McCain Ends Year With Debt

John McCain, who ended the year with a $4.5 million debt, plans six coast-to-coast fundraisers in three days to capitalize on his Florida victory and front-runner status and build on the $7 million he raised in the first three weeks of January.

McCain's end-of-year financial reports, filed late Tuesday with the Federal Election Commission, showed he raised $6.7 million during the last three months of 2007 and had $3 million cash in hand, not counting end-of-year debt.

He also got a significant boost from a $3 million line of credit from Fidelity Bank & Trust, a loan he secured in November as he prepared to mount a campaign-salvaging stand in New Hampshire.

The loan carried an 8.5 percent interest rate and was secured to a great degree by McCain's proven ability as a fundraiser. If he loses the nomination, McCain could transfer the debt to this Senate campaign committee and continue to raise money to retire it.

"We think we understand fairly well what kind of asset valuation potential a campaign might have, particularly with the significant history the senator has of being able to raise funds," said Barry C. Watkins, Fidelity's president and CEO. "Certainly his ability to continue to raise funds is an issue."

McCain is a senior member of the Senate Commerce Committee and the top Republican on the Armed Services Committee, two perches that give him a significant money-raising advantage.

"Suppose he loses," said Charles Tiefer, a professor at the University of Baltimore School of law and former deputy general counsel of the House of Representatives. "Won't his debt get paid off by well-heeled regulated interests looking for favors from the Senate Commerce Committee?"

To be sure, office holders seeking re-election or running for higher office often have a fundraising advantage because of their legislative positions. And officials with government watchdog groups said the bank, by securing the loan with McCain's potential fundraising, did not appear to be giving McCain an edge.

"It's not an unfair or biased advantage," said Meredith McGehee, policy director at the nonpartisan Campaign Legal Center.

McCain spent nearly $9.5 million during the quarter, with $4.3 million devoted to advertising.

The totals, now a month old, bear little semblance to the current state of the campaign.

McCain, whose finances slumped last summer, has been rebuilding his treasury with every primary victory this month. He won in New Hampshire, South Carolina and Florida. He now heads into the sweeping, delegate-rich Feb. 5 primaries and caucuses with a strong wind at his back, but still facing a rival in Mitt Romney, who has dipped into his vast personal wealth to compete in the race.

The campaign plans fundraisers in San Francisco and Los Angeles on Thursday, St. Louis and Chicago on Friday and Nashville, Tenn., and Atlanta on Saturday.

His campaign would not say how much money McCain currently has in hand. McCain has qualified for public financing, but with his victories, his momentum and the scheduled fundraisers, it is unlikely that he will accept the money and the limitations on spending that come attached.

According to his year-end FEC filing, Merrill Lynch employees continued to be McCain's best sources of money. Employees of the financial management firm contributed $39,000 in the last three months of the year, bringing his annual total from Merrill Lynch employees to $140,000.

McCain listed nearly $765,000 in payroll expenses, indicating significant belt-tightening from the $2 million spent on payroll in the second quarter of 2007.