist who worked on McCain's 2000 presidential campaign. "It will be very difficult four years from now for any candidate to make the case that they should participate in public financing given the obvious financial advantage that Obama has received by opting out."

But while Obama has rewritten campaign finance rules with his use of technology and personal outreach, he has also taken advantage of a changing social and political landscape that suited his message and his celebrity. As a result, his campaign says, he has 3.1 million donors, with more than 600,000 new ones contributing just in September.

Obama reached them through Facebook and MySpace, by e-mail and by phone text. A purchase of Obama merchandise on the Web guaranteed you a place as a donor; so did attendance at his popular and crowded rallies. Those donors, in turn, were encouraged to reach out virally to even more.

"He has developed a donor base that is comparable to what we would consider a donor base for a national political party," said Anthony Corrado, a political scientist and an expert on political money at Colby College in Maine.

But advocates of a public finance system aren't eager to give up on a system that relies on voluntary taxpayer contributions on their annual tax returns. And while Obama backed away from his promise to take public money if McCain did, they want him to live up to his pledge to fix the system if he becomes president.

"The question for Democrats is will they decide to go forward with something that is not to their immediate advantage," said David Donnelly, director of Campaign Money Watch.

Whether other politicians could replicate Obama's feat is certainly an open question. But political campaigns tend to model themselves on the last successful effort. If Obama goes on to win the White House, his fundraising model will be the first chapter in future campaign playbooks.

"The experience of this campaign will lead to a retrospective evaluation that McCain made a mistake in opting in (for public financing) and that Obama did the right thing by opting out," Corrado said.

Some Republicans have argued that McCain's selection of Sarah Palin as a running mate so galvanized the Republican base that he might have been able to raise more money for the general election than the $84 million he received.

But McCain and Obama have operated on separate tracks. McCain's fundraising apparatus was not set up like Obama's and McCain has never shown an affinity for fundraising anyway.

Instead, he has had to rely on the Republican National Committee to supplement his restricted finances. And while their combined forces had given them some parity with Obama and the Democratic National Committee, Obama's September performance amounted to a fifth gear that the GOP simply didn't have.

Obama's fundraising advantage has been evident for some time. He is outspending McCain and the RNC by more than 2-1 in advertising; without the RNC, he's outspending McCain nearly 4-1 in TV ads. He's been able to expand the field of competitive states to typically Republican states and secured his standing in typically Democratic states.

Still, it's easy to overstate the significance of Obama's millions. His success so far in national and state public opinion polls also reflects a toxic political environment for McCain and Republicans. Bush's unpopularity and the crisis in the financial markets have hurt Republican candidates up and down the ballot.

And finding the key to unleash a torrent of small donors is only part of a successful political equation. Howard Dean surged as a candidate with his unprecedented Internet fundraising in advance of the 2004 Democratic presidential primaries. He lost.

See the article on Associated Press website

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