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How Race Slipped Away From Romney

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By SARA MURRAY And PATRICK O'CONNOR

BOSTON—Mitt Romney is one of the wealthiest men ever to run for president. Andyet the lack of money earlier this year stalled his campaign, and he never reallyrecovered.

The GOP nominee emerged late lastspring from a long and bruisingRepublican primary season moredamaged than commonly realized. Hisimage with voters had eroded as heendured heavy attacks fromRepublicans over his business record.He also felt compelled to take a hard lineon immigration—one that was thesubject of debate among his advisers—that hurt his standing with Hispanicvoters.

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Mitt Romney and his family appear Tuesday night after he conceded the election.

WSJ's John Bussey discusses how Mitt Romneylost the presidential election despite having largesupport from the business sector. (Photo: GettyImages)

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More than that, Mr. Romney had spentso much money winning the nominationthat he was low on cash; aides, seeingthe problem taking shape, had onceconsidered accepting federal financingfor the campaign rather than rely onprivate donations.

The campaign's fate led on Wednesdayto second-guessing and recriminationsamong Republicans chagrined that aseemingly winnable race slipped away.Some Republicans wondered whetherthe Romney campaign had misjudgedthe power of President Barack Obama'scoalition, while others were questioningMr. Romney's and the party's approachto immigration.

Back in spring, the Romney campaign'sbiggest worry was money. So thecampaign's finance chair, SpencerZwick, huddled with political directorRich Beeson to craft a complexschedule that took Mr. Romney to thecities that were prime real estate forfundraising.

It meant visits to places like California,Texas and New York—none of whichwere important political battlegrounds—while only allowing for quick side trips toswing states that Mr. Romney wouldneed to win to become president.

On one level the strategy worked: Mr.Romney ultimately garnered some $800million or more, putting him in closecompetition with Mr. Obama's robustfundraising effort.

But Mr. Romney paid a deep politicalprice. The fundraising marathon reducedhis ability to deliver his own message tovoters just as the Obama campaign wasstepping in to define the Republicancandidate on its terms. Mr. Romney'sheavy wooing of conservative donorslimited his ability to move his campaignpositions to the center, to appeal tomoderate and independent donors.

The search for cash led him to a Floridamansion for a private fundraiser whereMr. Romney would make the deeply

WSJ's Alan Murray, John Bussey and Jerry Seibreview Republican presidential candidate MittRomney's concession speech. Photo: AP.

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damaging, secretly recorded remarkswhere he disparaged and dismissed the47% of Americans who don't pay taxes.

In the end, Mr. Romney lost nearly everyswing state. Other factors contributed tohis defeat, of course, including difficultymaking voters warm to him and a dearthof support among Hispanics.

But in the eyes of top aides in bothcampaigns, that early summer periodwhen Mr. Romney was busy fundraising

was perhaps the biggest single reason he lost the election.

The Obama campaign spent heavilywhile Mr. Romney couldn't, launched arange of effective attacks on theRepublican nominee and drove upvoters' negative perceptions of Mr.Romney.

The problem: Mr. Romney had burnedthrough much of his money raised forthe primaries, and by law, he couldn'tbegin spending his general-electionfunds until he accepted the GOPnomination late in the summer.

The money crunch didn't totally take theRomney camp by surprise. Long beforeMr. Romney secured the nomination, hisclosest advisers began plotting what itwould cost to wage an effectivecampaign against Mr. Obama in thegeneral election. Mr. Zwick, his financechief, assumed the best way to handlecash needs would be to raise moneyfrom private donors, rather than acceptthe public financing the governmentoffers presidential candidates, adviserssaid.

Mr. Zwick looked at fundraising marketsin every state and sketched out aschedule for Mr. Romney, his wife Ann,and his yet-to-be-named running mate.He decided the payoff from fundraisingwas worth the investment of thecandidate's time. Analytical decisionslike that one were the campaign'smantra. In interviews, staffers called itthe "Bain way."

