Follow the Money: First-quarter Campaign Report Preview and Tip Sheet

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Every presidential campaign will be going full tilt until the last minute before midnight Saturday. That’s the deadline for first-quarter fundraising–and the first objective measure of how well they are doing at building the financial infrastructure to compete in a 2008 election where many experts say it will take $75 million or more just to mount a credible primary operation. The issue here, as with earnings reports on Wall Street, is not just how much you raise, but how well you meet expectations. So most candidates are making a last dash of fundraisers, and filling up the e-mailboxes of supporters and potential ones with fundraising appeals.

Officially, campaigns are not required to file their reports until April 15, but if they have good news to call attention to, you can bet they will start leaking their totals by the middle of the week. Those who turn up disappointing numbers will have to start reassessing whether they want to remain in the race.

Beyond the overall totals, there are other things to watch: How many donors did a candidate have–especially small contributors, who can give again? How much did they collect over the internet? How much are they spending? How much cash do they have on hand? And how much of their money is going toward the primary fight, as compared to the general election?

Though there are certain to be surprises, one thing already appears certain: The numbers will be big, dwarfing the previous first-quarter records in each party, which were set in 1999, when then-Vice President Al Gore raised $8.9 million and then-Texas Governor George Bush raised $7.6 million. The fact that both went on to win their party nominations tells you something about how much of an asset this early money can be. But it’s not always a perfect indicator. In 2004, the first-quarter winner on the Democratic side was North Carolina Senator John Edwards, at $7-million-plus. It created enormous buzz, but also turned out to be a mirage. Most of that early money had come from Edwards’ fellow trial lawyers; in subsequent quarters, he wasn’t able to expand his financial base much further. His final totals were puny compared with both Vermont Governor Howard Dean and the ultimate nominee, Massachusetts Senator John Kerry.

This time around, the fast-forward primary schedule, with big states holding their primaries on Feb. 5, 2008, means that campaigns will be required to have national operations up and running by the third quarter of this year. That takes a lot of money–nearly all of which has to be raised in maximum increments of $2,300 per contributor. The benchmark for most candidates this period seems to be $20 million, with Democrats for a change expected to raise higher totals, thanks to the additional passion and intensity of activists on their side. In psy ops fashion, every campaign is talking down its prospects, while raising expectations for its rivals.

Here is the early buzz–some of which is certain to be wrong:

THE DEMOCRATS:

Hillary Rodham Clinton will blow out the competition, raising $30 million or even more for the quarter. (And this doesn’t count the $11 million or so that she can transfer from her Senate campaign account.) Barack Obama will disappoint if he fails to reach $20 million, while Edwards will make the over-under if he doubles his 2004 total. Also keep an eye on Connecticut Senator Chris Dodd, who has a ready supply of donors by virtue of his chairmanship of the Senate Banking Committee–a post he probably will continue to hold if he doesn’t make it to the White House, which makes his campaign a good investment for contributors, win or lose. Word is that Senate Foreign Relations Committee Chairman Joe Biden and New Mexico Governor Bill Richardson are struggling in the fund-raising race.

REPUBLICANS:

Though Arizona Senator John McCain has been doing his best to lower expectations, his aura of inevitability will be dented if he falls short of $20 million. Just as interesting is how much he is spending, given the fact that he has already put in place a large operation, with many high-priced consultants.

Expectations are also high for former New York Mayor Rudolph Giuliani, who presumably has a big base of financial supporters on Wall Street. A surprisingly strong finish for former Massachusetts Governor Mitt Romney, who has nearly neglible numbers in the polls but significant support within the party establishment, could establish him in the top-tier of credible contenders. On the other hand, low totals could have candidates like former Arkansas Governor Mike Huckabee and Senator Sam Brownback rethinking their own efforts.

NOTE TO READERS: This may be the last you’ll hear from me for the next week or so. I will be watching from afar, as I’m spending a week of spring break with Mr. Swamp and the Swampkids.

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