2008 Presidential Campaign Finance Overview

MODERATOR: Thank you for coming in this afternoon for this afternoon's briefing with Ben Ginsberg on the broad issue of elections and campaign finance. Ben is a partner at Patton & Boggs and represented the Bush-Cheney campaign in 2000 and 2004. So he is intimately aware of how the system works, what's important in the finance area, what's changed, what hasn't changed. So he'll start with some opening remarks and then be happy to take your questions. Ben, thanks for sharing your time with us.

MR. GINSBERG: Good afternoon, everyone. Let me, let me start off by sort of telling you why I think this election in the United States, the presidential election in 2007 and 2008 is really unique amongst the ones that we've had in this country, and certainly the ones in which I've been involved. And while I admit to being a partisan and, in fact, I'm representing Governor Romney this year, this briefing is designed to tell you about the system as a whole, but in the interest of full disclosure, I wanted you to know that.

What I'd like to do is talk some about the rules and the structure for the campaign and hopefully provide some tips on what to look for as you all are reporting on our election. As I said, this presidential campaign is very different from ones in the past, but it is also true that the way we fund presidential elections is different from all the races for the U.S. Senate and the U.S. House and all the states. And so part of the unique features of this is that our presidential system is unique. There is taxpayer money involved to candidates who wish it in both the primary and the general, and I'll get into that a bit as we go forward.

Here are the five things to watch for that do make the 2008 elections unique: Number one is there is no incumbent president or vice president running for the office for the first time since 1928. In other words, in all other elections we have had either someone who was a president running for re-election or a vice president looking to move up to president. This is the first time since 1928.

That's led to a very crowded field on both sides which gets into point number two. This is a very different way that we fundraise this even from past presidential ones. This will be the first election in which the leading candidates are all raising private money instead of taking advantage of the taxpayer money from the U.S. Government.

Number three, the amounts of money are record-setting. It is not even close to where the figure has been in the past. There's some $130 million raised by all the candidates in just the first quarter reports that are about to come out this weekend. By way of comparison, over the course of the primary campaign in 2004, President Bush and John Kerry raised about $500 million, and so you can see that at this rate, this field of candidates will far eclipse what has ever happened in the past.

Number four, I want to spend the time on what to look for in the reports that are starting to trickle out today and will come out over the next weekend from the presidential candidates and what particular features to look for and what not to be fooled by in the reports.

And number five, the calendar this time -- the primary election calendar is very different, and that has an impact on the money raised because candidates are going to need more money for the phenomenon I think you've all read about which is a lot of primaries moving up in the calendar to February 5th and even earlier. And so that pressure of so many campaigns on what is sort of in-artfully being called Super Duper Tuesday, February 5th, really puts a premium on the money raising that you're seeing now.

Now let me go back over each of those five. Number one is no incumbent on either side which as, in fact, made for a much more competitive race, including the race for money. It's a crowded field on both sides. There are roughly 10 Republicans and 8 Democrats who are running. What also is unique about this year is that usually there are heir apparents. There are front-runners who need to go through the contest but who sort of start in front and continue that way. That's especially true on the Republican side historically, but also on the Democratic side, and this time already you've seen the two perceived front runners, Hillary Clinton on the Democratic side, John McCain on the Republican side, get knocked off their mantle of being the heir apparent, the obvious choice, the front runner.

So that, in turn, has increased the competition for dollars, the fuel that makes the engine of campaigns work. It is also encouraging others who are not yet in the field to look at the race despite the fact that there are obviously a lot of candidates who are working hard, but on the Republican side, former Senator Fred Thompson from Tennessee is looking at the race, Newt Gingrich is making noises about jumping into the race. And on the Democratic side, former Vice President Al Gore is being encouraged to look at the race. So again, unusual that the field is not settled; so many candidates are being so active including the raising of money, but that there are other rather prominent figures looking to move into the election.

Now there are ways that the way presidential campaigns are paid for that is also changing rapidly. The traditional way, the historic way that we have funded presidential elections is a sort of dual system. In the primary, candidates can receive a matching grant from the Government for the first $250 that they raise from any individual in the country. And so the reality of that has been in past campaigns, the candidates will typically have raised somewhere between $20-30 million on their own over the course of the primary and received roughly a $20 million check from the U.S. Government on January 1st of the election year. In return for getting that public money under this system, they agreed to an overall spending cap. In other words, a ceiling on the amount of money they can spend that historically has been somewhere between $40 and $50 million. That system is in its death throws for all practical purposes as you can tell from the first quarter money-raising statistics. And, in fact, this time three candidates in each party have already said beyond a shadow of a doubt, they will not be taking the public taxpayer matching funds, and that's Senator Clinton, Senator Obama, and John Edwards on the Democratic side, and John McCain, Rudy Guliani, and Mitt Romney on the Republican side. And they have already said that they won't do that.