In August, when Wisconsin Rep. Paul

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Spencer Zwick, the Romney aide whoscrambled to raise enough money for thecampaign.

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Ryan was announced as Mr. Romney'svice presidential pick, Mr. Ryan'sfundraising schedule was released thesame day: 10 events by the end of themonth.

Mr. Romney's finance team was vigilantin its efforts to ensure fundraising jauntswould be worth his time. Every othermonth the campaign's state financechairmen met for a roughly four-hourmeeting with Romney staffers. Duringthe meeting, fundraisers had to stand infront of their peers and report whetherthey had hit their fundraising target.

If the local finance chairman fell short oftheir targets, the campaign sometimescanceled its fundraising stops there, afinance staffer said.

The real cost, though, was in the lostopportunity to use Mr. Romney to do other campaigning to introduce himself togeneral-election voters on his own terms. Aside from a five-day bus tour of six,mostly Midwestern states, Mr. Romney's highest profile summer campaign event wasa problem-plagued overseas trip one aide called "total chaos." Even in that trip'sschedule were nestled two fundraisers, one in London, another in Israel.

Meanwhile, the Obama campaign and a super PAC helping it, Priorities USA Action,had unveiled ads attacking the centerpiece of Mr. Romney's resume, his record asthe head of private-equity firm Bain Capital. The ads portrayed Mr. Romney as theheartless leader of a company that gobbled up companies and then slashed jobs.

The cash shortfall hindered the Romney campaign's response; to get through thesparse time, the campaign took out a $20 million loan.

Bob White, a former Bain executive who has long followed Mr. Romney, formed ateam to research Bain investments so the campaign was prepared with a rapidresponse whenever one was questioned. Mr. White sought out more than a dozenchief executives of companies that benefited from Bain Capital investments to offernarratives of prosperous investments to balance out the ones that had soured. Thecampaign posted more than a dozen of them on a website lauding Mr. Romney's"sterling business career." But they couldn't afford to air the testimonials in televisionads, an adviser said.

Meanwhile, Mr. Romney's two top strategists, Russ Schriefer and his partner StuartStevens, started to craft an ad strategy around their slim bank account. In focusgroups, swing voters kept asking: What would Mr. Romney would do if elected?

They prepared spots explaining what Mr. Romney would do in the opening days of hispresidency: approve construction of an oil pipeline to Canada, cut taxes and replaceMr. Obama's health-care law with "common-sense reforms." Yet the team didn't evenhave enough money to air their ad in the Washington, D.C., media market, thereforeignoring the sprawling suburbs of Northern Virginia—a key to a swing state that Mr.Romney badly needed to win.

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As Mr. Romney struggled, a group of flush Republican super PACs stepped in to lendthe presumed GOP nominee air cover. The biggest, American Crossroads and itsaffiliate Crossroads GPS, realized early that the Obama team would front-load itsadvertising to attack Mr. Romney when he couldn't return fire.

Former Mississippi Gov. Haley Barbour, a Crossroads adviser, referred to this phaseas "the interregnum," and he reminded the group and its donors that former PresidentBill Clinton used this phase to undercut then Sen. Bob Dole in 1996 before he becamethe Republican presidential nominee.

Between mid-April, when Mr. Romney effectively locked up the nomination, and theRepublican convention at the end of August, the Obama campaign outspent theRomney camp $173 million to $75 million, according to data compiled by theCampaign Media Analysis Group.

But thanks in large measure to super PACs, Republicans outspent the Obamacampaign and its Democratic allies over the same period by roughly $50 million,shelling out nearly $250 million compared with $198 million for Democrats, accordingto the same figures.

Still, the super PACs were better at attacking Mr. Obama than building up Mr.Romney, and the Republican's "likability" ratings with voters stayed low. With fewpublic appearances and little to spend on ads, the campaign couldn't gain anymomentum. An adviser described it as a campaign of "fits and starts."

