Palm trees swayed in a warm Florida breeze one afternoon in late
January while we awaited the candidate’s arrival. Four TV satellite
trucks were parked outside the terminal at Page Field in Fort
Myers, and I was among two-dozen or so journalists waiting in the
airport parking lot where about 300 supporters of Newt Gingrich
were gathered to greet the man who, just nine days earlier, had
defeated Mitt Romney in the South Carolina primary.
On Monday, Jan. 30, the day before the Florida primary, the
omens were clear enough that Gingrich was about to be defeated in
the Sunshine State, but none of Newt’s supporters that afternoon in
Fort Myers seemed to suspect that the former House Speaker’s
campaign was on the verge of a catastrophic collapse. Nothing
reported by the news media prepared them for the disasters that
swiftly followed Gingrich’s Florida defeat — his Nevada meltdown
and his fourth-place February finishes in Minnesota, Maine, and
Michigan — leading up to his March 6 wipeout, when Newt won only
his home state of Georgia out of 10 contests on “Super Tuesday.”
This electoral implosion seemed to happen in slow motion, but it
was astonishingly swift in comparison to the long uphill slog that
had preceded it. Gingrich had announced his candidacy in May 2011
and campaigned for six months before pulling ahead of Romney in
national polls in mid-November. Two months later — after being
buried in Iowa by a barrage of attack ads — Gingrich re-emerged as
the victor Jan. 21 in South Carolina. But then it all fell apart in
the span of seven weeks, so that on March 13, despite an all-out
effort, Newt was defeated in Mississippi and Alabama, which his
campaign spokesman had previously described as “must win”
states.
None of those impending humiliations seemed foreshadowed on that
sunny Monday before the Florida primary, when hundreds gathered in
the parking lot at Page Field to welcome Gingrich to Fort Myers.
Newt was still the front-runner, the Jan. 30
Real Clear Politics average of national polls showing him with
30.3 percent to Romney’s 27.8 percent. While the polls in Florida
clearly indicated that Romney would win the Sunshine State, the
conventional wisdom on the eve of the primary was that the fight
for the GOP nomination had now come down to a two-man race between
Mitt and Newt. Rick Santorum, who narrowly won the Iowa caucuses
Jan. 3, had seemingly failed to capitalize on that victory, barely
edging out Gingrich for fourth place in New Hampshire and then
placing a distant third in South Carolina. Santorum cut short his
Florida campaign for a trip home to visit his 3-year-old daughter,
who had been hospitalized with pneumonia, and most of the pundits
were ready to write off the former Pennsylvania senator.
As had so often been the case in the long 2012 campaign,
however, the conventional wisdom was wrong. Today, when Newt’s
presidential hopes have evaporated and conservative leaders are
reportedly seeking some way Santorum can still stop Romney from
becoming the Republican nominee, it is possible to look back to
that January afternoon in Florida and see how badly the pundits
were mistaken.
Santorum’s low-budget campaign, which had made it through 2011
with just $2.1 million in contributions, proved more resourceful
than Gingrich’s better-funded operation, which had collected about
$12.7 million in 2011. Federal Election Commission reports showed
the Gingrich campaign began January with more than $2.1 million
cash on hand, compared to less than $280,000 for Santorum. When
those reports became public at the end of January, many observers
concluded that Newt was best positioned to go the distance against
Romney’s big-money organization — a perception that the Gingrich
campaign was eager to amplify. On Jan. 31, the day of the Florida
primary, Newt’s spokesman announced that the campaign had raised
$10 million in the final three months of 2011 and another $5
million in January. This was true, and anyone could see from the
FEC report released that day how much Gingrich had raised in 2011,
but the official report for January wasn’t due until Feb. 20. A
CBS News reporter noted at the time that Gingrich’s spokesman
“did not, however, provide an amount for the campaign’s
cash-on-hand.” So the question of how fast Newt’s campaign was
spending its money — the “burn rate” — in January would
remain unanswered for another three weeks. No one seemed to realize
at the time that Gingrich’s burn rate was unsustainable, although
the signs should have been obvious that Monday at the airport in
Fort Myers.
Driving to Gingrich’s rally that afternoon, I had listened to
Rush Limbaugh’s radio program and
remarked on my blog that “the commercial breaks were pretty
much wall-to-wall attack ads, Mitt vs. Newt and Newt vs. Mitt. It
seemed as if the anti-Newt ads were the majority.” In fact,
Romney’s campaign and its allied “super PAC” were outspending
Gingrich and his super PAC more than 3-to-1on advertising in
Florida. Newt’s forces could ill afford the reported $2.2 million
they spent on ads in the Sunshine State, and they were also
spending big money for the candidate to travel across Florida for
campaign events in a state where polls clearly indicated Gingrich
would lose by a double-digit margin. On that Monday before the
primary, Newt and his entourage were
flying around Florida aboard a 16-seat Gulfstream jet for five
rallies — in Jacksonville, Pensacola, Tampa, Fort Myers and
Orlando — which drew a combined attendance estimated at less than
1,500.
