Matt Brown spent $1.5 million to build name recognition, but a fundraising scandal slowed contributions.

01:00 AM EDT on Friday, April 28, 2006

BY SCOTT MAYEROWITZ
Journal State House Bureau

PROVIDENCE -- Matt Brown just didn't have enough money to make it through the rest of the race.

His 14-month-long bid for the U.S. Senate cost nearly $1.5 million -- that's $3,534 a day on everything from staff to airfare to paper clips.

But Brown needed more.

"In my determination, we were not going to have enough to go the final distance," Brown said yesterday.

The Democratic candidate dropped out of the race Wednesday, leaving former attorney general Sheldon Whitehouse as the clear frontrunner in the Sept. 12 primary. Whitehouse faces a challenge from Carl Sheeler, who has yet to win any election. Brown, whose first term as secretary of state ends in January, said he won't seek any other office this year, but didn't rule out a future run for office.

"I served my community before I was in government and there are a lot of ways to serve your community beyond government," he said.

Since announcing for the Senate in February 2005, Brown had raised more than $1.7 million. But by the end of last month, he only had $35,000 left for the primary.

He spent more than any other candidate.

At the end of March, Whitehouse had spent $900,000 and had $1.37 million left for the primary. Sheeler only spent $153,000 and had $210,000 left.

The two Republican candidates also had a lot more than Brown. Sen. Lincoln D. Chafee spent $850,000 and had $1.5 million left for the primary. Cranston Mayor Stephen P. Laffey spent only $295,000 and had $900,000 for the primary.

Just last week, after several media reports questioned his viability, Brown proclaimed, "I'm in to win." But in the past few days, Brown and his wife decided it was time to drop out.

Brown took some big risks early on.

He bought a large block of advertising in January to boost his standing in a February poll by Brown University. The $238,000 media campaign appeared to pay off when the poll showed him leading Whitehouse. However, it also left him with very little money.

"Because I began a year ago with . . . much lower name recognition than my opponents," Brown said, "we needed to spend money pretty early and consistently to . . . reach out and talk to Rhode Islanders."

But the bulk of his money went to staff and consultants, a Journal analysis of campaign finance forms shows.

Most of his spending appears typical of a big race. Whitehouse and Brown both spent about 75 percent of their money on staff and consultants.

The Senate does not require its candidates to file reports electronically, so there is little national data on their spending.

Paul S. Herrnson, director of the Center for American Politics and Citizenship at the University of Maryland, College Park, studies House races.

In a typical House campaign, he said, about 40 percent of spending goes to overhead such as salaries, fundraising, consultants and office supplies.

But, he said, when a campaign is gearing up, "it's more likely to spend more money on those activities and then later on . . . spend more on advertising and reaching out to voters."

Anthony J. Corrado, a Rhode Island native and government professor at Colby College, said Brown's spending was "not necessarily atypical" for this point in the race.

"Sure, he's kind of high on the payroll side, but he hadn't been building up the money for the advertising yet -- that would average things out," he said.

It takes money to get more. About 5 to 10 cents is needed to raise one dollar, Corrado said.

A good example of this is credit card fees.

More donations are coming into races via credit cards these days, especially with the growth of Internet donations. When somebody gives $200 with their credit card, the campaign doesn't get all of that money -- some of it goes to companies that process the transaction.

Brown spent more than $21,000 for such processing fees.

A large chunk of the $440,000 spent on consultants went to fundraising. Brown also spent heavily on pollsters and canvassers. But his top paid Washington talent was Reger Research who got more than $62,000 to do candidate and opposition research.

But Corrado said it's not the spending that killed Brown, it was a fundraising scandal.

In February, it emerged that the Brown campaign had engineered an unusual series of contributions -- $25,000 in all -- from state Democratic committees in Maine, Massachusetts and Hawaii. Then at Brown's behest, a handful of his contributors gave a slightly larger sum back to the state parties.

That controversy appears to have hurt his ability to get new money.

Brown's best fundraising period was the first one, where he brought in $500,000. In the most recent quarter, he was only able to bring in $234,000. Whitehouse, in comparison, raised $531,000 in the first quarter of this year.

As money got tight in January, Brown started loaning his campaign some cash. At first it was $59,850. Then another $11,000. Then $5,000. In February, Brown made a series of small loans -- $500, $1,000 and $2,000 -- apparently to help the campaign deal with cash-flow problems.

At the same point, Brown changed his payroll practices, going from every two weeks, to sporadic, odd intervals.

Asked about possible cash-flow problems, his campaign just said the "staff were flexible with their payment schedules."

In total, Brown lent his campaign $91,000.

Will he get that money back?

"I hope so. I'm going to ask people for help to pay down the debt for sure," Brown said.

Does he expect the Whitehouse campaign to help with that?

"Don't know," Brown said. "We just got out."

smayerow@projo.com / (401) 277-7513

Matt Brown

In his 14-month race for the U.S. Senate, Matt Brown spent $1.5 million. Here is a breakdown of where that money went:

Payroll: $525,000

Consultants: $440,00

Advertising: $240,000

Office overhead: $147,000

Travel: $48,000

Other: $83,000

Source: Journal analysis of Federal Elections Commission filings.