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February 7, 2008

Is This What Burkle Bought?

In the beginning, everyone assumed that the Clinton machine would dominate fundraising in the Democratic primary. Although it raised prodigious sums of money, Barack Obama managed to keep pace all through 2007. Now, as Obama has also kept pace with Hillary in delegate counts, the Clinton machine appears to have begun running dry:

Sen. Hillary Rodham Clinton announced yesterday that she had lent her campaign $5 million, a remarkable twist for a candidate who raised more than $100 million last year that came as she and Sen. Barack Obama continued to spar over which of them was the Democratic winner in coast-to-coast Super Tuesday balloting. ...

At her campaign headquarters in Arlington, Clinton defended her maneuver, executed last month but kept under wraps until yesterday, to add money to her campaign coffers. News of the $5 million transfer came as a surprise to Clinton donors who had assumed her campaign, which raised $100 million last year, would keep pace with Obama's. Earlier this month, Obama announced that he had raised $32 million in January alone, and aides said he took in an additional $3.5 million yesterday. ...

It was unclear whether news of Clinton's financial stresses would affect her fundraising. Top fundraisers said they did not learn of her move until after Super Tuesday's contests, suggesting that the campaign was aware it could be a public relations blow.

Hillary raised $13 million in January, much less than half of Obama's total. She now faces the prospect of a tour through Obama's territory with no lead in delegates and a huge gap in financing. The money gap could tamp down her advertising and event staging, leaving a clear field for Obama in Maryland, Virginia, Louisiana, and Nebraska. Even Washington DC and Washington state look grim.

The massive loan may not seem unusual given Mitt Romney's self-funding, but Mitt has plenty of his own money. Where did Hillary get $5 million to loan a presidential campaign? Bill and Hillary have done well on the speaking circuit, and Bill recently got $20 million or so for backing out of his partnership from Ron Burkle. At the time, speculation had Bill wanting to eliminate any potential conflicts between Burkle's business and Hillary's election.

Now, however, one has to wonder whether Burkle may have attempted to float money into Hillary's campaign while bypassing campaign-finance regulations. Did the $20 million, which came just two weeks ago, actually represent a fair-market settlement for Clinton's services and ownership stake in Yucaipa? Or did Burkle inflate it in order to allow Hillary to "loan" herself $5 million to keep pace with a surging Obama campaign?

The Clintons always seem to live at the nexus of questions regarding cash and politics. Whether we talk about Norman Hsu or Ron Burkle, their opacity in financial operations suggests a very, er, flexible attitude towards ethics in government -- and serves as a reminder why so many people oppose a Clinton Restoration.


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