Now our general election campaigns have in the past always been funded by one lump sum given by the government that amounts to about $90 million for the general election campaign. It is still very much an open question about whether any of the candidates will take that money for the fall or try and raise it privately. In fact, five of the six leading candidates are already raising money for the general election campaign, but have reserved the right to go back and to take the grant for the general. But the primary matching fund system is really pretty much fading.

George Bush was the first candidate not to take the primary matching funds in 2000. Neither Bush nor Kerry took the matching funds in 2004, and now you very much see that trend continuing. This time there are real reasons to want to raise as much money as you can in the primary election campaign. Number one is the condensed calendar that I mentioned before in which I'll go into some detail on in a moment. Number two is that if you agree to the ceiling on how much you can spend in the primary, it is a long, cold dismal six months between the time the nominee is determined, probably in February or March, and the party convention that will come in late August and early September. And the lesson of the 1996 campaign with Bob Dole versus Bill Clinton, is that you need to have a lot of money to be able to operate in the period between the end of the nomination, in other words, when the winner is determined and when the conventions are, and that's a long six-month period. And so that's another reason that the matching-fund system is fading.

Another reason is that the campaign finance laws that were put in starting in 2003, the McCain - Feingold Law, as it's popularly known, has, in effect, weakened political parties' ability to fundraise, and because of that weakened political party structure, the parties are providing less cover for candidates in that period especially against outside groups. Special-interest groups, the 527s that you heard about last cycle whether it was the Media Fund or Swift Boat Veterans for Truth that played a major role. And so candidates want to be able to defend themselves against those attacks which is another reason they're rejecting the matching funds.

One of the other features of the campaign finance law that factors into all of this is a ban we have in our elections -- 60 days before the general, 30 days before a primary election of an outside group using funds, corporate funds, to put out a message against the candidate. But special-interest groups are nonetheless setting the agenda outside of that ban and using corporate resources in other ways within that ban. One of the cases is the U.S. Supreme Court will hear a challenge on April 25th to that 60 and 30-day ban in a case styled Wisconsin Right To Life versus the Federal Election Commission that you'll be reading about. But it is a challenge to that 30 and 60-day ban. If the ban goes down, candidates will feel the need for even more money, and that, too, is leading to them not taking the public match.

As for the amounts of money being raised, recognize that the dollar figures you heard about on April 1st in the formal reports that are due over this weekend, really has constituted the first primary in the presidential election. And so there has been a great deal of attention paid in our media to the relative amounts of money that the different campaigns have raised. You will hear a lot more about that.

On the Republican side there was a great deal of surprise that John McCain, the supposed front runner, finished in third place in the money race. Rudy Guliani, who's ahead in the polls, finished in second place, and Mitt Romney, who was in single digits in all the national polls, actually raised the most amount of money on the Republican side. So that first primary served to scramble the standings.

On the Democratic side, Senator Obama, a relative newcomer to our politics, succeeded in out-raising Senator Clinton, and that has sent, I think, shock waves through the Democratic field. In fact, the absolute amount of money they raised was pretty close. Senator Clinton was a little bit ahead, but a lot more of Senator Clinton's money was money that was raised for the general election, not the primary, so it can't be spent unless and until she's the nominee. So for the primary process, Senator Obama actually has a dollar advantage now. And I think observers were markedly impressed by the fact that he has roughly 100,000 donors, which is far more than she has with about 60-65,000. And that, in turn, means that he can go back to those small dollar donors and ask them again and again for investments in his campaign. So that is a surprising development that he was that successful.

The other phenomenon that you'll notice as the numbers come out is that both parties fields have really gone into two different levels. On the first level you have the candidates who have raised double-digit money -- the Romney, Guliani, McCain on the Republican side; Obama, Clinton, and Edwards on the Democratic side, and then there are candidates far below who have raised only single-digit money. And so you're seeing, in effect, a division in the field that will probably lead to reduced candidacies quicker than usual that's arisen. And it is a fair question that I think reporters will start asking the candidates in the lower tier about whether they'll take the matching fund. And those matching funds are sort of fools' gold for those candidates because if they agree to take the check from the federal government --remember they're limited in how much they can raise overall -- so that separation of the field and the temptation for more candidates to take public money, will give them a short boost that won't work; will also have great ramifications in the campaign.

