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MEMO: Less Money, Mo Problems

- February 11, 2016

TO: Interested Parties
FROM:     Raj Shah, RNC Research Director and Deputy Communications Director
RE: Less Money, Mo Problems
DATE: February 11, 2016

 

Following her crushing loss in the New Hampshire primary, Hillary Clinton will have to confront a growing optics problem centered on how she and her allies raise the funds needed to tear down the surprisingly tough challenge posed by socialist Bernie Sanders.

Here’s the backdrop: a historic 2.7 million donations in 2015 has fueled Sanders’ historic rise. Clinton, meanwhile, heavily reliant on bigger donors, has raised 58 percent of her primary campaign funds from maxed out contributors who can’t give any more. While her pool of donors shrinks, Sanders will be able to easily reload with his growing small-donor army. In fact, his total has grown to 3.5 million contributions and by last night, he had raised over $6 million since his win.

The pressure this dynamic places on the frontrunner cannot be overstated, and in the coming weeks it will reinforce every doubt that Democrats have about Clinton’s candidacy. In the run up to New Hampshire, Clinton had the luxury of postponing a series of high dollar fundraisers hosted by financial services executives, allowing her to avoid the unwanted headlines and spend time on the trail. Given her campaign’s looming cash crunch, however, these are fundraising events Clinton can no longer afford to postpone. Bottom line, she needs the money.

As a result, Clinton will be forced to headline a series of high-dollar, closed-door traditional fundraisers with financial firms, Wall Street titans, corporate lobbyists, the pharmaceutical and fossil fuel industry, and every other Democrat boogeyman (that she routinely assails on the campaign trail) under the sun. To put a fine point on it, yesterday, Clinton’s campaign had a fundraiser in Mexico with a lobbyist representing companies Sanders has vilified on the campaign trail. These fundraisers will scream of the “establishment politics” and “establishment economics” that Sanders is keen on attacking.

Moreover, Clinton doesn’t have a PR-friendly alternative to fund her efforts. Her super PAC’s high-dollar fundraising has become a piñata for daily attacks by Sanders on the stump, and any dip into her personal funds will only intensify calls for Clinton to release paid speaking transcripts and further raise questions about the agendas of the hundreds of companies and interest groups that made the Clintons rich.

Further compounding the dilemma, her response to this growing optics problem has backfired. New Hampshire’s results prove that casting all questions about her integrity as an “artful smear” didn’t fly with the voters. Democrats have spent decades arguing that corporate interests (but never labor unions, trial lawyers, or other liberal special interests) are a corrupting influence in politics. They’re invested in the Sanders message, and aren’t likely to give Clinton a pass.

Picture this: Hillary Clinton dodging questions about releasing paid speaking transcripts as she heads into a closed-door fundraiser hosted by a banking industry lobbyist. Meanwhile, Sanders on message at large rallies and expanding outreach efforts to the minority communities that are central to his efforts of breaking through the Clinton campaign’s firewall. The split screen is a brutal contrast for Clinton, and will only illustrate Sanders’ central theme without him having to say a word.

Given Sanders’ campaign message and the reality of where her money is coming from, nearly every dollar that Clinton raises will come with a cost, whether it’s increased scrutiny, bad headlines or time off the trail. As we head to Nevada and South Carolina, we’ll see just how costly Clinton’s optics problem will be.

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