Romney not getting his $45m back

Says he won't seek gifts to repay campaign loans

Some analysts said Senator John McCain, shown with Mitt Romney in Denver in March, might undermine his reform message if he picks Romney, someone who bankrolled so much of his own campaign in the primary. (Mary Altaffer/associated press/file)

WASHINGTON - Mitt Romney, whose prospects of becoming John McCain's running mate appear on the rise, is preparing to formally declare he will not seek donations to repay $45 million in personal loans he made to his failed presidential bid - the biggest ever made by a candidate in a primary campaign.

The move could clear away the last remnants of a divisive primary race, ensuring that he and his financial supporters are focused on helping McCain, but it could also put him at odds with McCain's campaign reform message.

Romney spokesman Eric Fehrnstrom said yesterday that the former Massachusetts governor is preparing to have the loans "reclassified as contributions" and will write a letter to the Federal Election Commission explaining that he is "forgiving the outstanding loans."

Some analysts said McCain, the presumptive Republican presidential nominee, might undermine his reform message if he picks someone who bankrolled so much of his own campaign.

"Democrats would use it as an issue," political analyst Stuart Rothenberg said yesterday. "They would then try to undermine his reputation as 'Mr. Reformer.' "

He said it might also undercut McCain's effort to criticize Democratic rival Barack Obama for switching his position and rejecting public financing for the general election.

Still, Romney's investment in his own campaign and the donor network he built may have helped his vice presidential stock go up. The $45 million helped win widespread name recognition for Romney, who also raised more than $65 million from donors. Since McCain clinched the nomination in March, Romney has asked his supporters to contribute to a Republican National Committee fund that will be used to help McCain's candidacy and he has urged his campaign finance team to work for McCain.

If Romney became the vice presidential nominee, the rules appear to allow him to give or loan unlimited funds to McCain if the ticket rejects public funds, according to Michael J. Malbin, executive director of the nonpartisan Campaign Finance Institute. McCain, however, has said he will take public funds for the general election, a decision expected to translate into a major financial disadvantage for the Republican ticket.

With his unprecedented online fund-raising from small-dollar donors, Obama had brought in more than $287 million by the end of May, compared with nearly $120 million for McCain.

Like McCain, Obama is trying to get the help of the major fund-raisers for a chief rival, Hillary Clinton. She loaned her campaign more than $12 million, and is seeking help from Obama's donors, but said in a recent e-mail to supporters that she would like their help in paying debts she owes to vendors and would not use their donations to repay her own loans.

Romney declined a request yesterday from the Globe to talk about his campaign loans.

During the primaries, he and McCain had unkind words for each other as they skirmished over illegal immigration, the economy, and other issues.

They had some of their most bitter arguments over McCain's landmark campaign finance reform legislation. Romney said the 2002 law "hurt my party, it hurts First Amendment rights. I think it was a bad bill."

McCain responded that the legislation is at the core of his candidacy, and after Obama last month rejected public financing for the fall campaign, he is highlighting the measure in a just- released TV ad that touts him as a "maverick" who "tackled campaign reform."

The 2002 law that McCain cosponsored with Senator Russ Feingold, a Wisconsin Democrat, eliminated unlimited donations to political parties, tried to lessen the advantage of wealthy candidates financing their own congressional campaigns, but did not restrict how much money a presidential candidate could loan or contribute to his or her own campaign.

Romney's ability to finance so much of his primary campaign was the source of much frustration to the McCain campaign, which nearly ran out of funds last fall before the Arizona senator managed to stage his comeback after a victory in the New Hampshire primary.

McCain angrily complained that Romney was spending his fortune on attack ads against him.

Romney, a former venture capitalist worth between $190 million and $250 million, initially said he did not intend to loan money to his presidential campaign, declaring it "akin to a nightmare." Then, as he began giving himself millions of dollars, his campaign said "a loan's a loan," not a gift.

Finally, his campaign said in May that Romney was not likely to seek new donations to reimburse himself. However, the latest Romney campaign filing on June 20 continued to classify the money as a loan.

Fehrnstrom said he did not know when the letter to the FEC would be sent, but it is expected to be submitted before the Republican National Convention in early September, when the primary campaign is considered officially over.

The buzz in political circles is growing that Romney will take the stage in St. Paul as McCain's running mate because he has been among McCain's most vocal supporters - and Obama's most persistent critics.

Romney has heightened his visibility in recent days on behalf of McCain's campaign, doing television and radio interviews in which he touts McCain's candidacy and leaves open the possibility that he would accept a vice presidential nomination.

Romney's stock has risen partly because of the perception that he might help McCain on economic issues, which polls indicate have become a top voter priority as conditions worsen. Asked on MSNBC yesterday about the importance having a vice president with economic expertise, Romney said the presidential candidate's policies are more important. "McCain is right on the economic issues of the day, and that's why he will win," Romney said.

While Romney fended off any speculation about the vice presidential sweepstakes in appearances on both CNN and MSNBC yesterday and McCain has declined to say who is on his short list, McCain has taken notice of Romney's salesmanship.

"I'm appreciative every time I see Mitt on television on my behalf," the Arizona senator told a New Mexico audience on Monday. "He does a better job for me than he did for himself, as a matter of fact."

Michael Kranish can be reached at kranish@globe.com.