Now as the reports come out today and over the weekend, here are some things to look for: Question number one will be, how much of the money raised is for the primary campaign and how much is for the general election campaign? Again, money raised for the general election can't be spent until next fall -- I'm sorry, fall of 2008, so it has no impact on the primary elections that you're seeing now although it's included in the totals that you'll read on the FEC reports summary pages. So you need to ask the campaigns and get them to answer how much of the money is for the primary and how much is for the general.

Number two, on the second page of the summary sheets of the FEC reports, there is a figure that asks for the cash on hand in the individual campaigns. In other words, that's the money that the campaigns have managed to hang on to that they can spend in the future. Now that number is going to lump primary and general election money together, so you also need to ask whether it's for the primary or for the general. But those funds, again, will provide an indication of the resources available to the campaigns to spend.

There will also be a great fascination with what is known as the burn rate at the campaigns. And the burn rate means how much money they're spending. If a campaign raises a lot of money but manages to spend it all, there will be no fuel in the tank to drive it down the long long road of the primary, and so the burn rate is important. Discerning reporters will go beyond the summary pages and look at the disbursement section of the FEC report and do a lot of adding and calculating and see what campaigns are spending their money on, and is it on expenditures that will lead to greater results down the road? They will look at the salaries -- who's being paid how much in the relative campaigns, how much money is going to feed the staff? They will look at the amounts being paid to consultants, how many consultants are there? Are there so many consultants on a campaign that it is top-heavy? Are there consultants who have enough expertise to deal with the wide variety of functions that a campaign has? They will look to see which states' campaigns are operating at -- what they're paying for headquarters, for example, to try and determine which states each campaign is targeting during the primary season, and that'll feed a little bit more into the calendar we'll talk about.

So far only the Romney campaign is up on the air with TV ads, but they'll be looking for expenditures such as ads, and they will ask the question, does it make sense for Governor Romney to spend money on ads this early and he'll answer well, if you're in single digits in the national polls but have raised more money than anybody else on the Republican side, you better spend some money getting your name identification up because the more your name identification gets up, the more money you'll be able to raise. So we'll have debates like that.

They'll be looking at things like travel costs -- who's flying their consultants around first-class and who's making them sit back in steerage, for example. Who's paying for private cars? Who's chartering jets? Who's flying commercial? And there will be stories written about how prudent the campaigns are spending their money.

On the contributors side, there will be a lot of investigation and analysis of where a campaign's contributors are coming from and who they are. Are they centralized in one geographic area? Are they from the South? Are they from the Northeast? Are they from California? Where are they from? They will look for common patterns. Are there a lot of people from a particular industry backing a particular candidate -- trial lawyers and John Edwards, for example. Or is it more widespread and with different sort of groups: Mormons supporting Governor Romney; military people supporting Senator McCain; New Yorkers supporting Mayor Giuliani. And people will ask those questions. The campaigns will also report -- not have to report in entirety, but will say how many contributors they have, and the total number of contributors will also be perceived as a source of strength.

And lastly, let me talk a little bit about the calendar which plays a new and unique role in this election campaign. And there are really two calendars to consider, and the money that a campaign will have will become very important for dealing with the events in the calendar. The first primary, as I said, was the money reports that are now coming out. The next major event in the campaign is a May 3rd debate at the Reagan Library in California. There's then a May 15th Republican debate and I believe May 12th Democratic debate in South Carolina. That precedes South Carolina straw polls in both parties on May 18th. On June 6th there is a debate in New Hampshire sponsored by the Union Leader and CNN. June 30th will be the close of the second quarter and another round of money reports. On August 11th in Ames, Iowa, if you ever want to attend a festival of American politics, it is the Iowa straw poll, usually and prohibitively hot conditions in the middle of Iowa. But on the Republican side this time, it's really a place where all the campaigns will be, and the winner of that will receive a boost in his or her fortunes moving forward. The September 30th FEC report will, again, be another indication of who has how many resources and how they're spending it, and there will be a whole other series of debates starting in the fall leading up to the actual casting of votes. My, we get exhausted before ballots actually start to fly.

