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In a first, Dean says he'll reject US funds

BURLINGTON, Vt. -- Howard Dean became the first Democratic presidential candidate ever to opt out of the federal public funding system yesterday, and cast the move as a preemptive strike against the fund-raising prowess of President Bush.

With his decision, Dean, who has outraised the other Democratic contenders to date, dealt a significant blow to the Watergate-era legislative changes that established the funding system.

Dean, seeking to fend off criticism for breaking with a program that he expressed support for as recently as last spring, said the move was intended to help repair a broken political funding system. He said he would recoup the forgone federal matching funds with millions of small donations.

"Instead of getting $2,000 checks from the heads of all the major corporations in the country, we asked 2 million Americans to give us $100," Dean told supporters gathered at the University of Vermont. "And we believe that the 2 million Americans will borrow $100 simply for the pleasure of sending this president back to Crawford, Texas."

Dean's decision to depart from the federal campaign funding, made after 85 percent of 105,000 polled supporters gave their blessing in an online survey, set the stage for other Democrats to follow suit.

Yesterday, Senator John F. Kerry said in an interview that he would decide "in the next hours and days" whether to join Dean in opting out of the public financing system, indicating that he would make a quick announcement rather than bash Dean at length on the issue.

"I'm not going to make a war out of it, just a judgment," said Kerry, who lags behind Dean in the crucial battleground of New Hampshire. "He's the decider on this issue, not me," adding that he has pledged for months to follow spending caps if his Democratic rivals did, but also not to put his candidacy at risk if Dean abandoned the system.

Meanwhile, retired Army general Wesley K. Clark, who has entertained the idea of breaking with the public system, seemed to move away from such a departure. "Our view is that it doesn't have significant implications for the primary," said Matt Bennett, a Clark spokesman. "To be sure, it is a luxury that any campaign would want to have. I don't think this campaign believes that it's going to be a decisive advantage."

Bush has announced his plans to forgo federal matching funds, as he did last election, when he raised $100 million.

Opting out of federal financing means that both Bush and Dean are able to spend freely through the nomination process, released from the $45 million spending cap that accompanies acceptance of $18.6 million in matching funds. Both candidates remain eligible for $74.4 million in federal matching funds for the general election.

Dean has raised $25 million, including a Democratic record of $14.8 million in the quarter ending in September. Bush aims to raise $170 million and faces no primary challenger.

Dean, who had filed preliminary paperwork with the Federal Election Commission to accept matching funds, took pains yesterday to differentiate his move from Bush's, saying the decision to opt out was done in furtherance of campaign finance reform.

But campaign officials refused to commit to a request by Senator Russell Feingold, a Wisconsin Democrat and an architect of last year's new campaign finance act, and public interest groups, that Dean abide by the federal spending cap during the primary because -- the argument goes -- spending more than $45 million could harm both Dean and fellow Democrats.

"We are only at $25 million," said Dean's campaign manager, Joe Trippi. "We are a long way away from $45 million. We don't believe we'll have to exceed it."

Some political observers said Dean's move could sound the death knell for the public campaign financing system, which was created after Watergate to reduce the reliance of presidential candidates on big donors. Few changes have since been made to the progam, which critics say has left it underfunded.

Many Democrats, including Dean, have come to view acceptance of public financing as a formula for defeat, with a candidate who takes public money in the primaries faced with the possibility of being outspent by Bush by 4 to 1 or more between now and September, when Bush is formally nominated. That would allow Bush to flood the airwaves with campaign ads at a time the Democratic nominee would be strapped for cash.

In ballots sent to supporters last week, Dean sought to emphasize that point, writing in an e-mail that accompanied on-line ballots: "Most likely we will spend the $45 million primary funds by March and we will then be vulnerable to the $200 million collected by George Bush. Your campaign will not be able to spend any more election money until the convention at the end of July."

Kerry, who could tap into assets he shares with his wealthy wife if he departs the federal financing system, sought to pin blame on Dean. "I'm disappointed that the campaign finance system on the Democratic side is now going to be coming apart," he said.

Senator John Edwards of North Carolina said that he was "very disappointed that Governor Dean has reversed himself and decided to abandon this important piece of our election system. I intend to stay within the system." With Dean's decision to opt out, Trippi said the relinquishment of federal funds would not mean a change of course from collecting small donations, but instead would mean seeking more -- as in, say, $100 donations from 2 million people.

He noted that of the 233,000 contributions the campaign has received to date, only 1,747 -- or 1 percent of donors -- have given $2,000, which under campaign finance rules would bar them from giving more money to Dean. As such, he said, some donors could be tapped again for funds.

He also noted that in the course of two days of on the opt-out of the federal financing system, supporters had pledged an additional $5.3 million.

For Dean, the announcement capped a roller-coaster week of high-fives and stumbles. The former governor of Vermont received a major boost with the endorsement of the Service Employees International Union and indications that an endorsement would follow this week from the American Federation of State, County, and Municipal Employees -- two diverse and powerful groups. But he also endured days of criticism for saying he wanted to be the "candidate for guys with Confederate flags in their pickup trucks," a remark that he later acknowledged caused pain, and for which he apologized.

Patrick Healy and Joanna Weiss of the Globe staff contributed to this report.

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