Obama raised $21.9 million in May

By Peter Kaplan

WASHINGTON (Reuters) - Barack Obama raised $21.9 million in May, his campaign reported on Friday, a day after the Democratic candidate said he would reject public financing for his presidential bid.

The Illinois senator's campaign said it had $43.1 million in the bank at the end of the month, with debts of about $304,000.

The disclosure followed Obama's reversal on the question of whether he would take public financing, which drew sharp criticism from his Republican opponent, John McCain.

McCain's campaign said on Friday he raised almost as much in May -- $21.5 million. He spent $11.6 million and ended the month owing $1.27 million, with $31.5 million in the bank, up $10 million from the end of April. During the primary season, his campaign raised $96 million.

New York Sen. Hillary Clinton, who suspended her campaign for the Democratic nomination and endorsed Obama two weeks ago, raised about $16.3 million and spent $19.2 million in May, according to a report filed with the Federal Election Commission. Her campaign owed about $22.5 million at the end of the month.

Obama's fundraising figure for May is less than the $30.7 million he raised in April. At the end of that month, he had $46.6 million in the bank, with debts of $2 million.

His campaign has racked up record-breaking fundraising numbers in a presidential run that will be the most expensive in U.S. history.

It raised about $36 million in January, $55 million in February and more than $42 million in March.

Obama is the first U.S. presidential candidate to bypass the public financing system since it was created after the Watergate scandal in the mid-1970s.

He built a formidable grass-roots financial machine during his primary battle against Sen. Hillary Clinton of New York, raising more than $265 million from more than 1.5 million donors, many of whom gave in small increments.

Obama defended his decision to reject public funds at a news conference in Jacksonville, Florida, saying campaign finance system has a large loophole because of outside groups known as 527s that have no limits on the amount of money they raise.

He said such groups have "enormous influence" and were set to launch attacks against him.

"I don't think I'm off the wall here to see that a lot of outside groups that are potentially going to be going after us hard," Obama said.

Criticism of his decision to opt out of the public finance system was not just limited to McCain and the Republicans.

The New York Times said in an editorial on Friday that the decision was at odds with Obama's vow of pursuing a new kind of politics and would set a "dangerous precedent" for future campaigns.

(Editing by Chris Wilson and Eric Walsh)