In debt, Clinton may need aid from Obama

An unwelcome legacy of Sen. Hillary Rodham Clinton's faltering campaign for president is a $21 million debt, half from her own pockets, that some political insiders think she may have to turn to her political nemesis to help resolve.

"The ultimate winner often helps the penultimate winner repay debt," said Chris Lehane, a former Clinton White House aide, who is not part of Clinton's campaign. "I'm not aware of anyone having those conversations. But historically, candidates have helped others deal with their debt."

Her opponent, Sen. Barack Obama, said in Oregon recently that he intends to have "a broad-ranging discussion with Senator Clinton about how I could make her feel good about the process and have her on the team."

He also has said he doubts Clinton is remaining in the race because of any financial incentive.

But Obama is the unquestioned fundraising leader of the 2008 campaign, having raised more than $240 million, and ended March with $51 million in the bank. He cannot transfer money to Clinton, but he could request that his contributors donate to her to help her pay her debts. Some Obama donors said they would consider helping his rival.

"As much as I dislike how Hillary Clinton has run this campaign, I think it would be worth it to heal the wound," said Los Angeles Democratic activist Richard Jacobs, an Obama backer.

A major Obama fundraiser, who was not authorized to speak and requested anonymity, said, "First she has to drop out."

Obama and Clinton aides said there has been no talk of a deal.

"She expects to be the nominee, and so it is premature and inappropriate to even discuss it," Clinton strategist Howard Wolfson said.

Still, there is precedent for winners to help losers. Clinton's donors helped former Iowa Gov. Tom Vilsack pay off his presidential debt. Sen. John McCain's backers helped Sen. Sam Brownback, R-Kan., pay his debt, though the debts was in the tens of thousands, not tens of millions.

Clinton has two types of debt: personal and what she owes to vendors. Her debt to vendors stood at $10.3 million at the end of March, including $4.5 million to the firm cofounded by Mark Penn, formerly her top strategist. She borrowed $11.4 million from herself.

Anticipating she would be the nominee, Clinton amassed $22 million for the general election. That money cannot be used directly for her primary debt. But she could ask donors to redirect those contributions to some other campaign, say, an account for 2012 when she would face re-election to the U.S. Senate.

At the same time, Clinton could transfer the debt to her vendors to that Senate account, and use money formerly for the presidential run to pay them.

Former Federal Election Commission Chairman Robert Lenhardt said that while Clinton could engage in such a two-step to pay off her debt, he would recommend a more straightforward path: keep her presidential account open and raise money into it from her perch in the Senate.

"She will be in the Senate for a long time, and could raise money and pay down the debt," Lenhardt said.

A major Clinton fundraiser, speaking anonymously, raised another possibility. Clinton could return checks to her general-election donors and ask that they write new checks to Obama. Such a gesture would make it easier for Obama to ask his donors to help Clinton.

Clinton's debt would be less of problem if Obama were to pick Clinton as his running mate. Although few pundits think he would choose Clinton, she would not arrive to the ticket empty-handed. She could use the $22 million in general-election money to help fund an Obama-Clinton ticket in the fall campaign, election-law experts said.