Obama keeps Dean at DNC

WASHINGTON (AP) - June 5, 2008 Howard Dean will remain as chairman of the Democratic National Committee, an affirmation by Obama of Dean's bottoms-up rebuilding of the party across all 50 states. Still, Obama is installing one of his top strategists, Paul Tewes, to help expand the DNC staff and oversee party operations.

The move puts Obama's ample fundraising machine at the party's disposal. In so doing, Obama imposed on the DNC the same ban on money from federal lobbyists and political action committees that he has placed on his campaign.

The DNC has trailed its GOP counterpart in fundraising. Over the past 17 months, the Republican National Committee has raised $166 million to the Democratic National Committee's $82.3 million. The DNC also has spent heavily, leaving little cash on hand while the Republican National Committee has built its reserves.

At the end of May, the RNC had nearly $54 million in the bank to the DNC's $4 million.

That Republican advantage is overshadowed by Obama's sizable edge over presumed Republican nominee John McCain. At the end of May, McCain had raised $115 million and had $31.5 million in the bank. Obama has not announced his May totals, but at the end of April had raised $264 million and had $46.5 million in the bank.

Still, McCain reported his best fundraising month in May, raising $21.5 million.

By not sidelining Dean, Obama ended up taking sides in a long-running dispute between Washington-based Democratic Party leaders and state party officials. Although Obama campaign officials have expressed concern in the past that the party did not have enough money, Obama shares Dean's goal of building the party from the ground up, even in states where Republicans dominate.

Dean has spent party resources creating a comprehensive national voter file and placing an average of four staffers in each of the 50 states. The strategy was a hit with state party officials but encountered skepticism in Washington, where some congressional leaders angrily pressed for the party to spend money on winnable contests.

In a statement, Obama spokesman Bill Burton said: "Senator Obama appreciates the hard work that Chairman Dean has done to grow our party at the grass-roots level and looks forward to working with him as the chairman of the Democratic Party as we go forward."

Dean welcomed Tewes to the DNC, saying he would help the party transition to the general election.

"Over the last three years, the DNC staff has worked tirelessly to ensure that the Democratic Party is strong in all 50 states and that we communicate our values to Americans across the country," Dean said in a statement. "The DNC and the Obama campaign are now working together to continue this effort."

Meanwhile, Hillary Rodham Clinton encouraged her fundraising team on Thursday to move behind Obama and the DNC. And Dean himself had dinner with Clinton fundraisers Wednesday in Boston.

"He clearly made the case to this group of people that he needed them very badly," said Steve Grossman, a former DNC chairman and Clinton fundraiser. "Howard's willingness to lay out strategy was sign of respect for people working tirelessly for Hillary. It couldn't happen unless team Clinton is intimately involved in the funding."

In a call to her finance team members, Clinton voiced a "desire to work as hard as she could on behalf of Senator Obama and the Democratic Party to make sure we have a Democrat elected in the fall and that she would do whatever she could," her national finance co-chairman, Hassan Nemazee, said. "She said she would work with Senator Obama in ensuring that her finance people were integrated as efficiently and as effectively as they can be."

By banning federal lobbyist and PAC money from the DNC, Obama sought to avoid an inconsistency with his own campaign's fundraising policy. The ban applies to future fundraising, meaning the party won't have to return money it has already raised from lobbyists and PACs.

"Today as the Democratic nominee for president, I am announcing that going forward, the Democratic National Committee will uphold the same standard - we will not take a dime from Washington lobbyists," Obama said at a town-hall meeting in Bristol, Va.

Obama is pressing his case that McCain is under the influence of special interests because of his advisers' lobbying ties.

McCain's senior advisers are former lobbyists, including campaign manager Rick Davis. McCain was stung last month by the disclosure that two advisers - now gone - had worked for a firm that had represented the military junta in Myanmar, also known as Burma.

The Arizona senator instituted a new lobbying policy that says no campaign staffer can be a registered lobbyist, resulting in three more departures from his campaign, including a top fundraiser, former Texas Rep. Tom Loeffler. Neither McCain or the RNC ban lobbyists' money.

Obama's ban on lobbyists money is not ironclad. He does accept money from lobbyists who do not do business with the federal government and he also accepts money from spouses and family members of lobbyists. He has had unpaid advisers with federal lobbying clients, and some campaign officials also previously had lobbying jobs.

The new fundraising policy is not expected to hurt the party's fundraising ability because lobbyists and PACs do not constitute a major source of money.

According to its latest report with the Federal Election Commission, the DNC had raised $2 million from PACs in the past 16 months. And according to the nonpartisan Center for Responsive Politics, the DNC raised a mere $53,360 from executives or associates in lobbying firms so far this election cycle. That total, however, includes employees of lobbying firms who are not registered lobbyists.

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Associated Press writer Beth Fouhy contributed to this report.