Christie's new cash problem: Why raising money won't be as easy as he thought

Suddenly, fundraising for a 2016 campaign will be no cake walk for the governor -- thanks to these roadblocks

Published January 27, 2015 12:00PM (EST)

  (Reuters/Carlo Allegri)
(Reuters/Carlo Allegri)

Chris Christie and his supporters launched a political action committee on Friday to raise money for a likely run for president.

The PAC, called “Leadership Matters for America,” will allow the New Jersey governor to solicit gifts from donors as he tries to catch up to Jeb Bush and Mitt Romney, who have been making moves for weeks already. Bush set up a PAC of his own last month.

At first glance, Christie should have no trouble bringing in the tens of millions of dollars he’ll need to mount a credible campaign. He raised more than $100 million last year as chairman of the Republican Governors Association — tens of millions more than his Democratic counterpart. In his reelection campaign in 2013, he out-raised his opponent by a margin of more than 4-to-1.

Even so, the New Jersey governor’s rainmaker status is in doubt. A pair of threats could combine to torpedo his chances at raising the piles of money every serious candidate needs. A federal rule prevents many Wall Street bankers from giving to Christie as long as he remains governor. On top of that, Christie is facing stiff competition from Bush and Romney, moderate Republicans who are looking to the same set of big-money donors that Christie will rely on.

It all means that Christie has to move fast and lock down the donors he cultivated last year when he traveled the country raising money for the Republican Governors Association. The new PAC is a step in that direction.

“He had better make the donors he met on his gubernatorial trips produce,” Larry Sabato, director of the University of Virginia’s Center for Politics, said last week. “Because if they start flaking off — mainly to Bush, but secondarily to Romney — he’s really out of the race, whether he wants to admit it or not. He has to have big money.”

And if he can secure those supporters, he may be less reliant on the set of Wall Street donors who are subject to the Security and Exchange Commission’s pay-to-play rule for financial advisers.

The rule has long been a thorn in the side of Christie’s presidential ambitions. In 2012, Romney’s campaign reportedly passed over Christie for running mate partly because of fear about the rule’s effects, according to the book “Collision 2012” by Dan Balz.

The restriction, which the SEC announced in 2010 and enforced for the first time last year, affects many bankers at firms that work with governments as “investment advisers” — handling money for state pensions, for example. If those bankers donate to a politician, like Christie, who has the power to influence the government’s selection of an investment adviser, then the banker’s firm has to take a two-year “time-out,” meaning it must stop doing compensable investment advising for that government.

The penalties for violating the rule can be severe — in the tens of millions of dollars, said Jason Abel, a lawyer with the firm Steptoe and Johnson who specializes in campaign finance.

But it isn’t quite clear which donors and what kinds of donations fall under the rule. Experts disagree over whether donations to groups beyond a candidate’s actual campaign — things like super PACs, independent expenditure groups, or Christie’s “Leadership Matters for America” — are covered.

That confusion could scare away even more money than the SEC intended.

“It really is an issue that I don’t think is completely settled,” said Abel, who added that it’s hard to say how the rule will affect Christie’s campaign. “Do I think it will have an impact on donors? Without a doubt. But does that then add up to a discernible negative impact on the campaign? I can’t speak to that.”

Ken Langone, the billionaire co-founder of Home Depot and one of Christie’s biggest supporters, insists the rule won’t stop Christie.

The rule “will be no impediment to Chris having everything he needs to run a successful campaign,” Langone told Politico late last year. An assistant said last week that Langone was traveling and unavailable for comment.

Sabato agrees that the restriction isn’t the end of the world for Christie.

“Never underestimate the creative ability of lawyers and accountants to find a way around the rules. And there will be a way around it,” Sabato said.

But the SEC is only one part of Christie’s problem. He’s also facing unexpectedly fierce competition from Bush and Romney, two moderate Republicans who threaten to corner the market on exactly the set of donors Christie is trying to attract.

Bush announced in mid-December — a full 13 months before the Iowa caucuses — that he would “actively explore the possibility of running for president of the United States.” Weeks later, in early January, Romney essentially launched a campaign of his own, telling a group of donors in New York, “I want to be president.”

The speed of those entrances has upended politicians’ timelines and made it even more important for Christie to secure his donor network quickly.

“It’s really forcing the donors to get off the fence,” Sabato said. “They also have to make a decision now. They had hoped to push this off into the future, giving excuses to candidates, ‘well, it’s early.’ No, it’s not early anymore.”

Christie responded on Friday with the creation of the new PAC.

But even before he had the PAC for supporters to give to, Christie was meeting with potential donors. On Jan. 14, he attended a meet-and-greet with prominent Republicans in South Carolina, an early and influential primary state. The gathering was hosted by Leighton Lord, a Charleston lawyer and college friend of Christie’s.

“There were big fundraisers, there were evangelicals, there were activists” at the 100-person, two-hour event, Lord said.

Most Republican bigwigs in South Carolina remain uncommitted, Lord said, but he is confident Christie will do well there.

“I have never seen so many people wanting to take pictures with a presidential candidate,” he said. “Everybody wanted to meet him. And we’ve had lots of presidential candidates come through — Mitt Romney came through the last time, Newt Gingrich was there, [Tim] Pawlenty was there. Lots of people have been in that same space, and … I had never seen the across-the-board excitement and reaction to an office holder that Christie garnered.”

By Michael Linhorst

Michael Linhorst covered New Jersey politics for the Bergen Record.

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2016 Campaign Chris Christie Fundraising Gop Jeb Bush Mitt Romney New Jersey Presidential Campaign Sec The Right