W ith Election Day rapidly approaching, both President Obama and Mitt Romney are fundraising at a furious pace, desperate to stow away enough money to remain competitive up until November. Both men have dozens of issues to consider when fundraising, but Romney has one big concern that the President lacks: whether he should pour some of his own money into the campaign.
Although a candidate cannot raise unlimited funds from others, he may “loan” his campaign as much of his own money as he pleases. And Mitt Romney has quite a lot to loan. According to a June estimate by Forbes Magazine, Romney is worth more than $230 million (excluding the $100 million in blind trusts he set up for his children). This includes $91 million in debt securities, $52 million in Bain Capital investments, $23 million in real estate holdings ranging, as well as roughly $16 million in cash. By comparison, Forbes approximates that President Obama is worth $5.7 million — a quite substantial sum, but a pittance compared to Romney’s fortune.
Indeed, Romney has self-funded considerably in the past, pouring a breathtaking amount of his own money into the 2008 Republican Presidential primary. By the time he dropped out, Romney had loaned his campaign $44.6 million in personal funds. (Romney also spent $9.5 million — 65 percent of his total fundraising haul — on his successful 2002 run for Governor of Massachusetts.)
Romney has thus far donated just $75,000 to the so-called Romney Victory Fund (his wife Ann matched his donation). But as we get closer and closer to November, his advisers are sure to debate whether or not the candidate should invest significant personal funds in the race.
The pros of self-financing are obvious: cash, cash and more cash. Instead of wasting time kissing up to wealthy donors, Romney would have more time to spend on the stump, talking to voters and soliciting favorable press coverage. He would also have more money to devote to campaign ads, as well as the always-important ground operation. Moreover, unlike the money spent by outside groups (like Karl Rove’s cash-flush American Crossroads), Romney would be able to control precisely where his own cash went.
And considering Romney was only able to eke out victories against Rick Santorum in states like Michigan, Ohio and Wisconsin after outspending him by enormous margins, there is an argument to be made that Romney doesn’t just need to match the President’s fundraising, but outraise him considerably. Self-funding would go a long way toward accomplishing such a goal.
The list of cons, however, is just as considerable. First and foremost, loaning a campaign large amounts of money can leave a bad taste in the voters’ mouths. If Romney were to pour millions of his own money into the race, it could solidify his image as an über-wealthy, out-of-touch politician. Even a relatively small loan would also give the Obama campaign lucrative fodder for fundraising appeals of their own. Any attempt by Romney to self-fund could make the populist arguments against him (including recent attacks on his time at Bain Capital) even more salient.
Unlike in his race for Governor in 2002 and President in 2008, Romney has universal name recognition this year. That simple fact removes the largest impetus behind most candidates’ self-funding.
Moreover, there is scant evidence that self-funding on a grand scale actually works. One politician you can bet Mitt Romney’s advisors remember well is Meg Whitman. Whitman, the Republican who ran in 2010 for Governor of California, spent more of her own money than any other politician. Ever. In spite of the more than $143 million she invested in the race, however, Whitman lost.
In fact, candidates that self-fund spectacularly have a notoriously bad track record. On the Presidential level, the largest self-funders ever have been Mitt Romney in 2007, Ross Perot (twice) and Steve Forbes (twice). None of them, needless to say, has ever occupied the Oval Office. According to an analysis by New York Times blogger Nate Silver, of the 95 largest self-funded federal candidates in history (prior to 2010), only 22 of them won their elections. And in 2010, only one of the eight candidates that spent more than $3.5 million of his or her own money got to celebrate on Election Night. (The sole success was Rick Scott, the Republican that poured $75 million into his one-point victory in Florida’s Governor’s race.)
In the end, the Romney campaign — and the right-leaning PACs and Super PACs that will spend money on his behalf — will probably raise enough cash that significant self-funding will not be necessary. That a large donation to his campaign could allow opponents to brand Romney as an effete attempting to buy the election will likely rule out the option for Romney.
Nevertheless, it is impossible to determine how the election season will play out. And — considering there is no such thing as too much money in politics — we should never say never.