Mr. Romney, meanwhile, kept making his conservative talking points to donors andnever moved to the political center. It was during those months that Mr. Romney wasfilmed at a fundraiser in Florida dismissing 47% of Americans as Obama supportersbecause they receive government benefits or don't pay taxes and wouldn't beamenable to Mr. Romney's message of small government and lower tax rates. "Myjob is not to worry about those people," Mr. Romney said in the video. "I'll neverconvince them they should take personal responsibility and care for their lives."

The campaign also never figured out how to get beyond a damaging policy positionfrom the primary season, a tough line on overhauling immigration laws. Mr. Romneyrefused to embrace legislation that might give some illegal immigrants long in the U.S.a path to citizenship, and instead advocated what he called "self-deportation."

Struggling to win the primary, the campaign's political team decided Mr. Romneyneeded to draw a contrast on the immigration issue to differentiate himself from theother Republicans on stage. The candidate's hard-line stance alienated Hispanicvoters, which would prove a critical failing in the fall general election.

By early September, the Romney campaign was slumping and trailing badly in thepolls. The first presidential debate offered what might be its last shot at a turnaround.

On a dreary Tuesday in early September, Mr. Romney and his top brass descendedon the remote Vermont estate of Kerry Healey, Mr. Romney's former Massachusettslieutenant governor, for debate preparations.

Beth Myers, a senior campaign adviser who was managing preparations, decided Mr.Romney had better dive into debate preparations—which the candidate disliked—head first. After just one mock session, senior Romney staffers were blown away—with Rob Portman, the Ohio senator picked to portray Mr. Obama.

Mr. Portman mastered Mr. Obama's policies and mannerisms so completely thatRomney aide Peter Flaherty referred to him as "Mr. President" even when they

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bumped into each other on the trail.

"It was game on," said Mr. Flaherty, who played each of the three debate moderators.

Mr. Romney, meanwhile, worked on compressing his responses into two-minutetidbits. Just days before the first debate, Messrs. Romney and Portman, dressed insuits, took the stage at the Back Bay Events Center in Boston for a final rehearsal.Aides there said Mr. Romney's answers were crisp, and he parried Mr. Portman'sattacks with ease. Afterward, Lanhee Chen, the campaign policy director, called hiswife and told her, "Mitt's ready."

Minutes into the first debate Romney advisers saw their candidate was poised andrelaxed with an easy grasp of the facts behind his answers. Obama advisers couldtell the president was off his game.

Throughout the debate, the Republican nominee highlighted his work with Democratsduring his four-year stint as Massachusetts governor, reassuring voters he plannedto reach across the aisle as president, too.

Romney advisers say he always intended to make that point, because it cut to theheart of voters' main complaint against Mr. Obama.

Ending partisan gridlock "was his biggest promise, and so therefore, it may be hisbiggest failure," Mr. Schriefer said.

The first debate reshuffled the race. Obama aides traded concerned emails abouthow to get their campaign back on track even before it concluded.

In the end, postdebate bumps in polls and money weren't enough to change his fate.On Tuesday, Mr. Romney managed to flip just two states Mr. Obama won in 2008,Indiana and North Carolina. (Florida remains too close to call.) Mr. Obama won theElectoral College contest easily.

By early evening Mr. Romney said he had only written one speech: A victory speechthat stood at 1,118 words, unedited. Late that night, he delivered a concessionspeech that came in at just 646 words.

"I so wish that I had been able to fulfill your hopes," Mr. Romney told a somber crowdin a not-quite-full ballroom at the Boston convention center. "But the nation choseanother leader."

The day after his loss, Mr. Romney stopped by headquarters to visit staffers andthank them for their efforts.

He didn't hint at what he would do next, only saying "I'm not going away," one staffersaid.

Write to Sara Murray at sara.murray@wsj.com

A version of this article appeared November 8, 2012, on page A1 in the U.S. edition of The Wall StreetJournal, with the headline: How Race Slipped Away From Romney.

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