Besides Biden, Phillips’ greatest challenge is raising campaign money

Washington — U.S. Rep. Dean Phillips announced last week that he had to lay off a large number of his campaign staff, a brutal reckoning that running for the White House costs a lot of money.

Phillips, who said he will continue his challenge to President Joe Biden, raised more than $1 million from supporters in the first couple of months of his presidential run. But that fundraising pace won’t raise enough to cover the costs of a nationwide campaign.

The last report the “Dean 24” campaign filed with the Federal Election Committee shows that Phillips also loaned his campaign $4 million.

Phillips continues to raise campaign cash, but may be hamstrung by his pledge not to accept political action committee (PAC)  money or donations from lobbyists.

“I found it almost impossible to raise enough to do this campaign the way I want,” Phillips said in a post on X last week. “And today, sadly, I had to announce layoffs to a lot of my staff members.”  

Phillips also canceled his plan to campaign in Michigan this weekend. The state holds its Democratic presidential primary on Feb. 27. 

While Phillips shuns PAC donations to his campaign, there is a  PAC that is helping his run for the White House. Called We Deserve Better, it has raised about $1.6 million in the last quarter of the year and attracted pledges of support from billionaire hedge fund owner Bill Ackman and other wealthy donors.

The year-end filings with the FEC showed that We Deserve Better has already received $500,000 from cryptocurrency entrepreneur Jeb McCaleb and that venture capitalist heir Neal Khosla donated $1 million.

The PAC also received $100,000 from hedge fund manager Irvin Robert Kessler. The PAC itself was established by a pair of Silicon Valley entrepreneurs, Matt Krisiloff and Jed Somers.

Why are these wealthy entrepreneurs backing a long-shot candidate?

Ross Baker, a political science professor at Rutgers University, said “these people are risk takers.

“They believe that ‘nothing ventured, nothing gained,’” Baker said. “It doesn’t hurt their bottom lines, and it makes them look like players.”

John C. Fortier, a senior fellow at the American Enterprise Institute, said the explosion of super PACs, which, unlike a candidate’s campaign account, have no limits on the size of donations, have helped presidential candidates stay afloat.

“Fifteen years ago, the winnowing of presidential campaigns for lack of money was more severe because they relied on limited contributions to their campaigns,” Fortier said. “Today, a super PAC with a few large donors can help a campaign stay afloat.”

Still, there is no evidence that these entrepreneurs can provide Phillips with the kind of money he needs to continue on the campaign trail. And Phillips began his campaign late, has little name recognition and no support from national or state Democratic parties.

Biden, meanwhile, had raised $97 million for his reelection at the end of the year and has the support of the Democratic National Committee and  Democratic super PACs.

Despite his money troubles, Phillips vowed to continue his challenge to Biden.

“I’m not giving up, I’m gonna continue. I’m on the ballot in 43 states. Our country is desperate for change,” Phillips said in his posting on X. “If you still believe that we can do better, please consider supporting my campaign.” 

A bare-bones level

Phillips has even been trounced in fundraising in his home state.

As of Dec. 31, Phillips raised $203,134 in Minnesota. But Biden raised more than $1 million in the state.

Still, that means that one out of every five dollars Phillips raised in that two-month period came from Minnesota.

Baker, of Rutgers, said that a successful presidential campaign and its supporting PACs must together raise about $1 billion to pay for all needed expenses.

“Phillips is a wealthy man in his own right, but I don’t know if his personal wealth will enable him to raise that big a chunk of money,” Baker said.

Phillips,  a successful businessman and heir to the Phillips Distilling Company, is reportedly worth more than $75 million.

The Phillips campaign did not respond when asked if the candidate would continue to pour money into his campaign.

So, it’s difficult to know how long Dean 24 will have enough money to continue on the campaign trail — and there’s speculation he may quit soon.

“Advertising is necessary to do well, but if the campaign wants to hang around at a bare-bones level without much advertising, his expenses would be lower,” Fortier said.

Fortier said there’s no simple formula to determine how much money Phillips would need to continue his quest for the White House.

But he pointed to former Ohio Gov. John Kasich’s bid for the presidency in 2016.

Before he ended his campaign in May, Kasich, a Republican, raised about $20 million in his campaign and another $30 million in independent expenditures.

“I suspect Phillips could get by with less than Kasich did in 2016, and with possible continued self-funding and potentially more super PAC funding, it is conceivable his campaign could last a while, especially if it was light on advertising,” Fortier said. “That is not exactly a recipe for victory, but he might be able to pay staff and keep the lights on.”

Phillips continues to say Biden, 81, is too old to defeat former President Donald Trump and that he’s a better candidate to enter the fray.

But he voiced sympathy for Biden when Special Counsel Robert Hur issued a final report of his investigation of classified documents that were stored in the president’s Delaware home. That report contained detailed descriptions of Biden’s forgetfulness and said the president came across as “a well-meaning, elderly man with a poor memory.”

Phillips called Biden “a decent man” and said it was a “sad day” when the president was forced to defend himself against Hur’s report.

That infuriated Sen. John Fetterman, D-Pa.

“Actually, what’s sad is to have some guy with way too much money, and he wants to piss it away and somehow help Trump at this point. So, he has the right to do that, but he’s just been humiliated again and again and again,” Fetterman said on CNN.

Fetterman also called Phillips an “irrelevant” candidate with a “third-rate kind of campaign.”

Editor’s Note: Ana Radelat wrote this story for MinnPost.com. This story was originally published in MinnPost on Feb. 19.

Radelat is MinnPost’s Washington, D.C., correspondent. 

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.