I wish I could tell you what the calendar will be with a degree of certainty, but I can't. That's because this year there is an unprecedented amount of moving around and jockeying between different states to go first. Iowa and New Hampshire have played the traditional role of being the first states. The Democrats decided that Iowa and New Hampshire were not representative enough of the country. They tend to be very small, largely white states, very little diversity in either of them. And so the Democratic party decided to move the caucuses in the State of Nevada up until late January, and that, in turn, has started a huge stampede among many many states so that, in the past, the calendar has looked like Iowa in mid-January, New Hampshire eight days later, the Iowa caucuses on a Monday. The following week on a Tuesday would be New Hampshire, usually about a 17, 18, 19-day break until the South Carolina primary, and then a few here and there until the Super Tuesday, the second Tuesday of really March, but sometimes February, where a number of states would go. This year is it terribly consolidated, and the beginning of 2008 will see probably 10 primaries or caucuses in January.

Again, Iowa and New Hampshire are determined to keep their traditional place, but there are a number of other states that are threatening to move up. Florida and Michigan, for example, two very large states, look like they're going to go on January 29th. Alabama may go on the 2nd. Wyoming is set to go with caucuses on January 23rd. Alaska is talking about moving up its caucuses. And then, for February 5th, you've got a huge rush of states, as many as 20 states threatening to go on February 5th, including some of the largest states in the country, which is why money becomes sort of so interesting.

By way of contrast, in the general election campaigns of 2000 and 2004, there were 14-16 battleground states where the general election campaigns concentrated. The budget for both campaigns was roughly $90 million, and there was adequate time to get significant staff on the ground to be able to work in each of those states. On February 5th of 2008 there stands to be as many as 20 states including the truly large states that were not battleground states before. California, Texas, Illinois, New York, New Jersey, are all likely to go on February 5th. To run campaigns in each one of those states would probably require $150 million. No campaign is going to have that amount of money, but you obviously want more money than less money to be able to play in as many of those states as possible which is why the money chase that we're on now and the way that the campaigns will -- the employee resources and try and win delegates in those states, is really the great mental chess match of our time, and something that people who have run presidential campaigns their whole adult lives have not had to face before, which is really what makes this year such an interesting year.

So with that, I hope that helps sort of set the menu a little bit for the campaign, and I'd be more than happy to answer any questions.

MODERATOR: If you would raise your hand and wait for the mike, then name your organization.

QUESTION: Thank you. Sonia Schott Radio Valera Venezuela and Globovision of Panama. I would like to know what kind of (inaudible) the general race is going to place in this election, if any, and the second one very shortly, you mentioned that in the case of democrats, Senator Obama has more money for the primary election and Senator Clinton more money for the general election. What will happen in the case of, for example, Senator Obama wins the primary election? What will happen with the money raised by Senator Clinton? Can it be used by Senator Obama?

MR. GINSBERG: No.

QUESTION: Or there will be a problem of accountability? Thank you.

MR. GINSBERG: No. I'm sure she'll give it to the Republican candidate. No. By law a candidate who is not on the ballot for the general election must refund all the money. So in other words, Senator Clinton would have to refund all the money that's raised for the general election. One of the reasons not to raise money for the general election is that you have to refund 100% of the money you raise for the general if you're not a nominee, which means you have to pay your fundraising costs for raising the general election money out of primary money. So candidates who are raising a lot of money for the general right now will burn through their primary dollars to meet their general election expenses.

And your second question was race and gender in the election? I think it's -- I think it's too early to tell. I think that depends very much on the dynamics as you get closer to voting. I think one of the things that has been historically true is that people who represent groups who have traditionally not seen their groups have candidates and nominees in the process get more excited and energized so that Senator Clinton is a female candidate, Mitt Romney is a Mormon candidate, Barack Obama is an African-American candidate. If history proves correct, then their groups will become more energized with the possibility of having a member actually win the nomination and the possibility of being president. But I think it's too soon to tell.

QUESTION: How do you explain the disparity, especially on the Republican side, between the money primary and the polls themselves?

