RNC May Face Cash Woes Despite Record Haul

The Republican National Committee says it raised $11.4 million last month, a record for March of a year with no presidential election, but that's a rare bright spot in the overall outlook for the national party.

Times are tough for the RNC. Even the new fundraising total is getting dissed by the likes of Ben Ginsberg, a prominent GOP lawyer and strategist.

"What matters in terms of their political effectiveness is how much cash on hand they actually have," Ginsberg said. The cash the RNC has on hand is pretty much what it took in; it's the smallest March reserve of any year since 2000.

Nightclub Controversy

The committee has other problems, too: the wealthy young donors who went to a leather-and-chains nightclub on the RNC's tab; the ouster of party Chairman Michael Steele's chief of staff; and the departure of some old-guard advisers.

Tony Perkins, head of the Family Research Council, said social conservatives should just stop writing checks to the RNC.

"If you can't run a party, you certainly can't run a country," Perkins said on MSNBC. "And I think they've got to show that they can run a responsible and efficient party" — or else, Perkins suggests, donors could look for someplace else to make their mark.

It's no idle threat. The RNC has new competition for Republican dollars.

"I think if donors conclude that a national party committee is not terribly efficient ... they're more likely to look around for other entities," Ginsberg said.

Other Challenges

Some of those entities are now gearing up for the fall.

The U.S. Chamber of Commerce says it will spend $50 million, the largest issue-advocacy and voter-education program in its history. American Crossroads — a new group created by Bush campaign strategist Karl Rove and former RNC chairmen Ed Gillespie and Mike Duncan — has a spending goal almost exactly the same as the chamber's: $52 million.

These twin pledges of similar size are not coincidental. Consultant Scott Reed, a former executive director of the RNC, says $50 million is "a real number. Not everyone will make that number."

"That really allows you to compete in 10 or 12, maybe 14 states at a very serious level of penetration," he said.

RNC's Future

Reed said American Crossroads wants to do the nuts-and-bolts campaign work that the RNC normally does, but he quickly added that the national committee won't go away.

"It's an organization that will survive this skirmish and will be rebranded by the next chairman and, more importantly, by the next nominee of the Republican Party," he said.

Still, the times and the campaign finance laws are changing, and both the Republican and Democratic national committees could suffer. The McCain-Feingold law of 2002 stopped them from taking corporate or union contributions or big checks from individual donors. It's a handicap that doesn't apply to groups like the Chamber of Commerce or American Crossroads. The Supreme Court ruled in January that such outside groups can use corporate and union money more freely for what are called independent expenditure ads.

"It's basically 'Katie bar the door' after the Supreme Court decision," said former Democratic U.S. Rep. Martin Frost of Texas.

The Democratic National Committee has a healthier base of large donors than the RNC these days, but Frost says even the DNC could be overshadowed.

"There are limits on how much you can give to a political party," he said. "So for really big money to be involved, it has to be in the form of independent expenditures. There's a lot at stake in this election, and a lot of money will be spent outside the party process."

The effects of this new political structure will last far longer than the legacy of one controversial party chairman.

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