Campaign Finance Reports

The violence of Virignia Tech had pushed this and subsequent posts about the Presidential campaign finance reports to the back burner.

As most people who follow politics knows, the money race is the only race in town right now and thus there are endless reports about which candidates has raised the most money and from where, about which candidates have spent the most money and who has the most in the bank. If you are looking for those kind of stories, this is not the place for you. This post, in particular, is about how and on what canddiates are spending their money. While some expenditures are predicatble, staff salaries, consulting fees, printing and postage, there are some significant differences among the candidates.

A word on methodology. As much as I wish I could spend more time on all the candidates, for simplicity sake, I have chose the three leaders in each party to evaluate. This is done in part to avoid overwhelming amounts of data, but also to try and draw a few conclusions about how the frontrunners are spending their time and money. I know it is a cop-out, but it is all I have time for right now.

First, lets take a look at the spending of all six candidates on the 15 biggest expenses according to the financial reports. First the Democrats: And now the Republicans: What is not surprising is staff salaries are usually tops or in the top three for all candidates. But there are a few abberations. For example, Hillary Clinton has spent $491,827 on technology and software. Of that, the bulk went to two vendors, $272,916.67 to NGP Software and $192,750 to Mayfield Strategy Group, (which for an internet strategy group has no real website). These seem outsized expenditures considering what her competitors are spending. Contrasting that with her competitors, Edwards and Obama, who have spent far more on travel than Clinton.

Romney is similarly spending a lot of money on web services/technolgy. Nearly $845,000 of Romney expenditures spread out over seven vendors, were used for web services.

Now websites starting from scratch cost a great deal of money and these expenditures are probably one time large expenses, but the emphasis of Romney and Clinton on their technological operations indicates their reliance on those aspects of their campaign. Of course, simply having a snazzy internet presences doesn't mean anything unless it is put to good use. For example, Barack Obama has a number of supporters who have set up social networks online, so his "online organization" is much more grassroots than top down, allowing him to spend far less on that aspect of his operation.

But Obama has spent by far the most on travel to this point. Nearly $1 million dollars in the first quarter. Given Obama's near cosntant presence (and youth) on the road, this total is not surprising. But the payoff has the potential to be huge in the long run. By moving about the country, Obama is not only building name recognition (as if he needs it after the media fawning), but also sewing the seeds of an organization. In the end, the snazzy internt campaigns and glitzy media buys mean nothing if you don't have the ground-pounders out on primary day. This is where Clinton and the rest of the Democratic field need to be wary.

One major component of each campaign is obvisouly staff, and most of the candidates are spending a lot on staff, which is no surpising. However, not everyone is being smart about their spending. Some candidates are spending too much on staff and that could be their undoing over the long run. Lots of expensive staffers running around become more interested in their paycheck than in being lean and hungry. Of the six candiates, most are grouped fairl closely together in terms of absolute dollars spent on payroll, but there is a wide disparity in terms of payroll as a percentage of disbursement and as a percentage of receipts. McCain is far and away the most significant outlier. Unless McCain starts raking in the green, he is going to have to start firing people and firing people sends a message to the public that you are no longer a viable candidate.

Obama and Clinton are pretty close here, with Obama spending a little less on staff. The next question to ask is how much of that staff is headquarters and how mcuh is field personnel. A topic that will be tackled in a subsequent post.