CORRECTED-UPDATE 2-Obama, allies score financial win over Romney in August
(Corrects cash on hand in paragraph 11 to $6.3 million from $7.4 million)
* Restore Our Future spent $21 million in August
* Obama relies less on the national party
* Republicans still lead in overall cash on hand
WASHINGTON, Sept 21 (Reuters) - U.S. Democratic President Barack Obama and his allies scored a financial victory in August over Republican challenger Mitt Romney and his backers, as Romney's team hit snags in the money race, financial disclosures showed Thursday.
Monthly reports filed with the Federal Election Commission indicate that Obama's strategy of collecting relatively small donations from donors could offset Republicans' efforts to boost Romney through big-money donations by wealthy supporters to independent groups.
And in a rare show of strength, the key pro-Obama "Super PAC" - a political action committee that operates outside the president's campaign - raised more money last month than its rival pro-Romney group, according to the filings with the FEC.
The FEC reports portray massive spending by both sides in August, as the campaigns approached their party's nominating conventions and sought to establish themes for the fall campaign.
Obama's campaign was particularly active, raising $84.2 million and spending $83.2 million last month as it continued to emphasize Obama's efforts to improve the economy and cast Romney as a wealthy former private equity executive who is out of touch with the concerns of most Americans.
The president's campaign ended the month with $88.8 million, compared with $50.4 million for Romney's campaign.
Romney could be helped by the Republican National Committee, which at the end of August had $76.7 million on hand, compared with just $7.1 million for the Democratic National Committee. But some of the RNC money could go toward congressional candidates, and there are various limits on how Romney can use RNC funds.
With the Nov. 6 election looming, the candidates' ability to sustain large grassroots operations and have flexibility for rapid response through TV advertising may prove crucial in the tight race.
Since April, Romney has relied on outside backers for more than half of his ads, an academic study found last week - far more than Obama, whose campaign has been spending at a rapid clip on advertising and its vast get-out-the-vote network of campaign staff and volunteers.
But in August, Romney's key outside "Super PAC" - Restore Our Future - plowed through $21.2 million as its fundraising declined for the second month, according to FEC disclosures.
That left the group with just $6.3 million in cash on hand, raising questions about how much of an ad-buying force it will be in the home stretch.
Bringing in $7 million in August, Restore Our Future - whose attack ads on Romney's foes were key to his clinching the Republican nomination - lagged the pro-Obama Priorities USA Action, which has long struggled to attract Democratic donors who generally disdain rules that allow Super PACs to raise and spend unlimited funds.
Priorities USA had its best fundraising month in August, bringing in $10.1 million and ending the month with $4.8 million in the bank.
Restore Our Future, which declined to comment, kicked up its spending in August to try to counter Obama's well-funded campaign, whose ads dominated the airwaves in many parts of the country last month.
Romney himself raised $66.1 million in August, according to FEC filings. But the campaign spent $61.2 million and could not dip into a large chunk of its cash because a provision in U.S. campaign law walled it off until after his official nomination at the Republican convention in Tampa in late August.
In fact, because of the law, Romney wound up stretched for cash at the end of August and had to take out a $20 million loan to make it to the general election period.
Election finance analysts say that money raised for the presidential campaigns - as opposed to money raised for the parties - is more "flexible" cash because it can be used for spur-of-the-moment investments to, for example, instantly rebut the opponent's latest attack.
Parties do provide key support when it comes to mobilizing voters and grass-roots outreach, but this year they have a $21.7 million cap on how much they can coordinate with the campaigns. That limits their capacity for advertising, a crucial way to reach voters.
In total fundraising, the president and the DNC remained ahead of Romney and the Republicans, having raised about $742 million this campaign season, compared with roughly $630 million raised by Republicans, according to news releases and FEC disclosures.
ON ROMNEY'S SIDE
Romney stands to benefit from other independent groups that can raise and spend unlimited amounts. One is American Crossroads, a Super PAC and nonprofit co-founded by former George W. Bush aide, Karl Rove.
In August, the group raised $9.4 million and had $32 million left in cash on hand, FEC filings showed.
Romney also benefits from two tax-exempt advocacy groups that are not required to disclose their fundraising reports or donors: American Crossroads' sister group Crossroads GPS and Americans for Prosperity, funded by billionaire brothers Charles and David Koch.
Even so, the August totals - along with the independent Republican groups turning their focus to races for the U.S. Senate and House - could reflect some of the discontent that many conservatives feel toward Romney's campaign, which trails Obama's nationwide and in several of the politically divided "swing" states that will decide the election.
The academic Wesleyan Media Project last week found that 54 percent of pro-Romney or anti-Obama ads run between late April and early September came from independent groups.
Democratic groups, generally unable to match Republican groups' fundraising prowess this year, funded just 9 percent of ads benefiting Obama during that time. (Additional reporting by Patrick Temple-West; Editing by David Lindsey, Lisa Shumaker and Vicki Allen)
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