MR. GINSBERG: I think the national polls at this point in time are very much generalized snapshots that are based almost entirely on name identification. The money raising, I mean if you look at the number of donors, and even Senator Obama had to raise that money was only 100,000 people. And so if you're fundraising and you have good networks and you're able to identify easily people who can raise money and who support you and are willing to give you money, you can succeed in tapping your best friends and network, especially in the first quarter. And the national polls are less important. If you get into the second, third, and fourth quarters, name identification does become more important because the low-hanging fruit has been picked, and candidates will need to broaden their fundraising bases and it is easier to broaden your fundraising base the better known you are. And, of course, there will be a candidate on each side and I have no idea who, who becomes the hot internet candidate. And the potential of fundraising on the internet is also likely to be seen -- to have a much greater impact in this election than it has before, probably not as much as it will in 2012 and 2016, but name identification and internet fundraising will sort of go hand in hand, so it'll become more important.

QUESTION: Nikolay Zimin. Two short questions. First one, according to some forecast, the winner of White House in 2008 will spend about $500 million. What do you think about this number? And second question, after 2000, election 2000, we heard a lot about some changes in electoral law in United States, maybe elimination of electoral college, something like that. Do you foresee any changes in electoral law in United States? Thank you. In near future? Thank you.

MR. GINSBERG: I think that all the changes that -- I don't think there will be any major changes between now and election day, no, in terms of the laws. There are -- there have been some significant changes since the 2000 election. The Help America Vote Act which went into effect in part the 2004 election and more with the 2006 election has had an impact on voting and equipment issues. But I don't think you'll see national legislation governing elections between now and 2008. Some states will do fairly significant things on the state level in terms of lowering barriers to voting, having a data base that everyone has to be a part of if they're going to vote, being able to have the computer sophistication to check individual voters as they go into the polls. Florida is about to pass a law allowing felons to vote. There were some 900,000 felons who were not allowed to vote in Florida, but Florida has changed its own state law. So I think you'll see some things on the state basis.

As for the $500 million figure for each campaign, I think it's too early to know, but that strikes me as a reasonable ballpark figure. That would break down roughly half and half with the primary and the general. President Bush and Senator Kerry raised $280 and $250 million, respectively, in the 2004 primary. I suspect that number will get increased. The general election campaigns, because the party conventions are so late in the year, will really only be two-month affairs, and so there's not either the time or the need to raise probably as much money as you need to pay for the 18-month-long primary. But $500 million is a reasonable figure.

QUESTION: Markus Ziener, Handelsblatt, Germany. I have a follow-up actually on the money that was raised before. I mean, for the example, Hillary Clinton, she raised money for the Senate campaign, and she could use the money for, as far as I understand, for the -- she can use it for the primaries. Or am I wrong?

MR. GINSBERG: No, you are correct.

QUESTION: So there's no restriction, actually, in using money that was raised for other purposes later on?

MR. GINSBERG: There are restrictions. It has to be money raised for a federal election by your own campaign committee. So in other words, John McCain had a leadership pact called The Straight-Talk Express. He could not bring that money into his presidential campaign, but he could bring in money from McCain for Senate in 2006.

QUESTION: And a technically brief question. You had been talking about the calendar that the elections had been moved up. So who actually -- who benefits from moving up the whole schedule because, well, it seems to me that on this Super Duper Tuesday -- how you said it -- I mean, that everything might be over already.

MR. GINSBERG: Yeah, it's a really interesting question, and I suspect that there will be about three dozen answers to that question between now and election day. There are a couple of different ways to look at it, in fact. It may benefit a candidate who has very large national name identification, who people just inherently know and who can go up on national TV with some ads and hope that has a great effect over the state. That would probably help Senator Clinton and maybe Rudy Guliani or John McCain on the Republican side. Another school of thought says that by the way the delegates are actually chosen, that you're going to need ground organization, and, in fact, someone who has more volunteers will be in better shape than somebody with national name ID. That might favor a Mitt Romney on the Republican side or a Barack Obama on the Democratic side. I think it's really too early to tell. Part of what your question goes to, and this gets a little bit complicated, we have a bizarre way of choosing who wins the nomination. It's not the popular vote, in most cases. It's the number of delegates that are selected. And a delegate-selection process is different in every state. And in some states like New York on the Republican side, it's winner take all. Whoever gets more popular votes in New York gets all the delegates for New York.

The Democrats in New York have a proportional system by congressional district so that whoever wins the most votes in an individual congressional district in New York, and there are 33, I think, maybe 27, but a number of them, gets the delegates. Republicans in California have a winner take all by congressional district. If you win the whole state of California, you only get 14 delegates. The other 159 delegates in California are chosen three at a time from the different congressional districts. So somebody with high-name ID may not do terribly well in California on the Republican side, and a candidate who can go in and identify the 2000 Republican voters in the most Democratic congressional district in Los Angeles, gets as many delegates as the candidate who wins Orange County, California, the most Republican county in the country. So it gets very -- the chess match that the campaigns will play to determine where you want to get your delegates to get the majority of delegates in the conventions, will be different from a popular vote calculation. Just why, I have no idea.