The Fort Myers event may have been the best-attended stop on
Gingrich’s tour that day. The crowd at Page Field warmly applauded
Newt and his guests, former presidential candidate Herman Cain and
nationally syndicated radio talk-show host Michael Reagan, but
Gingrich’s speech was notable for his resentful remarks toward
Romney. Newt spoke of himself as
leading a “grassroots populist” effort against Mitt and the
“Establishment” in a battle between his campaign’s “people power”
and Romney’s “money power.” Gingrich gave his supporters a
conspiracy-theory explanation of the Romney campaign’s fundraising
advantage. Goldman Sachs and other Wall Street financial interests
that had accepted federal bailout money were now paying for Mitt’s
negative campaign ads, Gingrich said. “Those ads are your money
recycled to attack me,” he told the Fort Myers crowd, promising
that as president he would demand a “thorough audit” to find out
“where the money went.”
No one in the Fort Myers audience seemed worried about where
Newt’s money was going, which eventually proved a far more serious
problem. Three weeks later, when the Gingrich campaign filed its
next FEC report on Feb. 20, the campaign reported that while it had
received $5.6 million in January, it had spent $ 5.9 million — an
average of $190,000 a day — even while the campaign’s debt was
increasing. Although Newt’s campaign had entered 2012 with $2.1
million cash on hand, it had also begun the year with $1.2 million
in unpaid bills, so that the net balance was $900,000. In January,
however, even while the Gingrich campaign’s expenses were
outstripping contributions by $320,000, Newt also added another
$527,000 in new debt. Thus, while his FEC report showed Gingrich
ended January with about $1.8 million cash on hand, this amount
exceeded the campaign’s total debt by only $62,505.
Furthermore, although there was no way to know it at the time,
Newt’s fundraising had already passed its peak. On Jan. 22, the day
after he won the South Carolina primary, Gingrich collected more
than $400,000, the peak of a nine-day period (Jan. 19-27) when the
campaign’s contributions averaged about $198,000 a day. But his
fundraising slumped slightly after Newt fared poorly in two Florida
debates (Jan. 23 in Tampa and Jan. 26 in Jacksonville), then
dropped sharply after Romney defeated Gingrich by 14 points in the
Florida primary.
During the first seven days of February, contributions to
Gingrich’s campaign averaged less than $64,000 a day and, during
the next seven-day period of Feb. 8-14, dropped below $35,000 a
day— a disastrous decline for a campaign that had been spending
more than it took in even during its fundraising peak. Still,
during those weeks when Newt was losing caucuses in Nevada Feb. 4,
Colorado and Missouri on Feb. 7, and Maine on Feb. 11, no one
outside the Gingrich campaign realized how bad their financial
situation had become. Newt’s unsustainable “burn rate” in January
drew little notice when his FEC report for the month was made
public on Feb. 20. Another month went past before the publication
of Gingrich’s February report showed that the campaign was
essentially bankrupt, owing more debt than it had cash on hand.
From late January until the Tuesday before the March 24
Louisiana primary, Newt’s campaign maintained an illusion of
financial viability. We are still two weeks away from the
publication of the next FEC reports that will reveal how much worse
the situation got before March 27, when Gingrich announced the exit
of his campaign manager and a third of his staff.
The spin from Newt’s spokesman was that this “redesigned”
campaign was still aiming to go “all the way to Tampa,” but it
seems highly unlikely Gingrich will make it to the August GOP
convention on his own dime. Newt suffered another embarrassment
yesterday when a health-care think tank he created in 2003, the
Center for Health Transformation,
filed for Chapter 7 bankruptcy. His campaign pointed out that
Gingrich ended his role in the center when he launched his
presidential bid in May, but its bankruptcy was still a
public-relations debacle, prompting University of Georgia political
science professor Charles Bullock to joke, “While health-care costs
have bankrupted many without insurance, Gingrich may be the first
to go broke studying health-care delivery.”
ALL OF THIS BACKGROUND is necessary to understanding the end
game for what is left of Gingrich’s campaign. According to a
New York Times account of a Thursday
meeting between Santorum and conservative leaders, “the
discussion focused on how Mr. Santorum could win the race and what
role Mr. Gingrich might play.” However, it was reported last week
that
Newt met secretly with Romney the morning of the Louisiana
primary. The prospect that Gingrich could be persuaded to drop out
and throw his support to Santorum — who must win the April 24
primary in Pennsylvania to keep his campaign alive — therefore
appears remote. If Newt’s campaign is now deeply in debt, it is far
more likely he would endorse Romney in exchange for a promise of
future financial assistance rather than to risk alienating the
Republican Party leadership by backing Santorum’s underdog
campaign.
The clock is ticking, and we are today two weeks away from the
FEC report that will disclose just how bad the Gingrich campaign’s
financial plight became in March. Whatever bargaining power Newt
has will almost certainly expire once that April 20 report becomes
public. Romney could decide he can finish off Santorum without
Gingrich’s help, and leave Newt to pay off his own campaign debts.
We are therefore likely to learn pretty soon whether the man who
called himself a “grassroots populist” in Florida is now willing to
make a deal with the “Establishment” and its “money power.”
