SHE IS HEMORRHAGING CASH
Kamala Harris is dramatically restructuring her campaign by redeploying staffers to Iowa and laying off dozens of aides at her Baltimore headquarters, according to campaign sources and a memo obtained by POLITICO Wednesday, as she struggles to resuscitate her beleaguered presidential bid.
The moves come as Harris is hemorrhaging cash and in danger of lacking the resources to mount a competitive bid against better-funded rivals in Iowa. The overhaul will touch nearly every facet of Harris’ operation, with layoffs or re-deployments coming at headquarters, as well as in New Hampshire, Nevada and her home state of California, a Super Tuesday prize that her advisers once viewed as a big asset.
Campaign Manager Juan Rodriguez will cut his own salary, according to the memo, which was just over $10,000 a month in the third quarter of the year. Harris’ consultants will also have their payments reduced and the campaign plans to trim and renegotiate other contracts to slash overhead. Along with getting back in the black, a big motivation behind the cost-cutting decisions are plans to stash enough resources for a seven-figure media buy in the weeks before the Iowa caucus.
The major shake-up is the latest strategic maneuver to help rescue a campaign that was still being viewed as a likely early-state juggernaut three months ago after Harris confronted Joe Biden in a debate over school busing. The performance seemed to signal the realization of the promise Harris displayed during her campaign launch before 22,000 spectators in Oakland. Yet it’s been downhill since the summer spike.
Harris is hoping to duplicate the successes of past campaigns that shed staff and came back to win primaries after near collapses the year before — and to avoid the fate of countless other hopefuls who spent too big early and faded late. In the memo, Rodriguez, who oversees the campaign’s budgeting, describes an “incredibly competitive resource environment” — in other words, a keen competition for campaign dollars from larger donors. South Carolina, the other early state besides Iowa that would be key to a Harris turnaround, will be spared of any cutbacks.
“From the beginning of this campaign, Kamala Harris and this team set out with one goal — to win the nomination and defeat Donald Trump in 2020. This requires us to make difficult strategic decisions and make clear priorities, not threaten to drop out or deploy gimmicks,” Rodriguez wrote, a reference to rival Democrats like Cory Booker, Julian Castro and Andrew Yang, who used attention-seeking deadlines and devices to raise money. “Plenty of winning primary campaigns, like John Kerry’s in 2004 and John McCain’s in 2008, have had to make tough choices on their way to the nomination, and this is no different.”
Harris faced a wave of skepticism over the summer as she flat-lined in polls and spent much of her time at big-dollar fundraisers and away from the campaign trail and news media. As she’s pivoted to Iowa — Harris plans to spend Thanksgiving there — her campaign appears to be headed in the opposite direction: She’s holding fewer than 10 fundraisers over the month of October, a person familiar with her schedule told POLITICO.
That’s deepened concerns among Democratic officials and some campaign aides in recent days about whether she’ll have the money to compete in early states where she’s being swamped by better-polling competitors.
Further fanning these fears is what some aides described as a feeble digital fundraising effort to open the latest quarter. Rivals Amy Klobuchar and Pete Buttigieg raised more than $1 million apiece within 24 hours of the October debate, with Klobuchar putting the number at $2 million in the days following their effective confrontations of Elizabeth Warren.
Undergirding Harris’ weak fundraising performance and overspending is her increasingly fragile standing in Iowa polls and lack of a standout moment the past four months. In the third quarter, which ended Sept. 30, Harris’ fundraising was flat at $11.8 million. She spent $14.6 million — $2.8 million more than she raised and nearly double what she spent in the prior quarter as she built out her operation. Staffing and payroll taxes, at $3.8 million, accounted for Harris’ largest line-item. Her campaign also deferred more than $900,000 in debts, an accounting move that inflated her cash-on-hand figure, which stood at $10.5 million.
“It’s an unsustainable path,” said Ami Copeland, former deputy national finance director for Barack Obama’s 2008 campaign. Assessing Harris’ third-quarter fundraising blitz, Copeland added, “If that’s the best you’ll squeeze out bringing all of the assets to bear, it’s looking very dire.”
