WASHINGTON (CNN) -- Sen. John McCain is not throwing in the towel, even though the Arizona Republican has to rebuild a presidential campaign beset by financial woes, staff resignations and questions about viability.
Sen. John McCain had disappointing campaign fundraising during the second quarter.
This time last year it was different; his trusted campaign operative John Weaver was putting the final building blocks in place for a national campaign.
But earlier this week Weaver and campaign manager Terry Nelson resigned after McCain appeared to lose confidence in their ability to lead the campaign that had only $2 million in the bank after raising more than $20 million in the first six months of the year.
Several senior staffers followed Weaver and Nelson out the door. A few more are expected to resign by Monday, the same day the McCain campaign will report that it is about $1.75 million in debt.
Despite this week's problems, including his Florida co-chair being arrested after being accused of soliciting sex from an undercover police officer, McCain has pledged publicly and privately to continue his bid for the GOP nomination.
"It was, basically, 'We're going to win. I am going to be president and here's why,' " a senior McCain adviser said the senator told remaining staffers Thursday.
The adviser added, "Politically, McCain is more comfortable and better suited to an underdog campaign." McCain is now looking at a slimmed-down approach, a contrast from the operation he built that merged his inner circle with former Bush political operatives.
In an appearance in New Hampshire on Friday, McCain declared that his presidential bid was still headed to victory.
"We've always had relatively small staff, and we've never been able to compete on money," he said. "We'll win the same way we almost won in 2000." Watch Sen. McCain express confidence he can win »
In addition to assuring supporters his campaign has stabilized, McCain must also convince Republican donors to continue to contribute to a campaign criticized for mismanaging more than $20 million.
Asked on Friday about possible misspending by campaign staffers, in light of his years railing against misspending by Congress, McCain said, "When I see mistakes, I correct them."
McCain also acknowledged his stances on some of the most controversial issues of the past few months, such as immigration and Iraq, have dogged his campaign.
"My position on immigration was obviously not helpful with the Republican base," he said. McCain was among a bipartisan group of senators that worked out compromise legislation aimed at overhauling U.S. immigration laws. The bill was ultimately defeated in Congress partly because many conservatives rallied against it, arguing it offered "amnesty" to illegal immigrants.
Also, McCain said, "I think my position on the war in Iraq has obviously at least not been helpful with independents." McCain has openly supported President Bush's buildup of troops in Iraq.
Rick Davis, a longtime McCain political adviser, has taken over as campaign manager.
"This campaign has always been about John McCain and his vision for reducing federal spending, defending traditional values and winning the war against Islamic extremists," Davis said in a statement released following the resignations of Weaver and Nelson. "Today we are moving forward with John's optimistic vision for our country's future."
Nelson and Weaver had been criticized for poorly managing the campaign's financial resources, and both acknowledged that they miscalculated by thinking he would raise $100 million in 2007. But in the first six months of this year McCain has raised a little more than $24 million.
It was not a surprise when Nelson and Weaver told reporters last week the campaign would undergo a major restructuring that included the layoffs and a new focus primarily on the early voting states of Iowa, New Hampshire, Nevada and South Carolina.
It had been widely speculated that Nelson might eventually leave the campaign, but not Weaver -- a longtime aide and confidante to the Arizona senator.
Earlier this week, Sen. Lindsey Graham, a close McCain ally, said that the campaign's infrastructure needed to be changed.
"Shaking up John's campaign is probably something that's smart, because we spent too much money with too little to show for it," said Graham, a South Carolina Republican. "And if you don't adjust in the politics of war, you can pay the price."
But why Weaver, who has spent the past seven years preparing McCain for another presidential bid? When McCain returned from Iraq, he met with Nelson and Weaver to look at fundraising numbers and staff reorganization.
A campaign adviser, who spoke on the condition of anonymity, said they could "not satisfy" McCain "that they had a good plan," and the Arizona senator was also angry about the amount of money the campaign was burning through. After conversations with McCain, both Nelson and Weaver walked away feeling they had lost the senator's confidence and their "Plan B approach wasn't satisfactory to him."
An official in the McCain campaign, who also spoke on the condition of anonymity, said the senator had decided Davis would take a bigger role in the campaign, which Nelson and Weaver opposed. So McCain told his aides "do what you want" but Davis is back in a lead role. Davis had been privately advocating a much different strategy for McCain. Nelson and Weaver resigned.
Another source involved in the McCain campaign's internal deliberations said the senator's wife, Cindy, and Sen. Trent Lott, R-Mississippi, both pushed for change after seeing the disappointing fundraising numbers.
"Cindy is the main catalyst for change," said the source, who added that Lott "has John's ear and says he has to find a way to shake things up and get a fresh look."
Perhaps even more shocking to Washington insiders is Mark Salter's decision to take a reduced, voluntary role in the campaign. Salter is McCain's longtime chief of staff whom Salon.com once described as "The Voice of Sen. John McCain." Salter co-wrote several books for McCain including: "Faith of My Fathers: A Family Memoir."
Salter will retain his title as senior adviser to McCain, assisting with communications strategy and speech writing, but it will be in an unpaid capacity and no longer have day-to-day responsibilities.
While Davis, who was part of McCain's 2000 bid for the White House, will take over as campaign manager, a search is now under way to promote someone who is "politically savvy" enough to take on the details that were once handled by Nelson, said a campaign source.
"I think what you've got is people's strengths are coming out," said Graham. "John Weaver is a great tactician. Mark Salter is one of the best wordsmiths I've ever met. Rick Davis' skills are in the management area. It's getting the right people with the right skill base. There's nothing wrong with the people. I don't think they had the right skill sets."
The plan is now to continue to focus on Iowa, New Hampshire and South Carolina. And Mike Dennehy, McCain's former national political director, returns to the fold with an expanded portfolio, as does Carla Eudy, his former finance director. Dennehy will remain based in New Hampshire -- the state McCain won in 2000.
"For those of us who went through 2000, we know the most important thing is to put John McCain in front of voters," Dennehy said in an interview Friday morning.
Stuart Rothenberg, a well-respected nonpartisan political analyst, said that McCain now has a difficult task of resuscitating his campaign.
"I think clearly McCain has fallen out of the top tier of the Republican race and it is unclear how long the campaign can survive," said Rothenberg, editor of the Rothenberg Political Report.
"I think it is very unclear whether they are going to have the resources to continue in all of the early states or rather hunker down in New Hampshire or Iowa and take a stand. This is a campaign that needs to turn around public psychology sometime over the next few months or they are not going to be able to raise any money and will be kicked to the curb by most people." E-mail to a friend
CNN's Mark Preston, Candy Crowley, Ted Barrett, Dana Bash, Sasha Johnson, Ed Henry, John King and Mark Preston contributed to this report.
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