Even as it bragged about beating President Obama in fundraising over the summer, Mitt Romney’s presidential campaign was so low on cash that it ended up engineering an unusual $20 million loan to meet expenses until the former Massachusetts governor was formally named as the Republican nominee in late August, officials disclosed Tuesday.
The loan from the Bank of Georgetown, first reported Tuesday night by National Review Online and confirmed by a senior campaign official, provides a telling glimpse into previously unknown money troubles within the Romney camp over the summer. Romney has relied heavily on wealthy donors but has had persistent difficulty raising money among grassroots donors, who could have helped buoy his finances during the long summer before the Republican convention in Tampa.
The campaign has paid back $9 million of the loan so far, with $11 million remaining on the debt side of the ledger, the senior campaign official said. Federal Election Commission reports to be filed Thursday will show a debt of $15 million, which was the amount outstanding on Aug. 31, according to the campaign. Romney, who loaned more than $40 million of his fortune to his 2008 bid, has not given his 2012 campaign any loans, officials said.
News of the debt comes at an inopportune time for a campaign struggling to right itself after a series of self-inflicted wounds, including controversial criticism of Obama’s handling of attacks on U.S. diplomats overseas and a damaging videotape of Romney describing 47 percent of the country as victims who are dependent on government. The problems have overshadowed a tightening of the race in some recent polls, and have prompted widespread hand-wringing in GOP circles over Romney’s chances.
Candidates for the White House and other major offices commonly borrow money to get through tough times, but the Romney campaign had not previously disclosed that it was among that group. In 2008, Sen. John McCain (R-Ariz.) borrowed money during the primary season and paid it back with a portion of public matching funds that he accepted in exchange for limiting his fundraising.
Neither Obama nor Romney is participating in public financing this year, however, which apparently left the Romney campaign in a pickle: They were running dangerously low on primary funds, but were not allowed to tap a cache of general election money that it began accumulating in late spring. The campaign came up with a variation on the approach used by McCain: Getting a bank to agree to loan $20 million with unused general election funds as collateral, according to the NRO account.