Biden had nearly $9 million on hand, without carrying debts, and his campaign has since all-but embraced a super PAC to help stabilize his standing. He’s endured weeks of questions about his viability while raising $4 million more than Harris and holding virtually the same amount of cash.
Before the staff moves came to light, a number of Harris aides said they were growing frustrated by what they viewed as repeated, crisis-driven strategy shifts. Since settling on her Iowa-focused strategy, Harris is making her fifth trip there this month with stops in Council Bluffs, Newton and the state Democratic Party’s big Liberty and Justice Celebration Friday night in Des Moines. She also traveled three times to South Carolina.
The question surrounding the Harris campaign is how to turn it around. Low-polling candidates — even those with a conceivable shot at placing in Iowa — seldom raise large sums online, particularly without viral moments. Even those can be fleeting. Harris’ persistent problems come as she’s sought to raise her profile in recent weeks with a steady diet of TV appearances around Democrats’ impeachment efforts of Donald Trump.
Over the weekend, she drew attention for boycotting a criminal justice event at a historically black college in Columbia, S.C., after Trump was given an award and most students weren’t allowed to participate. Harris returned to speak after the awarding sponsor was removed.
“I don’t think a viral moment is enough to do it,” said Connor Farrell, a Democrat fundraising consultant who works with progressives. “It might give you a sugar high, but when you are trailing by $10 million or $20 million in the bank, you need a boost that’s more fundamental.” To turn it around, he added, “She needs some really good polling in the early states.”
Rodriguez wrote in the memo that Harris has raised more than $35 million from over 350,000 donors, with an average contribution of $34. Harris’ competitors outside of Biden, however, all improved over time. Bernie Sanders, Warren and Buttigieg have all steadily amassed tens of millions of dollars over the course of their campaigns.
Harris’ biggest financial hauls have come on the back of huge moments for her campaign: Her January launch and the June debate confrontation of Biden. Harris raised over $4.1 million from June 27 to June 30, according to campaign finance filings — more than $1 out of every $9 she raised over the entire campaign through Sept. 30.
That burst of momentum carried into early July. Though filings showing Harris’ online fundraising from July 1 onward will not be available until early next year, the credit card processing fees Harris’ campaign paid in July to ActBlue, the Democratic online fundraising platform, show that she raised close to $3 million online that month.
But rather than set a new pace for the campaign, Harris’ debate bump faded over the rest of the third quarter — and with it her fundraising momentum, according to sources and her campaign finance filings. Harris brought in little more via ActBlue in August and September combined than she did in July, finishing the quarter with $6.4 million raised online, including relatively quiet days around other Democratic debates.
The same thing happened at the beginning of Harris’ campaign: an early burst of unsustainable momentum followed by a slide into the fundraising doldrums. An earlier filing from ActBlue showed that Harris raised over $100,000 online in a day 24 times in February and March amid excitement for her new campaign. But she hit that mark just four times in all of April, May and the first 26 days of June, according to the filings.
Leading up to the first debate, Harris’ online take even dipped below $10,000 on two days, and she went a full four weeks without a $100,000 day on ActBlue.She raised $938,000 online in those four pre-debate weeks, compared to $1.7 million for Biden, $5 million for Sanders and $5.7 million for Warren.
Harris filled the gaps of her uneven online fundraising efforts with lucrative in-person events. She held 70 fundraisers over the spring and summer, and a dozen alone over the last week of the third quarter. This month, things have been decidedly slower, with the most high-profile event coming last Thursday, when California Gov. Gavin Newsom chaired a fundraiser in Brentwood, Calif.
Donors contacted by POLITICO said Harris’ failure to take off is months in the making but has coincided with her crash in polls — and it’s been exacerbated by her recent spirals. That she was lapped by Buttigieg, a small-city mayor from Indiana, and nearly overcome in the third quarter by entrepreneur Andrew Yang, only makes it worse.
“She’s from fucking California. The idea that you don’t have support of high-dollar donors doesn’t make any sense,” said a Democratic donor who maxed out to Harris’ campaign but is disappointed by her inability to build a large-scale fundraising operation. “I blame her.”
DAWG SAYS: THIS IS ONE SCARY PERSON IF IN THE WHITE HOUSE