Opinion: Giuliani campaign’s got serious financial cracks

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Evidence is mounting that the campaign of former mayor Rudy Giuliani, once the national frontrunner for the Republican nomination, is in serious financial trouble that could adversely affect its ability to continue competing.

News emerged today that the campaign had ‘asked’ its top staff members to work without pay, at least for January and possibly beyond. The idea is to conserve dwindling financial resources to invest in the now crucial Florida campaign. But that is always a bad sign in politics.

Giuliani had based his nomination strategy on basically forfeiting early states like Iowa, New Hampshire and South Carolina, where his liberal social views might not have done well anyway...

in order to surge ahead in later states like Florida, which is packed with aging former New Yorkers, many expected to survive at least through the Sunshine State’s primary Jan. 29.

Giuliani’s late-state approach was seen as a risky, unproven strategy because it counted on no other clear winner emerging with momentum from earlier competitions. To Giuliani’s benefit, that’s exactly what has happened, with Mike Huckabee winning Iowa and John McCain capturing New Hampshire. ‘It’s working out great for us,’ Giuliani said after Thursday’s debate.

And the once-feared Mitt Romney has won only Wyoming and been forced to basically withdraw from Florida and South Carolina to compete hard with McCain in Michigan. And the campaign issues have also changed away from Giuliani’s strong suit, terrorism.

But no one was anticipating serious financial difficulties as a threat to Giuliani.

A Giuliani campaign news release today brought word that at the end of 2007 he had $12.7 million cash on hand, but only about $7 million of that could be used in the primaries. That is nowhere near enough to seriously compete in the 22 states that vote on Feb. 5.

‘He would appear to be in serious financial trouble,’ said Michael Schroeder, who is Romney’s California political director and, of course, has a stake in creating uncertainty about his rival’s future. Schroeder also pointed out to The Times’ campaign financial expert, Dan Morain, that unlike Romney, Giuliani had no vast personal fortune to draw on.

The former mayor launched his presidential bid with the goal of raising more than $100 million in 2007. He didn’t come even close. Nor did any Republican. Only Hillary Clinton and Barack Obama claim to have passed that figure. Figures for fourth-quarter donations, always the toughest money-raising quarter, are not due to be reported to the Federal Election Commission until the end of this month. But Ron Paul is believed to have been the most successful Republican fundraiser in that time period, raising almost $20 million and another reported $700,000+ so far this month.

By the end of September, Giuliani had gathered in only $44.3 million, with $16.6 million in the bank. Still, he put up a new ad today, promising to send Congress the largest tax cut in American history on his first day in office.

Anne Dunsmore, who was a Giuliani campaign aide in charge of fundraising until recently, told Morain, “He is going to be out of money every day and will replenish it every day. It is not prudent to be hoarding money at this point in a campaign. You raise money and spend it.”

Which is what you say if you have no dollar cushion.

Giuliani plans a series of West Coast fundraising events immediately after the Florida vote. Their dollar outcomes obviously will depend on Giuliani’s vote success across the country. And that will determine how far he can take the campaign toward that first day in the Oval Office and the largest tax cut in American history.

And if that doesn’t work out, he could always take the advice of the satirical newspaper The Onion and run instead to become President of 9/11.

-- Andrew Malcolm