GOP Money Power Takes On Obama Fundraising

logo of the Republican National Committee i

The logo of the Republican National Committee. Brendan Smialowski/Getty Images hide caption

itoggle caption Brendan Smialowski/Getty Images
logo of the Republican National Committee

The logo of the Republican National Committee.

Brendan Smialowski/Getty Images

The presidential money race is turning into a closer thing than it first appeared.

While Democratic nominee Barack Obama surpassed Sen. John McCain in fundraising during the primaries, the McCain campaign is now benefiting from huge sums of money raised by the Republican Party and funneled toward advertising for the McCain-Palin ticket.

Obama — who opted out of public financing — had $77 million in the bank at the beginning of September.

McCain took $84 million in public funds, which must carry him to Election Day. The law says McCain cannot raise or spend more than that $84 million, while Obama has no spending limit.

But McCain has found a way to work around these limits. The Republican Party — and not his campaign committee — has paid for more than half of his campaign ads and outspent Obama on television in the first week following the conventions.

McCain is using an arrangement in which he is not collecting private money, while the Republican National Committee is.

An analysis released on Wednesday by the Wisconsin Advertising Project at the University of Wisconsin-Madison finds that the RNC helped pay for more than 55 percent of McCain's ads in the week after the convention. These are called hybrid ads — and they are legal.

Ken Goldstein is head of the Wisconsin Advertising Project. "There is absolutely nothing different in terms of content, tone or targeting from a completely candidate-sponsored ad and a hybrid ad. Indistinguishable," he said.

Goldstein says McCain's campaign does not have to worry about its own financing. The government took care of that.

"But it enables them to spend that additional money and retain control," he said. "And that's the key thing. A dollar you control is much better than a dollar you don't control, even if that other dollar is spent on your behalf."

How Hybrid Ads Work

The pioneer in using hybrid ads was President Bush in 2004. Democrat John Kerry quickly followed.

Now, McCain and the RNC have perfected the technique with an entity called McCain-Palin Victory 2008.

It is a joint committee to raise money for the RNC, four of the state Republican parties and the legal compliance committee for McCain-Palin, which pays for the campaign committee's lawyers and accountants.

Donors can give up to $67,800 each. All of the cash cycles back to help the McCain campaign rather than being diverted for other Republican candidate campaigns.

Legalities Of Party Funds

This works so well because the RNC is raising far more money than the Democratic National Committee. In its last official filings, the RNC had $75 million on hand — almost 10 times more than the DNC.

Public financing made it illegal for presidential candidates to raise money from ultrarich donors, at least for their own campaigns.

But critics say that's exactly what Obama and McCain ended up doing — raising money for these victory committees.

Rick Hasen teaches election law at Loyola Law School in Los Angeles. "Between all of the complex laws and regulations and Supreme Court opinions that rule over this area of campaign finance, we end up with some pretty perverse things," he said.

And McCain and Obama have gone from being champions of campaign reform to poster children instead. Fred Wertheimer, head of the watchdog group Democracy 21, says victory committees are a problem that needs fixing.

"The way they have been used in 2008 has made the case for shutting them down legislatively in the future," he said.

And here's the curious thing: That effort could give President McCain or President Obama a chance to reclaim his image as a reformer.

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