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
Shane Goldmacher
Add to Briefcase
See more stories about...
Shane Goldmacher
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.”

What We're Following See More »
Senate Intel Postpones Testimony by Cohen
16 hours ago
Senate Rejects Effort to Nix SALT Tax Changes
1 days ago

"Senate Democrats on Thursday failed in their first attempt to save the state and local tax deduction, which helps many residents of California and other high-cost states reduce their federal income tax bills. The Republican-controlled Senate voted 52-47 to reject an amendment that would have prevented the Senate from considering any bill that repeals or limits the deduction as part of a planned tax overhaul."

Lewandowski Meets with Senate Intelligence Committee
1 days ago

"President Donald Trump's former campaign manager Corey Lewandowski appeared on Capitol Hill for a closed-door interview with the Senate intelligence committee Wednesday, according to a source familiar with the matter. Lewandowski is the latest senior official in Trump's orbit who has met with the committee as part of its investigation into Russian election meddling and possible collusion with the Trump campaign."

Some Members Seek to Wrap Up Russia Investigations by Year’s End
2 days ago

"A growing number of key Republicans are sending this message to the leaders of the congressional committees investigating potential Trump campaign collusion with the Russians: Wrap it up soon. In the House and Senate, several Republicans who sit on key committees are starting to grumble that the investigations have spanned the better part of the past nine months, contending that the Democratic push to extend the investigation well into next year could amount to a fishing expedition."

Trump: Marino Withdrawing Nomination for Drug Czar
3 days ago

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.