QUESTION: I'm still a little bit confused about the role of big corporate money. On one hand, everybody talks about the big money. On the other hand, there are all these limits and restrictions. I understand that one person has a limit of 2,300. Of course, one person who has 2,300 is less important than a person who can organize other people who have also 2,300. So, but what would a big corporation like Bank of America, Forbes, Pepsi do to get influence on a campaign? They can form some political action committee but they are limited as well? I'm still confused.

MR. GINSBERG: Well, the -- American election law has for the last 100 years tried to minimize the role -- the direct role of corporations, and unions, for that matter in elections. The way our laws read now is that corporations are prohibited from making direct contributions from their treasuries to federal campaigns. Just to confuse -- to show you why it's confusing, there are 23 states that allow corporations to give to state candidates. But on the federal level, so for presidential elections, no direct corporate contributions. A corporation can form a political action committee in which its individual employees are allowed to give up to $5,000 a year to that political action committee. And the political action committee is allowed to contribute $5,000 per election to a federal candidate. That, frankly, is a fairly minimal amount.

What some corporations have chosen to do, and unions probably more so than corporations, is to engage in a variety of non-direct support for candidate political activities. For example, the unions are very proficient at doing get-out-the-vote drives. And so you'll see a lot of voter registration projects being done with corporate and union money. After McCain-Feingold and the rise of 527 committees, you saw some corporate money and union money flowing to 527s and 501C tax-exempt organizations. Those groups would do things like run issue ads. In other words, nothing that advocates the election or defeat of a specific candidate, but says call Senator X, tell him he's wrong on taxes, without mentioning the election. And I think corporations and unions feel that that's a tactic that can be successful in terms of setting the agenda for a campaign. So that's sort of the rule.

MODERATOR: Question? Go ahead.

QUESTION: Nevena Mandadjieva,Bulgaria News Agency. Historically speaking, how fair is to make conclusions about the success of the candidates based only upon the amount of money they have raised during the race? Thank you.

MR. GINSBERG: That's an excellent question. The record is mixed. There are candidates who have shown that they are an inevitable candidate by winning the money race. George W. Bush in 1999 and 2000 is the perfect example of that. Al Gore pulled away from Bill Bradley in the money race. On the other hand, there are candidates like Phil Graham and Steve Forbes who have raised the most amount of money early and they've not been able to sustain it with political victories. So, I think winning the money race, especially the first-quarter money race, is not indicative of a sure thing that you're going to win the election. But it sure helps to have money and you'd rather have money than not have money. But it's not -- it certainly is no guarantee that somebody's going to win.

QUESTION: Hidenaka Kato from Nikkei Newspapers, Japan. What do you make of the fact that the Democrats this time are raising more money than the Republicans, and how much of the interest fundraising create in that reality?

MR. GINSBERG: I think that the fact that the Democrats have raised more money than the Republicans evidences that democrats are at this stage of the campaign more eager and engaged than Republicans, and I think it's reflective of the fact you've got an incumbent Republican president with relatively low poll numbers. I think Democrats have been out of power for a long time and, therefore, are sort of naturally hungrier and more engaged. I don't necessarily think that is an indication of how the election will go in the long run. At this stage in 2004, the Republicans were way ahead of the Democrats in terms of money raised. Once there was a nominee, Senator Kerry caught up virtually to President Bush in the amount of money, and the Democrats ended up with about the same amount of money as the Republicans. So I'm not -- I'm not sure what ultimate conclusions you draw on the effect over the long run. But I think for right now it is fair to say that the Democrats appear to be more energized than the Republicans. I suspect once there is a Democratic nominee, Republicans will get much more energized. So I'm not so terribly worried about that, putting on my partisan hat.

In terms of the internet, it's very interesting. Each and every campaign is trying very very hard to raise money on the internet, and there are many innovative programs that the campaigns are doing to try and bring that in. I think Senator Obama's success in raising money shows that they did an awful lot with the internet. And I think the internet is a great potential tool. I also think that people are trying to drive traditional donors to make contributions on the internet because it's faster. If you agree to make a credit card contribution on the internet, then that's money that's available to the campaign right away as opposed to having to put a check in the mail and wait. So that people who receive direct mail and in the old days would have put a check back in the envelope, are now being urged to go online to make their contributions.

