Clinton Campaign Bills Stacking Up

Hillary Clinton

Sen. Hillary Clinton (D-NY) addresses the AFL-CIO Biennial Convention at the Sheraton Philadelphia onApril 1, 2008 in Pennsylvania. William Thomas Cain/Getty Images hide caption

itoggle caption William Thomas Cain/Getty Images

Sen. Hillary Clinton's (D-NY) campaign lately has run into trouble paying its bills, while it also tries to fund major media buys and maintain a hectic schedule that spans several states.

But vendors who work with presidential campaigns say this is not unusual for a candidate.

The trouble for Clinton began back in Iowa, when the state caucuses were just a few days away, and her campaign planned a last-minute reception in Cedar Falls at the Gallagher Bluedorn Performing Arts Center at the University of Northern Iowa.

"They booked it about three days ahead," says Chris Kremer, events management director at the center.

Kremer had experience with campaigns and their bill-paying habits, so he asked the Clinton advance team to pay the $1,505 fee by credit card. They refused and told him to invoice the campaign. He did so, and after a month passed without payment, he picked up the phone.

"I called them and had asked that we get payment squared away, and they said, 'We'll get that taken care of,'" Kremer says. "And then it was another month later that I called again and they said, 'Oh yeah, it's been posted.' And then, about two days later I received a request for a taxpayer identification number, and then within a couple of weeks I did finally receive a check."

Kremer says the check finally arrived in mid-March.

Similarly, the campaign settled up for a New Year's Eve event in Des Moines last month. The caterer says she left many phone messages, all unreturned; her husband had been weighing legal action before the $1,000 bill was paid.

There are plenty of other unhappy creditors. While the Clinton campaign has been paying most of its bills on time, it was carrying $8.7 million in debt on Feb. 29 — more than the combined debts of Sen. Barack Obama (D-IL) and Sen. John McCain (R-AZ).

It is a hard irony for a candidate who, at the outset, was expected to be flush with cash. Experts say Clinton was plugged into the most lucrative networks of Democratic money. She proceeded to break records for fundraising, but she's also spent heavily while Obama has bested her in the money race. He managed to gather small contributions in quantities no one believed possible before this race began.

Even as the Clinton operation catches up on overdue bills, it is also struggling to keep ads on the air leading up to the April 22 Pennsylvania primary — not to mention in other primary states that come after, including North Carolina and Indiana.

As a group, presidential candidates don't have the best credit rating.

"Candidates blow in, they spend a lot of money to have a rally, they blow back out and you never see them again," says Nancy Bocskor, a Republican fundraising consultant. "Years ago, the phone companies started getting very smart and required very large deposits, so they could actually get their money back."

In addition to consulting, Bocskor teaches fundraising at George Washington University's Graduate School of Political Management. She says Clinton's plight came up in class just last night.

"This one student kept going, 'Well, can't she go to her Senate race and raise more money and transfer money from the Senate race to the presidential?' And I'm going, 'No, that's money laundering.' So it was very interesting to hear — particularly a couple of the students trying to figure out what Hillary would put together," says Bocskor.

Last month, Clinton's temporary solution was a $5 million personal loan to the campaign.

Randall Adkins, a political scientist at the University of Nebraska at Omaha, expects that she will make another loan soon, if she hasn't already. (Financial disclosure reports for March are due April 20.) Another infusion of cash would let her campaign go all out in Pennsylvania.

"This is perfect timing for her to be able to win Pennsylvania and then continue to campaign," Adkins says. "If she were having to compete on April 22 in five different states, I think she would be very hard-pressed to continue to the campaign."

After Pennsylvania, he says, either Clinton wins and her fundraising picks up — or not.

By lending her own money, she's following other wealthy politicos in recent presidential primaries, including Republican Steve Forbes in 1996, Democrat John Kerry in 2004 and Republican Mitt Romney this year.

"They're not donating money to the campaign, they're loaning money to their campaign," Adkins says. "If like John Kerry they end up winning [the nomination], then they get paid back. If they end up losing, then it effectively becomes a donation."

But in any case, Clinton won't end up like former astronaut and Sen. John Glenn, who is remembered by campaign finance mavens as the poster child for the scourge of campaign over-reaching.

Glenn's White House bid in 1984 was as lavish as it was brief. It left millions of dollars of debt.

The Federal Election Commission finally closed the books on Glenn's campaign committee in 2006, 22 years after he ran. At the end, it still owed former staffers, a manufacturer of campaign buttons and various other creditors $2.68 million.

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