In Politics, The Web Changes Everything

Hillary Clinton had everything lined up to reprise the mighty George W. Bush nomination campaign of 1998-99.

She would use the vast donor network inherited from her husband to raise a $100-million campaign fund. This vast treasury would deter potential rivals from entering the race. And should anybody in the party murmur against this buying of the nomination, she would field a team of party leaders to warn: "Those who are with us now will be remembered when we win. And those who are against--they will also be remembered when we win."

It worked for Bush. But it's not working for Clinton.

Back in 1998-99, fundraising was a complicated, costly business. Donors were legally limited to a maximum donation of US$1,000. It therefore took 1,000 donations to raise US$1-million; 100,000 to raise US$100-million.

Simply identifying potential donors was a big enough job. Motivating them to give after they were found was an even bigger one. How many minutes does it take to shake 100,000 hands?

While Bush was shaking hands, the geniuses out in Silicon Valley were devising secure electronic payment systems--too late to make much of a difference in 2000, but right on time for 2003-2004.

That year, Howard Dean offered Democrats an exciting message and a ferocious new style. They saw him on TV. They looked up his Web site. And then they clicked the "donate" button.

Till then, nobody had tried very hard to raise small donations for a presidential nomination battle: If raising US$1-million in US$1,000 increments was tough and expensive, just think how tough and expensive it would be to raise it in US$100 increments. How would those donors even know where to send the money? (Remember Democratic presidential candidate Jerry Brown incessantly rattling off his 1-800 number in 1992? He just looked silly. He won the Utah primary, but not much else.)

Dean proved that the right candidate does not have to find donors. All he needs is a strong message--and the donors find him.

In the last three months of 2003, Howard Dean raised US$40-million--an average of US$3-million per week, the fastest fundraising rate in American history, almost three times faster than George Bush's rate in 1998-2000. The median donation: less than US$100.

Dean flamed out soon after. The strength of his message could not quite overcome his deficiencies as a candidate. But he left behind a new route to a presidential nomination--a route that Barack Obama is treading.

The presidential candidates have just reported their first-quarter 2007 donations, as required by law. Hillary Clinton raised US$26-million from 50,000 donors. That's an average donation of a little over US$500. About what you would expect. The majority of Hillary's donors gave the current legal limit of US$2,300--meaning that they cannot give her any more until she has secured the Democratic nomination.

Obama raised almost exactly as much as Hillary: US$25-million. But he raised his money from 100,000 donors. Half of his donations arrived over the Internet, and those gifts averaged just US$138.

Those givers can give and give again.

The Internet can break candidates as well as make them.

Nine months ago, many Republicans regarded Mitt Romney as their party's most promising candidate for 2008. A successful businessman, he nearly upset Senator Ted Kennedy in 1994. He won the governorship of liberal Massachusetts in 2002, and delivered a universal health care program without raising taxes. Not bad.

In his Massachusetts career, Romney had presented himself as an economic conservative but social liberal: pro-choice on abortion, pro-gay rights. In recent years, however, he moved to the right.

In 2004, the Massaschusetts Supreme Judicial Council discovered a right of same-sex marriage in the Massachusetts Constitution. (The constitution had been adopted in 1780, so the right must have been well-hidden to avoid detection for 224 years.) Romney opposed gay marriage fiercely.

That year, he also stepped forward as a vocal critic of medical research that destroyed human embryos. He spoke more forcefully about his long-standing personal opposition to abortion. And he began to find a respectful audience on the social right of the national Republican party.

2004 seems like yesterday doesn't it? And yet in one respect, it was a completely different world: There was no YouTube. Twelve months later, there was. Suddenly, any 12 year old with a video camera could produce a campaign commercial and post it on a "channel" viewed by millions of people.

Edited clips contrasting Romney's old and new positions could now be seen by hundreds of thousands of people. They devastated his rising Republican support. Romney now stands at 3% among Republican primary voters, fifth behind Rudy Giuliani, John McCain and two undeclared candidates, Fred Thompson and Newt Gingrich. Romney raised more money in the first quarter of 2007 than any other Republican. But what good has it done him? The Internet changes everything.