Telemarketing programs where people call up and ask for donations are asking people to contribute online as opposed to writing out a check and putting it in the mail. It's more convenient for everyone, frankly. So I don't know if you call that internet fundraising or using the internet to complement traditional means of fundraising.

QUESTION: Thank you. Hiroki Sugita, Kyodo News, Japanese News Agency. Could you go a little bit to why Mitt Romney is at this stage ahead of either candidate and why Senator McCain is behind?

MR. GINSBERG: Yes, I'd be happy to talk about that, admitting my role in the Romney effort. I think Governor Romney has the -- had a great advantage in having a varied background and knowing a lot of different people from a number of different walks in life; from his days as a venture capitalist and helping a lot of people make a lot of money when he was running Bain Capital and Bain Consulting to people he met when he came in and rescued the Salt Lake Olympic Games, to his days at Harvard Law School and Harvard Business School, his affiliation with the Mormon Church helps. In other words, he has a varied background with big network from outside of Washington because of his varied career and background. And I think the number of different networks you can tap into helps. He was head of the Republican Governors Association, met a lot of people doing that.

I think Senator McCain has been in Washington for a long time, and so I'm not sure that the networks were as developed. And I think you need to spend a lot of time going out asking people for money, and as he said, he was busy with his duties in the Senate.

QUESTION: Hello. Thank you. I have a question. You have mentioned the importance of fundraising ability, but as you mentioned, you know, if you win big money, but doesn't mean you have a victory in election. So I want to know besides the money fundraising, what's the most critical factor that affects in your presidential election, especially in 2008?

MR. GINSBERG: Well, let me give you two if I could. I think the single most important factor is the candidate and his or her message and the ability to articulate where the country should go in the future. That's something that you don't see in fundraising, necessarily, but you do see in the debates as they start up and in campaigning and the way the individuals present themselves and articulate their positions. I mean, there's no substitute for an attractive candidate with the right message. That's the single most important thing in any campaign, far more important than the money.

Secondly, I think that the other tranche of that, the other part of that is having a campaign organization with people on the ground who can connect with voters directly. And that is something that having good fundraising numbers can help you succeed with. In other words, you need the money to be able to get your message out to enough people so that they can hear your candidate's message, and then you need people on the ground to be able to contact voters and get them to the polls.

QUESTION: Thank you. Strader Payton, TV Tokyo. Given the earliness of the calendar this year and the amounts of money that have been raised, what are the prospects for some of the major candidates that you mentioned earlier that are not candidates yet? There seems to be a lot of interest like Thompson, Gingrich, Al Gore?

MR. GINSBERG: I think -- I think on the public track there's a great deal of encouragement for them to jump in. I mean there are temptations because no candidate is running away with the election right now. There is no inevitable nominees we've sometimes had at this stage. I think that they are underestimating the amount of work that all the other candidates have put in so far in terms of developing organizations, developing networks, finding people to help them run the races. There's no substitute really for the candidate's time and the number of folks you have helping you, and I think that those candidates who have not yet gotten in and aren't contemplating getting in for at least a few more months, will find it's a pretty steep hill, not insurmountable, but really pretty steep.

QUESTION: Christian Wernicke, Suddeutsche Zeitung. I'd like to come back to the -- always mystified in front of the big donors. I mean we have this cap of the $2,300 per year. On the other hand, we read all these stories how important it is whether Soros will go for Obama or some Hollywood guys go either for Clinton or Obama. If they only have $2,300 on hand, okay, they can collect money from other people who also have a little bit more than I have. What are the means of rich people, these key figures? Why are they so important in the American media perception for the money race? Are there any tricks that you haven't mentioned yet -- how they get the money in the game?

MR. GINSBERG: I've taken the lawyer's oath not to reveal all my secrets. And you're also asking me to analyze the American media mind which may not be so fair either.

Look, I think we've always had sort of a fascination with big money, and if you are a big donor, you bring a couple of things to a campaign. Number one is you bring some star power and prestige. That is, as you've probably noticed, the campaigns look for validation in terms of the people who they have signed up as supporters, and that certainly includes fundraisers, and as you put it, rich people with big names. Those rich people with big names also do bring networks, and it is very important for campaigns trying to raise this much money to have their key supporters going out and recruiting other people. And you can't minimize the importance of fundraising networks. And that's not only sort of big donors who have them, but you know, lots of people in the country have friends and chains and they get people involved. And that's actually sort of the fundamental of what this country has always been about and ought to be about.

