Rick Perry’s Financial Implosion

With the candidate’s campaign too broke to pay its staff, Perry is banking on support from super PACs to keep his presidential hopes alive.

Republican presidential candidate Rick Perry fields a question during the 5 p.m. presidential debate hosted by FOX News and Facebook in Cleveland,  Ohio on August 6, 2015.
National Journal
Aug. 11, 2015, 2:44 a.m.

Barely 60 days after declaring that he’d run for president, Rick Perry faces a financial crisis that threatens to short-circuit his comeback candidacy months before the election begins.

The longest-serving governor in Texas history is so cash poor that his presidential campaign has stopped paying its own advisers. National Journal first reported Monday that Perry had frozen pay for South Carolina staff, and CBS and The Washington Post soon reported the freeze applied all across the nation — including in Iowa, New Hampshire, and his Austin headquarters.

“There’s no way to spin this that’s positive,” said Matt Mackowiak, a Texas Republican strategist.

(RELATED: Big GOP Donors Still Believe in Chris Christie)

The shockingly early financial implosion (four years ago, Perry hadn’t even announced his 2012 candidacy yet) is a potentially crippling blow for a candidate who, despite energetically campaigning in Iowa and elsewhere on the political circuit, has found little traction in the polls.

“We’ll be able to live off the land for a while,” predicted Katon Dawson, Perry’s South Carolina state director.

But while his official campaign has been reduced to a volunteer operation, a trio of independent pro-Perry super PACs remain well-heeled, making it less likely Perry will be forced to exit the race entirely.

“Oh God, yes, full steam ahead,” said Austin Barbour, a senior adviser to Perry’s super PACs. “Because we raised $16.8 million.”

The remarkable imbalance between the cash-strapped campaign and the flush super PAC will likely test the limits, already being pushed by other underfunded candidates, of how much responsibility can be pushed off onto unlimited-money outside groups.

“We raised as much money as possible so that we would have the ability to spend it in whatever way we needed to spend it,” Barbour said, “whether it was traditional super PAC ways on paid media or whatever other ways we need.”

(RELATED: Here’s Who’s Winning the 2016 Money Race)

It’s not clear if or when another round of actual Perry campaign paychecks will be issued. And Perry’s super PACs can’t simply rehire his official strategists and staff. “They have a 120-day moratorium,” noted Barbour of Federal Election Commission regulations. Some Perry aides were already eyeing the job market elsewhere on Monday, multiple Republican sources said.

Perry’s campaign reported an anemic $1.1 million fundraising haul through the end of June, and the campaign ended the quarter with $883,913 cash on hand. For perspective, that’s about one-tenth of what Ben Carson, a political neophyte who has never held political office, raised via his campaign during that time.

Meanwhile, Perry was burning through what little cash he had raised — spending almost $593,000 in little more than five weeks in May and June. Nearly two-thirds of the money Perry spent ($391,000) went to Abstract Communications LLC, a business registered in Austin to Jeff Miller, Perry’s campaign manager.

“As the campaign moves along, tough decisions have to be made in respect to both monetary and time-related resources,” Miller said in an email Monday evening.

With a crowded 17-candidate GOP field, Jeb Bush dominating among big donors, and Donald Trump dominating the news, there has been little space for longer-shot candidacies. Perry’s financial falter could be only the first of many, as other Republicans could soon face a cash crunch of their own: Bobby Jindal, Rick Santorum, Mike Huckabee, and George Pataki all had less than $1 million banked at the end of June, the same or less than Perry had.

Fundraising was never supposed to be the chief question about Perry, especially after he raised more than $20 million for his 2012 race. He has been laying the groundwork for a 2016 campaign almost since the moment he quit four years ago: studying up, meeting with foreign policy advisers, and honing policy positions. He even began wearing much-commented-upon new glasses. “The last 20 months,” Perry told National Journal last year, “have been spent in a fairly intensive prep mode on all the big issues that face the commander in chief of this country.”

(RELATED: Where 2016 Candidates Raised Their Money)

But Perry has struggled to redefine himself following that disastrous 2012 campaign, which saw him finish in fifth in Iowa. The race was punctuated by Perry’s painful debate lapse when he forgot the name of a government agency he would eliminate. “Oops,” he said on stage.

In 2016, Perry has so far has been defined by the debate stage he missed. He finished 11th in the Fox News’ polling average last week, when only the top 10 were allowed into the prime-time debate. Instead, Perry had to compete in a 5 p.m. show derided as the “B-list” or “kiddie-table” debate before an empty arena in Cleveland. And even then, political newcomer Carly Fiorina eclipsed him.

Perry had tried desperately to make it onto the main stage. In Iowa, his super PAC spent more than $1 million on radio and TV ads hoping that boosting his poll numbers there might ricochet into news coverage nationally. No dice: The numbers didn’t budge, even as the only competition on the airwaves came from Jindal, who also missed the polling cut for the prime-time debate.

On the stump, Perry tried to take on the controversial Trump, lashing out at him as “barking carnival act” and a “cancer on conservatism.” That, too, failed to garner much attention.

Last Thursday, Trump stood center stage as a record 24 million Americans tuned in. Perry was one of them, watching with fellow polling bottom-dwellers Santorum and Pataki, over beers and wine.

Presidential campaign history is littered with candidates who, after financial woes, retreated to focus on a single state, most notably John McCain in 2008, who went on to win the GOP nomination after winning in New Hampshire. For Perry, most believe that state must be Iowa.

“Bottom line is to make sure we get him in place to win Iowa,” Barbour said of their strategy, “or at least get a top-three finish in Iowa.”

Mackowiak, the Texas GOP strategist unaffiliated with Perry’s campaign, said, “Perry ought to move to Iowa, pull a Santorum, and do the 99-county tour.”

“That is not a fun way to run president,” he added. “It is hard. It is unpleasant.”

The problem for Perry is that that appeared to be his strategy already. He has held more events in Iowa than anyone other than Santorum (Perry conducted 74 events over 38 days, according to The Des Moines Register), and still garnered little renown.

Miller, the campaign manager, said that, Perry “remains committed to competing in the early states and will continue to have a strong presence in Iowa, New Hampshire, and South Carolina.”

An unpaid Dawson said, he expected to pick up Perry at the airport in South Carolina on Thursday.

“We’re on a mission right now,” Dawson said, “and we’re going to worry about the finances later.”

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