Why Was Obama Fundraising in California 30 Days Before the Election? He Needed the Money

A lot of people wanted me to make hay out of the DNC needing a loan for the stretch run while the RNC was flush with cash. Don’t get me wrong, this is a huge political story but says a lot more about overall party finances than the actual Obama campaign. It’s a huge boon for Romney since his campaign has smartly partnered with the RNC while Obama has always run his own siloed campaign seperate from the DNC.  Also, the DNC has never had a large war chest (Go Debbie!) and Obama For America (the official campaign) had an impressive war-chest all along, regularly out raising the official Romney campaign. Tim Carney was all over the exaggerated claims of the Obama campaign being outspent by Romney back in June.

But interestingly, in May, June, and July Obama was spending much more money than he was taking in (the “negative burn rate”) giving rise to concerns he wouldn’t have money in the stretch run to match Romney’s onslaught. And remember, Obama’s last 2 months of supposedly enormous fundraising, slightly outpacing the combined efforts of the Romney/RNC are based on incredibly sketchy (to choose a word randomly) and possibly illegal practices.

And then Obama spent a few very public days in California in early October shaking the money tree rather than stumping on the campaign trail which I found curious.  It’s not that Romney isn’t occasionally off the campaign trail fundraising, he did a fly by in New York this past week but still managed to stay on the trail with major campaign stops in the Battlegrounds. Obama was MIA from a battleground standpoint and focused solely on raising money.

Now we see the Obama campaign took out loans from Bank of America in September to cover campaign expenses.  The Washington Free Beacon has the scoop:

Obama For America took out a $15 million loan from Bank of America last month, according to the campaign’s October monthly FEC report. The loan was incurred on September 4 and is due November 14, eight days after the election. OFA received an interest rate of 2.5% plus the current Libor rate…Obama has a complicated relationship with Bank of America. The bank contributed $20 million toward the cost of the Democrat National Convention earlier this year. Bank of America stadium, home to the Carolina Panthers, was supposed to host Obama’s acceptance speech. At the last moment, the campaign switched to a significantly smaller venue…It is unclear why the first $1 billion campaign needed an extra $15 million for the final two months of the campaign.

The Obama campaign is quick to tout its alleged $88.7 million cash on hand at September 1, but what gives with this $15 million loan 3 days later?  The Obama campaign also claims they were net cash flow positive in September raising $126 million and spending $115 million.  So that’s a net $11 million to add to their cash on hand. So why the loan?

Campaign loans are not new but there is usually a good reason for them.  Mitt Romney cleverly took out a $20 million loan in August to fund the last days of his “primary” campaign ahead of his official nomination at the Republican Convention which unlocked massive amounts of additional funds. But a loan during the general election from a campaign allegedly flush with cash?

Something smells very wrong with Obama for America’s cash flow between the illegal fundraising and this oddly timed loan.

5 Comments

  1. No Tribe
    Posted October 20, 2012 at 10:33 am | Permalink | Reply

    It’s basically a way to pay it forward for an extra $15M. They know they can raise an additional $15M after the election, or that they won’t be able to spend all they have. In fact, they probably got the notion of doing this after Romney did it. I’ll bet that Romney does this too. He should do it though for even more, like $30M. He could easily pay it himself if needed. In fact, if he doesn’t do this now, I’d consider it poor strategy.

    • Jon
      Posted October 20, 2012 at 10:45 am | Permalink | Reply

      Not sure about the strategy. Hillary did this in 2008 and it backed fired heavily. Obama had to bail her out. One of the many reasons bill is in his corner.

      I’m thinking that the forecasting has them at a net negative in the coming weeks. $15m might be the shore up money on Nov6. Obama is spending heavy in the most expensive markets, eg Boston, Miami, and Orlando.

  2. stephanie
    Posted October 20, 2012 at 10:34 am | Permalink | Reply

    Both the DNC and Obama campaign are running their finances like they run the country’s finances, which explains why they are in the hole and RNC, Romney campaign have plenty cash on hand, funny how this works, even in a state level, a democrat governor always runs the state to the deficit, and republican govonors always can turn the state around with surplus. Coincedence? I think not.

  3. MikeN
    Posted October 20, 2012 at 11:34 am | Permalink | Reply

    Romney could just loan the money to his campaign directly. Or just spend it in Minnesota, Washington, Orgon, Illinois, California, New Mexico, New Jersey, New York, Maine, Connecticut, Delaware, etc.

  4. EpiphoneKnight
    Posted October 20, 2012 at 1:23 pm | Permalink | Reply

    I think the point is if Mitt wins not to pay it back and bankrupt Bank of America and see if Romney will bail them out or not. It’s political strategy for the Dems in 2016. Ok I’m kidding, but it sounded humorous enough.

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