Dean Campaign's Fortune Largely Spent

WASHINGTON – John Kerry's (search) front-runner status is helping his fund raising take off while former Democratic leader Howard Dean's (search) once-record treasury has dwindled to around $5 million, campaign officials said Thursday.

One source directly familiar with Dean's finances, who spoke only on condition of anonymity, said Dean had that much on hand after all bills were paid. A second source, a senior Dean campaign official, confirmed that Dean's cash on hand had fallen to seven figures after raising a Democratic record $41 million last year.

Contributions slowed dramatically in the hours after Dean replaced campaign manager Joe Trippi (search) on Wednesday, but Dean supporters were heartened by a fund-raising pickup on Thursday. His Web site showed he was raising money at a clip of about $10,000 per hour, with more than $1 million in online donations since last Saturday.

When asked whether there would be layoffs as Dean looks to cut costs, a senior official said Dean was serious when he said the campaign would be leaner. The official said that rather than wholesale staff cuts, the campaign would reduce or shift staff as it makes decisions about which primary states to compete in.

Dean is already withholding staff salaries and decided against airing ads in any of the seven states holding delegate contests next Tuesday.

Dean's belt-tightening came as Kerry raised more than $500,000 over the Internet in the two days since his New Hampshire victory Tuesday night and their cash-strapped rivals for the Democratic nomination were awaiting their next checks from public financing.

Kerry's best day of Internet fund raising before his Iowa victory last week brought in just $50,000 to $60,000, spokesman Michael Meehan said. In all, he has raised more than $1.6 million online since the Iowa caucuses Jan. 19.

Kerry's flood of online donations comes a little more than a month after he announced he had mortgaged his family's Boston home to secure a $6 million loan to keep his campaign afloat. He hasn't decided whether he will lend his campaign more money, Meehan said Thursday.

"Senator Kerry will make decisions about how he funds and executes his campaign on a daily basis," Meehan said, declining to say how much the campaign raised in all this month. The Massachusetts senator plans to resume holding fund-raising receptions sometime in February.

Kerry and Dean are the only two Democrats skipping public financing. Dean raised a Democratic record $41 million last year, nearly double Kerry's total.

Dean campaign chairman Steve Grossman said the former Vermont governor needs a win within the next two weeks to keep even his most devoted online small-dollar donors giving.

"They'll keep coming in as long as we deliver, and I think Howard knows himself that he's got to deliver in these next couple of weeks" for the campaign to remain competitive financially, Grossman said.

By opting out of public financing, Dean and Kerry freed themselves of the program's $45 million primary spending limit, but they also won't get monthly government campaign checks.

Those checks won't prove a very lucrative financial lifeline for participating candidates, however, even as they try to make their cash stretch through a monthlong crunch of more than a dozen primaries.

The departures of Dean, Kerry and President Bush from the taxpayer-financed program left it flush enough to give participants their full monthly payment when the first checks went out in early January. But with only a month to replenish itself from tax returns, the program now has only enough cash to give them roughly 43 cents to 45 cents of each dollar they're entitled to when their second checks go out Monday.

Before word of the shortfall, Ohio Rep. Dennis Kucinich had been expecting $2.4 million in his February check; Wesley Clark, $1.4 million; Joe Lieberman, about $389,000; and John Edwards, about $302,000.

Candidates will have to take out loans if they want to make up the difference until taxpayers replenish the program enough for it to pay them their full shares.

Under the program, the government matches the first $250 of each private donation, up to about $18.7 million per candidate. Taxpayers fund the program by checking a box on their income-tax returns to direct $3 to it at no cost to themselves.

The system, created after the Watergate scandal to try to reduce big-donor influence, has faced a money crunch for years. Only about one in nine taxpayers marks the box.