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THE NATION

Romney's and Giuliani's big-spending ways paying off

July 14, 2007|Dan Morain and Maloy Moore | Times Staff Writers

Republican front-runner Rudolph W. Giuliani is spending heavily in his pursuit of more money for his presidential campaign, while rival Mitt Romney is using his riches to win over voters in states where there will be early voting, campaign finance reports filed Friday show.

The candidates' tactics appear to be serving their ends. Giuliani was the one major Republican candidate who raised more money from donors in the second quarter of 2007 than he did in the first 90 days. And Romney is inching up in polls in Iowa and New Hampshire -- but at a cost. He spent $20.47 million in the second quarter of 2007 -- nearly all of the $21 million he raised in donations from others and loans to himself.

Romney's second-quarter spending was nearly twice the $11 million Giuliani spent. Altogether, Romney has burned through $31.8 million in the first half of the year, to Giuliani's $17 million, the midyear reports show.

"It is an absolute spectacle," said Craig Holman, a lobbyist for Public Citizen, a Washington group pushing for limits on campaign fundraising. "It is very sad that these candidates are running around the country trying to raise as much money as they can. We're all measuring them" by what they raise, Holman said.

Sen. John McCain (R-Ariz.), once the presumed GOP front-runner, is beset by fundraising difficulties and is not expected to file his second-quarter report until later in the weekend; the reports must be filed by Sunday. Democratic candidates also are not expected to file until Sunday.

As of the June 30 close of the second quarter, Giuliani had $18.3 million in the bank, after raising $33.54 million in the first half of 2007. Romney had $12.1 million. He raised more than $35 million from other people in the first six months of the year. By far the wealthiest candidate to enter the race, Romney has bolstered his bottom line by lending his campaign nearly $9 million, pushing his six-month total to $44.4 million.

In national polls, Giuliani consistently has been atop the Republican pack. Romney, the former Massachusetts governor, has lagged at about 10%. But after paying to air television ads in Iowa and New Hampshire, Romney is rising in surveys focused on those two states, where voting will take place in six months.

Indeed, Romney is significantly outspending Giuliani in all four early-voting states -- Iowa, New Hampshire, South Carolina and Nevada -- $2.33 million to less than $262,000 for Giuliani, the reports filed Friday show.

Giuliani is spending campaign funds in his quest to raise more money. In the second quarter, the former New York mayor spent at least $2.2 million on fundraising consultants, catering, travel and related expenses.

In one of his biggest single travel costs, Giuliani paid $175,000 to fly aboard jets leased by Elliott Assets Management, a firm affiliated with one of his largest campaign fundraisers, Wall Street financier Paul E. Singer.

Singer and people who work for Singer-related entities have donated at least $182,000 to Giuliani this year, a Times analysis of the candidates' receipts showed.

Under federal election law, candidates are permitted to fly on private jets and need only reimburse jet owners at first-class commercial airline rates, which amounts to a deep discount. The practice would be significantly restricted under proposed campaign finance overhauls pending in Congress.

"There is literally corporate money going to support these candidates, unless they pay the entire fare," said Holman, who is lobbying for the change. "It provides owners of the jets with unfettered access and allows them to provide a much-appreciated gift."

Giuliani campaign spokeswoman Maria Comella said the former mayor was following "all [Federal Election Commission] rules and regulations."

So far, Republicans have raised significantly less than Democrats, a phenomenon that can be attributed to the unpopularity of President Bush and the war in Iraq. Still, GOP fundraising and spending is setting Republican records.

At this point in the campaign four years ago, Bush had raised $35.1 million and spent $2.47 million. By the end of the second quarter eight years ago, Bush had raised $37.3 million and spent $7.2 million, according to data collected by the nonprofit Campaign Finance Institute in Washington.

Reports filed Friday and earlier this year show:

* Giuliani has relied heavily on Wall Street and his home state for money, raising $7.1 million in the first half of the year from New Yorkers, to Romney's $1.7 million.

* California is Giuliani's second-largest source of money, at $4.2 million, his reports show. California is Romney's largest source, at $5.5 million.

* Giuliani has raised $11.3 million in the Northeast region, to Romney's $6.2 million in the first half of the year. Giuliani, whose law firm is based in Texas, also has fared well in the South, raising $8.4 million to Romney's $6.6 million.

* Not counting the $6.5-million loan to himself in the second quarter, Romney raised $14 million from other people, a sharp drop from the almost $21 million he raised from others in the first quarter.

* Romney's second-richest source of money is Utah at $3.9 million, including $1.2 million in the second quarter. Utah has accounted for a mere $84,000 for Giuliani, most of which was raised in the first quarter.

Utah is the headquarters of the Church of Jesus Christ of Latter-day Saints, and Romney is a Mormon. Romney also is drawing on contacts he has as a founder of a Boston-based private equity company, and as son of a former governor of Michigan.

dan.morain@latimes.com

maloy.moore@latimes.com

Times researcher Sandra Poindexter contributed to this report.

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