Clinton Campaign Facing Deepening Debt to Advisers

[babylonsister]

Clinton Campaign Facing Deepening Debt to Advisers
By Matthew Mosk
Washington Post Staff Writer
Tuesday, April 22, 2008; Page A06


The financial gap between Democratic Sens. Barack Obama and Hillary Rodham Clinton has grown increasingly pronounced during the presidential primary season, and the Clinton campaign is now shouldering sizable debts to several key consultants and advisers, campaign records show.

Clinton entered April with about $9.3 million in cash on hand, but she also carried about $10.3 million in debt. In contrast, Obama had $42.5 million available to spend at the start of April and reported $663,000 in unpaid bills.

snip//

Clinton's volunteer fundraisers acknowledged yesterday that they are stretching to find untapped sources, and that they increasingly have relied on the Internet, which finance co-chairman Hassan Nemazee called a "highly volatile" place to get cash. Reports filed with the Federal Election Commission last night indicate how difficult the road could become if the Internet cannot produce a steady stream of donations.

While debt owed to the firm run by the campaign's recently deposed top strategist, Mark Penn, began to accumulate a year ago, with $277,147 reported last April, his tab grew to $4.6 million by the end of March. Adviser Mandy Grunwald's consulting firm began extending services to Clinton's campaign more than a year ago, and is now owed $528,480, the report shows. The campaign owes MSHC Partners, a mail and microtargeting firm, nearly $1 million. And for three months the campaign owed $240,000 to senior adviser Harold Ickes's database firm, Catalist.

Campaign finance experts said yesterday that large extended debts owed to professionals could create legal trouble for the campaign if they remain unaddressed.

more...

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/21/AR2008042102793.html

[Gore1FL]

1. The irony is

They are the very ones who sunk her and made it so hard for her to raise the money to pay them.

[dkf]

2. Legal trouble? Anybody knows how this works?

Campaign finance experts said yesterday that large extended debts owed to professionals could create legal trouble for the campaign if they remain unaddressed.

"Anybody who extends credit to a campaign runs the risk of either losing money or violating the law," said Jan Baran, a Republican election lawyer who defended a mail house for not collecting debt from a campaign.

[babylonsister]

3. If they don't pay their bills, people will start demanding their money.

Bill collectors might already have been hired to recoup some of the $ the Clinton campaign owes. I don't know how extending credit would violate the law though.

[dkf]

4. Is it because unpaid bills get turned into contributions?

and businesses can't contribute to campaigns?