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Cain Allegations Rally Small Donors as Big Fundraisers Flinch

By Jonathan D. Salant
November 07, 2011 12:01 AM EST
Sharon Bialek
Sharon Bialek

Herman Cain raised $1.6 million in the five days after sexual harassment allegations surfaced on Oct. 30, showing claims about his conduct as head of the National Restaurant Association in the 1990s aren’t slowing momentum for his presidential bid, his campaign said.

If the issues persist, Cain could lose millions in donations because it will be difficult for him to recruit high- dollar fundraisers required in a presidential campaign, Republican consultants and fundraisers said.

“Who wants to align himself with someone when you have no idea what the rest of the story is?” said Eddie Mahe, a former Republican National Committee deputy chairman now at Foley & Lardner LLP in San Diego, California. “Who is going to take a risk of identifying themselves with someone when, the day after tomorrow, three more women might march out there and say, ‘He groped me’?”

Joel Bennett, a lawyer for a woman who accused Cain of sexual harassment, said on Nov. 4 that she complained about a “series of inappropriate behaviors” and “unwanted advances.” Bennett, in a statement to reporters, said his client stands by a complaint she made against Cain when he headed the restaurant group. Cain denies harassing any women at the association; he acknowledges the association reached financial settlements with two women who complained about him.

‘Full Campaign’

The campaigns of former Massachusetts Governor Mitt Romney and Texas Governor Rick Perry have both estimated that it will require about $50 million to compete in five, nearly back-to- back contests between Jan. 3 and Feb. 4.

“To run a full campaign, you need a full campaign,” said Alex Vogel, a Republican consultant. “A full campaign involves a broad campaign to get small donors and a targeted effort, usually events-driven, to get large donors. It’s the only way to make sure you’re tapping into all sources.”

Mark Block, the campaign chief of staff, in a Nov. 3 news release said that the influx of cash is evidence of the strength of Cain’s appeal. “Since the beginning of the campaign, Mr. Cain has told the American people that he has their back and now the American people are showing they have his,” Block said in the statement.

Cain raised $4.7 million for his presidential campaign through Sept. 30, including $2.7 million in donations of $200 or less from small donors. He also lent his campaign $675,000.

Top Fundraisers

In the primary field, he has raised a greater percentage of his money in small contributions -- 57 percent -- than any other candidate except for Representative Michele Bachmann of Minnesota, according to campaign finance reports. Of the $7.6 million Bachmann has raised, 70 percent came in amounts of $200 or less. Representative Ron Paul of Texas has raised half of his $12.6 million from small donors.

Romney and Perry are the primary’s top fundraisers in part because of their “bundlers,” supporters who are willing to solicit friends and family for donations to their favored candidate’s campaign. Romney has raised $32 million, with about 10 percent coming from small donors, and Perry reported $17 million in contributions, about 3 percent from low-dollar donations, as of Sept. 30.

President Barack Obama has raised $89 million. Of that, $41.2 million came from small donations and the rest was generated in part by a team of 351 bundlers who have each brought in at least $50,000, according to campaign finance reports.

Record Pace

“There is no substitute for large-dollar fundraising,” said Craig Engle, former National Republican Senatorial Committee general counsel and head of the political law group at Arent Fox LLP in Washington. “Low-dollar fundraising can only get you so far,” said Engle, who is counsel to Jon Huntsman’s presidential bid, which reported $4.5 million, about half of which came from the candidate’s personal bank account.

Cain’s windfall since the allegations became public amounts to about $300,000 a day. That’s a record pace for his campaign, said Brock.

Still, the amount is well below records set by other candidates.

In 2004, Senator John Kerry took in $5.7 million on the day he won the Democratic Party nomination. In 2007, Paul, a Republican presidential primary contender then as he is now, bested Kerry’s record by raising $6 million in 24 hours. Hillary Clinton and Obama both surpassed that one-day fundraising record in 2008.

Paul, Republican Senator John McCain of Arizona, and former Vermont Governor Howard Dean, a Democrat, were at the forefront in using the Internet to generate big money from small donors.

McCain Fundraising

In his 2000 presidential challenge to then-Texas Governor George W. Bush, McCain took in $1 million after his surprise victory in New Hampshire. Dean, a Democratic primary contender in 2004, introduced the use of online contests to raise money, generating about $700,000 in donations on his best day.

Although their campaigns received attention for the fundraising breakthroughs, none of them won the nomination in those cycles. McCain, surrounded by a more traditional money raising apparatus that included bundlers, did capture the Republican nomination in 2008.

Cain risks a similar fate as that of Dean and Paul in this cycle, said fundraisers and strategists.

“If the allegations surrounding him are true, nobody is going to want to give or raise money if they think it’s a lost cause,” said Al Hoffman Jr., a real estate developer based in North Palm Beach, Florida, and a former Republican National Committee finance chairman who raised at least $200,000 for former President Bush in 2004.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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