Clinton campaign on the skids as aide is forced to apologise

Calls for chief strategist to be sacked after he was found lobbying for controversial free-trade agreement

The wheels may be about to come off Hillary Clinton's campaign for the presidential nomination following a series of damaging news reports less than three weeks before a potentially decisive primary contest with Barack Obama in Pennsylvania.

Mrs Clinton's chief strategist, Mark Penn, has been forced to apologise after he was discovered lobbying for a free-trade agreement her campaign opposes. The proposed Colombia trade agreement is bitterly opposed by trade unions and human rights groups, and there are growing calls on Mrs Clinton to axe him.

Mr Penn has kept his $3m (£1.5m) a year job as head of the British-owned lobbying firm Burson-Marsteller while guiding Mrs Clinton's campaign. The man who helped Bill Clinton get into the White House has produced some of Mrs Clinton's most effective ads, including the recent "3am in the morning" ad, which stressed her round-the-clock capacity for handling crises.

Mr Penn described his lobbying meeting with Colombia's ambassador as "an error of judgment".

Mrs Clinton's appeal among working-class voters has taken a further knock from revelations that she and her husband earned a combined $109m over the past eight years. This puts them in the top one-hundredth of 1 per cent of all US taxpayers.

Around half the Clintons' wealth came from former president Bill Clinton's speaking engagements on behalf of companies that have lavished money on Mrs Clinton's campaign – leading to questions over conflict of interest.

These revelations are playing into the hands of Mr Obama, who is running on a promise to bring an end to the more corrosive aspects of Washington's lobbying industry. His campaign refuses to accept money from lobbyists and is funded by contributors who have given small "lay-away" payments, typically of $10 and $20 each.

After initially being seen as a golden opportunity for Mrs Clinton, Pennsylvania is turning into her greatest challenge. Most of the local Democratic establishment is backing her, including Governor Ed Rendell, Philadelphia's mayor, Michael Nutter, and Congressman John Murtha. But the state's senator, Bob Casey, said he was supporting Mr Obama.

Instead of cruising to victory, Mrs Clinton has come under attack for "mis-speaking" about landing in Bosnia under sniper fire in 1996. While Mr Obama eloquently disposed of the problems caused by his controversial pastor, Reverend Jeremiah Wright, by turning it into a debate about race, Mrs Clinton merely reminded people of the lies of the Clinton White House years.

Mr Obama, who was far behind Mrs Clinton in Pennsylvania, has pulled slightly ahead in one poll, and reduced her 20-point lead in January to 16 last month and 5.4 with less than three weeks to go.

His campaign is raising vastly more money – $40m in March alone, amid signs that the Clinton campaign has raised just half that. That has enabled Mr Obama to open 30 offices across the state and, last week alone, he spent $2.2m on ads while the Clinton campaign spent a quarter of that amount.

The weeks on the road have given Mr Obama the opportunity to engage in the face-to-face style of politics which have served him so well. He has put his tanks on Mrs Clinton's lawn at every opportunity, hiring a bus to take him around Scranton, the birth and burial place of his opponent's domineering father, Hugh Rodham.

He has also been to Lancaster County, where the state's most conservative Republican voters live, hoping to persuade them to register as Democrats and vote for him. The efforts seem to be paying off as figures show a record four million have registered for the party, including 240,000 new voters.

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