The Republican National Committee is busy this week doing damage control after its monthly financial report was filed with a nugget about a $1,900 tab run up by some donors at a topless nightclub. But beneath that furor lies another question: If the RNC is raising record amounts of money, why does it have so little of it left in the bank?
The RNC says one staffer went on the nightclub jaunt, submitted the bill as a committee expense, and has now been fired. But that was only the raciest bit of a West Coast trip by RNC Chairman Michael Steele and other party officials. Some other items cost considerably more than an evening watching simulated sex.
"You had more than $9,000 that was spent at a Beverly Hills hotel," said David Levinthal, communications director of the nonpartisan Center for Responsive Politics. "There was more than $6,500 that was spent at a Four Seasons hotel."
'A Risky Proposition'
These might seem like garden-variety gotchas on the expense account — except for this: The RNC is spending more money than it's raising. Since January 2009, the RNC has raised $109 million, but spent $115 million.
"It's a risky proposition. If you spend a lot of money and your fundraising operation is not keeping pace, then when it's crunch time — and you're really making your final push — are you going to be able to do it in a major way?" Levinthal said. "That's a question for the RNC right now."
RNC spokesman Doug Heye says Steele has a strategy, which is working.
"We have spent more money, and we've invested that, whether it's been in Virginia for the successful governor's race; whether it's been in New Jersey, also for that successful governor's race; Massachusetts, for Scott Brown's election," he said. "But then also in states that aren't really on people's radar screens yet."
That includes states such as Pennsylvania, with a state Supreme Court race that could affect redistricting in 2011.
Midrange And Large Donors
But the RNC also has problems on the income side of the equation. Steele has been pushing hard to enlist small donors, but midrange and big donors aren't so fired up.
"When you don't have that advantage of the White House or either chamber of Congress, that makes it more difficult to raise money," Heye said. "It means you have to prospect with mail a lot more. It means you have to be very creative in how you raise money. And unfortunately, that costs money, too."
In fact, it appears that the expense of small-donor fundraising has eaten up more than 40 cents of every $1 the RNC has raised since January 2009.
The RNC has garnered about $20 million more from small donors than the Democratic National Committee has. That reflects, in part, the disengagement of many liberals after President Obama was elected. But among high-dollar givers — those giving more than $200 — the Democrats have raised 50 percent more than the RNC.
All this leaves the RNC little time to switch gears if it wants to cut prospecting costs — and find a sales pitch that works on bigger donors with bigger checkbooks.