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.