Now, if you're a rich person and you want to use your own money to impact an election, the law does allow you to do a few things. An individual can spend an unlimited amount of money of his or her own personal funds doing what's called independent expenditures which is putting ads up on the air, and they're allowed to do that. A form of that was what you saw in 2004 with the 527 groups in which wealthy (end of side A) -- elections.

QUESTION: Daniel Anyz, Hospodarske, Czech Republic. I wonder, you mentioned that the candidate who are not candidate but would like to enter have not a big chance. In fact, one theory is that only Al Gore could make it because of the ID (inaudible). So what is your opinion on this? And then you said that Republican voters become energized once the Democratic candidate is chosen. Which one of the candidates would energize the Republicans most?

MR. GINSBERG: Mrs. Clinton would energize Republicans the most. John Edwards -- John Edwards would as well because trial lawyers and Republicans are not always an easy fit. And your -- Al Gore. Al Gore is -- everyone knows who Al Gore is, so therefore, if he got into the race, it would be far easier for him than for your normal candidate to jump in at the last minute. So he does have an established network. He has gotten very favorable ratings from the core Democratic base because of An Inconvenient Truth so that it would be, I suspect, far easier for Al Gore to jump into a race late than virtually anybody else in either party.

QUESTION: Yes, Hung Choi, Munhwa Daily from Korea. Sometimes the foreign countries might be more interested in the results of a presidential election in the U.S. rather than the U.S. citizens because of, you know, the new administration foreign policy towards their countries. So my question about -- could you tell us some cases in foreign countries have tried to influence, you know, I mean in terms of fundraising or their ethnic group in the United States to organize or the (inaudible) administration. So could you tell us some cases of how foreign countries have some, I mean, some voices or try to help --

MR. GINSBERG: That's an interesting question. Individuals who are not U.S. citizens or have green cards are, of course, not permitted to contribute in American elections. But there are a number of communities who are extremely well organized and have managed to band their membership together to support individual candidates over the years with, I think, varying degrees of success. I'm not sure who the individual communities might be who have been most successful, but there certainly have been efforts among constituency groups to try and do that.

QUESTION: Hello, my name is Aki with Tokyo newspaper. I have a question about the rich people influence. First, I'd like to know what is their motivation to donate and, for example, if you own a big business then don't you think it's better to make clear who you want to support until who going to win? So I don't know what is their motivation of supporting in early stage to somebody.

MR. GINSBERG: I do my best to meet as many rich people as possible, and I think it's very hard to generalize on that. I think rich people, poor people, middle-income people have different reasons for wanting to get involved. I think that there are many people who get involved simply because they agree with the views of the individual and go out and support them. I think there are some people who look at it from the point of view of what's going to be best for me and maybe a rich individual who owns a company or a poor person who wants the government to do certain things for them. So I think that the motivations of -- I think motivations vary a good deal. I think that it is always better for people to be involved in who their leaders are. And so the system in this country which includes being able to contribute, but only being able to contribute a certain amount, is really designed to encourage as many people as possible to become involved. And even with all that encouragement, we don't do a terribly good job. I mean if 50 percent of -- ah, you're playing my song -- if 50 percent, if 50 percent of the eligible voters in the U.S. turn out and vote, we consider that a great victory which, frankly, is a pretty low number.

MODERATOR: We have one last one here.

QUESTION: Yeah. You said that Governor Romney is the only one who has TV ad out there. Is it because he wanted like enhance his name recognition, or what was the reason?

MR. GINSBERG: Sure. I mean he's a candidate who the more people can see and hear him speak and articulate his message, the better he does and the better he will do. And so he's running essentially against two people, John McCain and Rudy Giuliani, who have almost universal name identification, and he doesn't. He's not nearly as well known as they are. And so early television is the most effective means of increasing his visibility amongst a large number of people. The more people see him the more they like him. I'm sorry?

QUESTION: How much is it for a 30-second ad at this moment?

MR. GINSBERG: Oh, it varies. Buying time is a very very complicated thing, but it's different in each market that you buy. Duncan Hunter put up one ad very briefly. I had him as political action committee, and now has an FEC complaint filed against him for doing that.

MODERATOR: Okay, thank you all very much.