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Giuliani feels the squeeze

Staffers forgo their pay as he bets heavily on a victory in Florida.

January 12, 2008|Louise Roug, Dan Morain and Stuart Silverstein | Times Staff Writers

CORAL SPRINGS, FLA. — Rudolph W. Giuliani, once the front-runner for the Republican presidential nomination, said Friday that some of his staffers had started forgoing their salaries to ease the strain on the campaign's budget.

Giuliani told reporters at an appearance in Florida that the aides volunteered to defer their pay "to stretch the dollars even further." The former New York mayor has $7 million in hand to spend in upcoming primaries -- enough, his campaign said, to compete through the crucial Super Tuesday contests in more than 20 states, including California, Feb. 5.

Still, many political observers said the news signaled a surprising cash squeeze in a campaign that was thought to be managing its finances well. It also underscored Giuliani's sharp decline in recent weeks from front-runner to struggling contender, they said, while renewing questions about the wisdom of his decision to essentially take a pass on the earliest contests. The candidate has staked his prospects on winning in Florida on Jan. 29.

"He's in a tough spot," said John J. Pitney Jr., a politics professor at Claremont McKenna College and a former Republican National Committee staffer. "Up to now, Giuliani's fundraising appeared to be a major advantage, but . . . he's probably burned through a lot of money."

For The Record
Los Angeles Times Sunday, January 13, 2008 Home Edition Main News Part A Page 2 National Desk 1 inches; 32 words Type of Material: Correction
Giuliani campaign: An article in some editions of Saturday's Section A said Rudolph W. Giuliani spoke after a stop at a school in Coral Gables, Fla. He spoke in Coral Springs, Fla.

Campaign officials said that the budget situation dovetailed with their strategy of betting heavily on Florida and of using momentum from a primary victory here to galvanize fresh fundraising and support.

Giuliani, speaking to reporters after a stop at a school in the southern Florida community of Coral Gables, playfully said his campaign was using "a strategy of lulling your opponents into a false sense of security."

"Everyone has their own strategy," he said. "We think this is the best strategy, given our assets."

Anne Dunsmore, who until recently was Giuliani's deputy chief of staff overseeing fundraising, called it "standard fare" for senior campaign aides to defer pay in the heat of a contest. "On Feb. 10, if you had $5 million in the bank and you lost by 2 or 3 points, you'd be an idiot," she said.

Scott Klug, a former four-term Republican congressman who is a co-chairman for the Giuliani campaign in Wisconsin, said: "I don't think anybody is cash-flush at this point." He noted that even the fundraising leader among the GOP candidates, former Massachusetts Gov. Mitt Romney, suspended TV advertising in South Carolina and Florida on Wednesday in a money-saving move.

"Unfortunately, in politics, people like front-runners," Klug said, adding that if Giuliani wins in Florida, "the cash will come."

However, Giuliani's campaign strategy has looked questionable in recent weeks.

He has been overtaken alternately in national polls by former Arkansas Gov. Mike Huckabee and Sen. John McCain of Arizona. A CNN-Opinion Research Corp. poll released Friday showed Giuliani behind both rivals. In Florida, Giuliani's once-substantial edge is gone.

In Tuesday's New Hampshire primary, Giuliani -- who spent more than 40 days campaigning in the state -- finished fourth. Meanwhile, he has moved his small professional staffs out of Michigan and South Carolina, where GOP primaries will be held next week, to build his operation and boost his chances in Florida.

"If John McCain wins both Michigan and South Carolina, then Giuliani has a huge problem because they're competing for the same votes," Pitney said. "However, if McCain falls short, then Giuliani still has a big opening."

Giuliani started the campaign with the goal of raising more than $100 million in 2007, but he didn't come close. By the end of the third quarter, he brought in $44.3 million, with $16.6 million in the bank.

Still, that placed him second to Romney among Republicans -- albeit far short of the $100 million-plus raised by Sens. Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.).

Until Friday, "the assumption has been that Giuliani is the only Republican candidate besides Romney who had the financial resources to campaign all the way through," said Dan Schnur, a Republican analyst.

The amount Giuliani raised in the final quarter won't be known until Jan. 31, when candidates must file statements with the Federal Election Commission. According to Giuliani's campaign, he had $12.7 million in the bank as of Dec. 31, although under federal rules, only $7 million of that would be available for use in the primaries. The remainder has been earmarked for the general election.

Klug, the Wisconsin co-chairman, said Giuliani was upbeat in a Wednesday conference call with state campaign officials. The call, he said, "was largely to tell folks: 'We know this is a risky strategy. But so far it's played out exactly the way we wanted it to, with this very muddied picture on the Republican side.' "

The nation's biggest and most delegate-rich states have yet to vote. "So what's happened until this point has largely been a beauty contest," Klug said.

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