Has the playing field become so tilted that big money calls the shots while the average American is left out? March campaign data offer a mixed answer.

The March figures are available at opensecrets.org.

Obama now has a healthy funding lead over Hillary Clinton–a lead so large that it equals both Clinton and McCain’s cash on hand with almost ten million to spare. This funding lead is what lies behind the controversy about more debates. Debates are free exposure, so the Clinton people are pushing for more of them.

Contrary to the myth that Obama is outspending Clinton by quite a bit, spending figures are fairly close: $163 million for Obama to $157 million for Clinton.

Two additional columns not shown reveal that Obama has $51 million cash on hand to Clinton’s $31 million. The other notable data not on this chart is that Hillary Clinton’s debt continues to grow–now over $10 million. Clearly Clinton is borrowing against the future, hoping to pour funds into the current contests. If you do the elementary accounting and subtract debt from cash in hand, then Clinton is in serious trouble in trying to keep up with Obama.

Almost half that ten million is owed to–guess who–former Clinton pollster and campaign advisor Mark Penn, who according to the New York Times is owed $4.5 million. Penn’s debt would equal one-third of McCain’s total war chest. Not bad for a guy who got fired. As the saying goes, “Nice work, if you can get it.” Then there is Clinton advisor Harold Ickes, whose for-profit company is owed $245,000. Washington campaign finance lawyer Ken Gross put the debt in perspective:

We are not used to seeing eight-figure debt in a campaign.

McCain’s low totals may be misleading. With no reason to spend money until the Democrats have a candidate, he can continue to pile up contributions. The question will be whether his donors can make up the current considerable gap between him and Obama. If not, this would mark the first campaign in a long time where the Democratic Presidential candidate has enjoyed a substantial funding advantage. If there is any more telling gauge on what George W. Bush has done to the Republican Party, I don’t know what it is.

This sets up an improbable scenario in which the Republican candidate opts to go with public financing. It also backs the Democrats into a corner because they have the financial advantage, but McCain would own the moral high ground, especially given the perception that Obama pledged to run his campaign on public funds if the GOP candidate did the same.

If he gets the nomination, Obama would be wise to leverage this advantage into an iron-clad commitment that all future Presidential campaigns be run on public funds. This would finally accomplish the long-sought goal of lessening the impact of big money on Presidential elections. In addition it would allow Obama to move those funds to other Democratic races to help offset the GOP’s advantage in state contests and help insure that there is a Democratic Congressional minority that supports his agenda.

The Funding

Much has been made of Obama’s many small donors. Only about $14 million of Obama’s campaign contribution come from donors pledging over $4,600. An astounding $20 million comes from donors pledging less than $1,000. Total donors at this amount is over 57,000 people. This is unprecedented. No Presidential campaign has ever raised so much money from those William Jennings Bryan called the common people since perhaps Bryan himself.

These small donors hold out the promise that Obama could use them much as Ronald Reagan used his supporters, calling on them to help when the GOP threatens to tie up needed legislation that would help to level the playing field that has become so tilted under the Bush Administration. Finally, this amazing number of small donors should put to rest the idea that Obama does not resonate with the average American.

On the other hand, Clinton’s campaign depends heavily on large donors. $31 million comes from donors pledging over $4,600, while only $10 million comes from the under $1,000 group. To put this in perspective: Hillary Clinton owes Mark Penn almost half as much money as her entire total from small contributors! Total donors at this level is 32,000–less than half Obama’s total. This is a major reason why the Clinton campaign may be facing financial trouble, because her heavy dependency on large donors means many of them are probably maxed out and cannot contribute more.

The Donors

The last report identified some interesting trends in the big donor lists of each candidate. For Clinton those included the drop in rankings of EMILY’s list. For Obama it was the appearance of UBS AG, a Swiss company that, according to their web page, is the leading global wealth manager and one of the largest global asset managers. According to a February 27, 2007 story by World Law Direct (a major online provider of legal services):

Swiss banking giant UBS has agreed to pay $100 million, one of the largest fines ever against a securities firm, after admitting that some former employees had violated Federal Reserve Board rules by transferring U.S. currency to Cuba, Libya, and Iran.

UBS also was involved in the subprime lending fiasco leading to the resignation of UBS head Peter Wuffli.

The other story concerned changes in funding by some of the big donors. Goldman Sachs, for example, switched from Clinton to Obama. Technology rivals Microsoft and Google each elected to put their money on different candidates with Microsoft funding Clinton and Google Obama.

Here are the March comparisons with Obama first, then Clinton:

OBAMA

CLINTON

For Clinton, the good news comes from EMILY’s List which increased its contribution by over $100,000 from February. EMILY’s List played a big role in Clinton’s win in Ohio, her winning the popular vote in Texas and Tuesday win in Pennsylvania. It may not be too much to say, EMILY’s List may have saved the Clinton campaign. It has made a string case for the power of progressive women in a campaign.

Besides EMILY’s List there are no political PACS on either candidate’s list. ActBlue was one of John Edwards’ top supporters, but with Edwards now out of the race and holding a strict neutrality, it has not shifted funding to either of the others.

The other interesting entry is the University of California which now has risen to second place on the Obama donor list and appears for the first time on Clinton’s list. Lest some Californians wonder what their University is doing involved in a political campaign I quote from the opensecrets.org site:

The organizations themselves did not donate, rather the money came from the organization’s PAC, its individual members or employees or owners, and those individuals’ immediate families.

In other words, faculty members, employees and students at the University are the contributors. In addition to the University of California, the Obama campaign lists Howard University and the University of Chicago as major donors, while Clinton has only the one academic institution.

Of the other donors, Goldman Sachs continues to be the biggest spender. It increased its February contribution to Obama by $100,000, but its contribution to Clinton by only $27,000. J.P. Morgan, which bought out Bear Stearns, increased its Obama contribution by a little over $70,000 and its Clinton contribution by about half that.

Both Goldman Sachs and J.P.Morgan also appear on McCain’s donor list although only in the $100,000 range. One safe prediction is that this will change substantially as the campaign moves along.

Troubling Thoughts

The huge donations made by financial firms, all involved in the current crisis, continue to be troubling. I have predicted that as the mortgage crisis and its financial reverberations continue to grow, the economy will become the issue of the campaign. There seems little doubt it will be number one on the table when the new administration and Congress take office next January.

As I noted last month, this domination by financial firms is a change from the mix of donors that funded Bill Clinton’s successful 1996 run. Among Bill Clinton’s top twenty donors were AT&T, Sprint, Raytheon, Energy Corp, and Walt Disney. His number one contributor was the accounting firm of Ernst and Young.

Here is what opensecrets had to say about Goldman Sachs:

It has been a major proponent of privatizing Social Security as well as legislation that would essentially deregulate the investment banking/securities industry.

As for J.P. Morgan, besides its role in the Bear Stearns bailout, here are its political priorities:

As expected, the firm has lobbied heavily on legislation that would affect the nation’s financial industry, including bankruptcy reform and banking deregulation.

It is not too much to say that as next year dawns, these financial firms will make solving the current crisis as difficult as the drug companies have made solving the health care crisis. One thing for certain, keeping the playing field level will be a major battle a year from now, for as the tilt has grown you can begin to hear the cries for help of those sliding down a slope built by the Republican Counterrevolution.