Presidential hopefuls may soon get a new line on cash

By Michael Kranish, Globe Staff, May 29, 1999

WASHINGTON -- Here's the scenario: A presidential candidate with relatively little money stuns everyone by winning the New Hampshire primary. Conventional wisdom says the victory would be fleeting because the winner would have little time to raise money during the compressed primary schedule.

But what if, click, click, the under-financed candidate with the moment's momentum goes on the Internet and collects enough contributions on line in a few days to become viable? If on-line companies such as can collect millions of dollars overnight in sales, can a presidential candidate tap the same market?

The odds of this happening may be about to increase dramatically. The Federal Election Commission is on the verge of allowing on-line credit card contributions to be eligible for matching federal funds, changing the current rules that allow only contributions by check to be matched. Once the FEC gives final approval, the first $250 contributed on line by each donor would be matched equally with federal funds, making the Internet far more attractive to campaigns.

"The potential is enormous," said Elaine Kamarck, co-editor of a just-published book about Internet campaigning called ""

Last year, only 11 percent of the candidates running for Congress or governor accepted on-line contributions, said Kamarck, a Harvard University faculty member and an adviser to the campaign of Vice President Al Gore.

"By 2000, it will be amazing to me if 100 percent don't do it," she said. "This is a godsend for political campaigns."

Gore, who has taken considerable flak for having claimed to help invent the Internet, does not yet accept on-line contributions. Instead, the Gore Web site,, provides only a form that people can print out and send with a check. Still, Gore collected $20,000 with the limited service during the first quarter this year. Kamarck said the Gore campaign is waiting for the FEC final ruling on matching funds before accepting credit card contributions on line.

Meanwhile, Gore's opponent, former senator Bill Bradley of New Jersey -- who does collect on-line contributions at -- had taken in $100,000 through his Web site as of last week.

"It could be a very big factor," said Bradley spokesman Eric Hauser. "You have the prospect of having very quick donations, which could be quite advantageous in the compressed primary schedule. It is really something that hasn't been done before."

Every presidential candidate has a Web page, and most campaigns are using e-mail to organize activists, especially younger voters. There is even talk of using the Internet for voting, with Louisiana Republicans studying the possibility for caucuses.

Before allowing on-line contributions, the FEC has had to deal with concerns over credit card fraud, and finding ways to ensure that the identity of donors can be established.

It is not yet clear whether current donors will use the Internet as an alternative payment method, or whether an untapped group of people will start contributing that way. The answer might come in the climactic phase of the primary season when regular contributors have "maxed out" at the $1,000 limit, leaving campaigns to seek new donors.

The major benefit of collecting on-line contributions is that donors can type in their credit card number and push the "send" button, automatically transferring funds to the candidate. That is far faster than the traditional method of mailing a check and waiting for it to clear the bank -- a process that can take up to two weeks.

Those 14 days can be a lifetime in politics during the presidential primary season.

In past years, an upstart candidate such as Jimmy Carter in 1976 had time after the New Hampshire primary to go around the country and raise money for the next phase. But by 1992, when the late Senator Paul Tsongas won the New Hampshire primary, he did not have as much time to raise enough money to capitalize on his success.

In the 2000 campaign, about half of the delegates will be selected in the month after the first-in-the-nation primary in New Hampshire. A candidate without a huge war chest will have little chance to capitalize on a strong showing in the Granite State using the traditional means of raising funds.

That is why candidates such as Bradley, Republican Senator John McCain of Arizona, and Republican Patrick J. Buchanan have all signaled they will rely heavily on Internet contributions.

The model for Internet campaigning is Minnesota Governor Jesse Ventura, according to several specialists in the field. The former wrestler and Reform Party candidate raised $80,000 on line last year out of the $300,000 he collected overall. Until the final weeks before the election, the Ventura campaign had no headquarters, but instead was run with two computers at the home of campaign "webmaster" Phil Madsen.

"There's no question in my mind that without the Internet, we would not have gotten the additional 3 percent we needed to put us over the top," Madsen said, referring to Ventura's 37 percent to 34 percent margin of victory. "Without the Internet, we would have lost."

In the seven months since that election, Madsen said, the acceptance of using credit cards on line has grown. Madsen, who founded Minnesota's Reform Party in 1992, said he believes a third-party presidential candidate could spring up late in the 2000 campaign and ride the Internet to victory.

"It happened with Ventura," Madsen said. "Now the technology exists to create not only an uprising, but an instant organization as well. The only thing that is missing is the candidate."