The Obfuscation Report

Obama Camp faces major obstacles in Plan to help Clinton Pay Off Debt.

by Thomas Edsall at Huffpo

Top officials of the Barack Obama campaign are privately exploring ways to help Hillary Clinton discharge her debts and pay back the $11.43 million she has loaned her organization, but they are running into two major stumbling blocks.

The first is obvious: the deep and growing animosity of Obama supporters towards Clinton, whom they see as raising issues of race and 'elitism' that will hurt the Illinois Senator in November.

In an interview with USA Today for example, Clinton declared: "I have a much broader base to
build a winning coalition on," citing an AP article "that found how Sen. Obama's support among working, hard-working Americans, white Americans, is weakening again, and how whites in both
states who had not completed college were supporting me."

The second is less obvious: Mark Penn.

For many Obama backers, Penn, the former chief strategist for Clinton
and head of one of the biggest PR-lobbying conglomerates in the nation's
capital, is the quintessential Washington insider, capitalizing on political
connections to become a multi-millionaire.

The immediate problem with Penn -- whose conflicts of interest plagued
the Clinton campaign and ultimately led to his being publicly, if not
privately, repudiated -- is that if Obama helps Clinton pay off her debts, a
big chunk of those debts -- an estimated $10 million or more -- is owed to
Penn.

Penn is the CEO of Burson-Marsteller, which has "a global network of 94
offices and 1600 employees that brings world-class public relations to
companies around the world."

Burson-Marsteller is one of the 246 companies owned by WPP, a leading
global advertising and marketing services group. WPP controls a powerful
array of public relations, advertising and lobbying companies, including
Hill and Knowlton; Dewey Square; Ogilvy and Mather; Public Strategies Inc.;
AGB Nielsen Media Research; Quinn Gillespie and Associates; Timmons and
Company; Wexler and Walker Public Policy Associates; Young and Rubicam
Brands.

Penn, who remains a top adviser to Clinton, was forced to step down as
the face of the Clinton strategy team after disclosures that he was meeting
privately with the government of Colombia to promote congressional approval
of a trade agreement which Clinton - and her most loyal voters -- oppose.

Consideration by the Obama camp of providing financial help to Clinton
would be part of a peace-making process in the event that she withdraws from
the presidential nominating contest.

Under federal campaign finance law, the Obama campaign cannot directly
pay off Clinton's debts, or the $11.43 million she has loaned the campaign,
because that would violate campaign contribution limits. But if Obama is the
nominee, he and his donor base could provide invaluable help to her in
raising money through signed appeals, joint fundraisers and by other
methods.

The Obama campaign does not want to be identified as having discussions
about Clinton's finances. Obama aides used the term "chit-chat" to dismiss
any such discussions.

Many of Obama's grassroots and netroots backers appear to be outraged
at the thought that the Obama campaign might step in to lend a hand to get
Clinton out of a financial hole -- and out of the race -- as was reported
Wednesday.

The Huff Post web site was flooded with more than 1,200 complaints on
this score:

"No! No! No!" wrote a commenter using the web name 'Realbluesky'. "The
Clintons have proven what kind of scum they are." 'Dbrockx' wrote: "Why is
she being rewarded for disrupting the Democratic party and trying to
sabotage Obama?" 'Amber09' pulled no punches: "The Clintons would never help
Obama if this was reversed! They would be laughing they asses off that a
black man could dare to think he could beat the Clinton machine! The
Clintons created the mud pond, let them now stay in the mud they created!"

Both Obama and Clinton have broken all Democratic fundraising records.
Through the first quarter of this year, Obama raised $234.7 million, and
Clinton $189.1 million. As of March 31, the date of the most recent FEC
filing, Obama had $51.1 million in the bank and just $662,784 in debt, for a
net cash position of $50.4 million; while Clinton had $31.7 million in the
bank, debts of $15.2 million, and had loaned the campaign $6.4 million. (The
FEC lists debts and loans separately.) More recently, Clinton disclosed that
she had made her campaign additional loans, bringing the total amount she
has loaned to her effort to $11.4 million. At the same time, her campaign was
running close to broke for much of last month. Details of fundraising and
spending for the month of April do not have to be filed until May 15.

Money is a central issue in the delicate negotiations that many expect
to lead to a Clinton withdrawal. A winning candidate often offers to do
whatever is legal to help a loser pay down debts. In this case, there is
exceptional animosity between the two camps. Furthermore, Penn's interest in
any negotiations are sure to be pressed very aggressively by the Clinton
campaign's new Chief Operating Officer, Howard Paster. Paster was brought in
immediately upon Penn's retreat, and, as it happens, Paster is Penn's boss.
Paster is the executive vice president for public relations and public
affairs at Burson-Marsteller's parent company, WPP.

In his new capacity as COO of the Clinton campaign, Paster is almost
certain to be central in deciding how much of any money Obama might help
raise for Clinton is used to pay off the debt to Penn. This set of
relationships will undoubtedly impact the enthusiasm of Obama donors for a
Clinton-Obama pact.