Should Mitt Romney Self-fund?

With 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.

Published by Eric Stern

Eric Stern, from Pittsburgh, Pennsylvania, is Editor-in-Chief of The Politic.

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2 Comments

  1. Independents need to be forced to make the stark chcoie between a real conservative v. a real leftist. Then, if we lose, we lose, and this country will sadly get what it asked for.Whether that real conservative should be Gingrich or Cain, I am not sure. Gingrich has a lot of baggage, but boy does he perform well in the debates. The man knows what he’s talking about. Cain is a breath of fresh air, but inexperienced. Mitt Romney is a RINO and I truly hope he does not get the nod. Principles come first. Oh, and John Hunts-who?On an unrelated note, from a comment I saw on the edge of the sandbox: hey. I took the boys to Tea Party events. The environments never felt any different than other large gatherings: football games, 4th of July, Busch Gardens. But then, I’ve gone as far as Budapest with the kids in tow, so I may not be typical.best to you my friendLinda

    1. Ron Paul can win if the system isn’t ttollay corrupt. The other Reps are all the same, so they will splinter the neo-con votes. Also, Ron Paul voters are not apathetic. They will show up and vote.Dean was sidelined by MSM because of the “dean scream.” They have tried to do this with Dr. Paul, but it’s different with the growth of blogs and youtube. Citizen media is informing more about these tricks. For instance, I wouldn’t have known about CNBC taking down Dr. Paul’s successful post-debate results if it weren’t for a comment here on HP. they want us to think he doesn’t have a chance. that the internet is this strange world of fringe voters, when everyone I know uses the internet.not sure if this is true, but I’ve heard that the people being called for the votes bias against RP because 1) they only call land lines, and 2) they call people who voted in the last primary which are the die hard Bush neo-cons.lastly, the anti-abortion issue bothered me too, but he is right to let the states decide on it. it is a complex personal issue. I understand where he’s coming from given that he delivered babies and it’s kind of arbitrary to say it’s okay to destroy what he’s about to deliver until such and such point. so basically if he wins, many states will retain legal abortions because he believes it’s a state issue and he does not push his personal feelings about this on the states. I think this might be the most fair way to deal with such a tough issue when I put my personal feelings aside and try to look at it objectively.

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