New York Times
Big-Dollar Donors Are Major Force in Obama Campaign
By MICHAEL LUO and CHRISTOPHER DREW
Published: August 5, 2008
In an effort to cast himself as independent of the influence of money on politics, Senator Barack Obama often highlights the campaign contributions of $200 or less that have amounted to fully half of the $340 million he has collected so far.
But records show that one-third of his record-breaking haul has come from donations of $1,000 or more: a total of $112 million, more than Senator John McCain, Mr. Obama’s Republican rival, or Senator Hillary Rodham Clinton, his opponent in the Democratic primaries, raised in contributions of that size.
Behind those larger donations is a phalanx of more than 500 Obama “bundlers,” fund-raisers who have each collected contributions totaling $50,000 or more. Many of the bundlers come from industries with critical interests in Washington. Nearly three dozen of the bundlers have raised more than $500,000 each, including more than a half-dozen who have passed the $1 million mark and one or two who have exceeded $2 million, according to interviews with fund-raisers.
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While his campaign has cited its volume of small donations as a rationale for his decision to opt out of public financing for the general election, Mr. Obama has worked to build a network of big-dollar supporters from the time he began contemplating a run for the United States Senate. He tapped into well-connected people in Chicago prior to the 2004 Senate race, and once elected, set out across the country starting to cultivate some of his party’s most influential money collectors.
He courted them with the savvy of a veteran politician, through phone calls, meals and one-on-one meetings; he wrote thank-you cards and remembered birthdays; he sent them autographed copies of his book and doted on their children.
The fruits of his efforts have put Mr. Obama’s major donors on a pace that almost rivals the $147 million raised by President Bush’s network of Pioneers and Rangers in contributions of $1,000 or larger during the 2004 primary season.
Given his decision not to accept public financing, Mr. Obama is counting on his bundlers to help him raise $300 million for his general-election campaign and another $180 million for the Democratic National Committee.
An analysis of campaign finance records shows that about two-thirds of his bundlers are concentrated in four major industries: law, securities and investments, real estate and entertainment. Lawyers make up the largest group, numbering roughly 130, with many of them working for firms that also have lobbying arms. At least 100 Obama bundlers are top executives or brokers from investment businesses: nearly two dozen work for financial titans like Lehman Brothers, Goldman Sachs or Citigroup. About 40 others come from the real estate industry.
The biggest fund-raisers include people like Julius Genachowski, a former senior official at the Federal Communications Commission and a technology executive who is new to political fund-raising; Robert Wolf, president and chief operating officer of UBS Investment Bank; James A. Torrey, a New York hedge-fund investor; and Charles H. Rivkin, chief executive of an animation studio in Los Angeles.
“It’s fairly clear that this is being packaged as an extraordinary new kind of fund-raising, and the Internet is a new and powerful part of it,” said Michael J. Malbin, executive director of the Campaign Finance Institute. “But it’s also clear that many of the old donors are still there and important.”
The care and feeding that top Obama fund-raisers have received underscores their significance to his campaign. Members of his National Finance Committee who fulfill their commitment to raise at least $250,000 are being rewarded with trips to the Democratic National Convention in Denver.
Finance committee members participate in conference calls with top campaign officials every other week. The fund-raisers meet quarterly, often with Mr. Obama dropping in. He lingered after the most recent meeting in June in Chicago, telling his staff he wanted to thank every person in the room. Some fund-raisers who knocked on doors for Mr. Obama in places like Indiana, Iowa and Pennsylvania got to spend time with Mr. Obama backstage before and after speeches on primary nights.
His fund-raisers invariably say their support for him is not rooted in any kind of promise of access, but rather their belief in him.
“This is about Barack Obama and changing the direction of our country,” said Jonathan B. Perdue, a business consultant in Mill Valley, Calif., who has raised more than $250,000 for Mr. Obama’s campaign.
Mr. Obama has pledged not to accept donations from lobbyists or political action committees registered with the federal government. But some top donors clearly have policy and political agendas. Hedge-fund executives, for example, have bundled large sums for Mr. Obama at a time when their industry has been looking to increase its clout in Washington.
Kenneth C. Griffin, chief executive officer of Citadel Investment Group in Chicago, has collected more than $50,000 for Mr. Obama. But Mr. Griffin, whose $1.5 billion in income in 2007 made him one of the country’s highest-paid hedge-fund executives, has given generously over the years to Republicans as well, and he recently helped to hold a fund-raiser for Mr. McCain. Citadel has spent more than $1.1 million, dating back to 2007, in lobbying against higher tax rates for hedge-fund gains. (Mr. Obama has supported the higher tax rates.)
Similarly, Paul Tudor Jones, a billionaire hedge-fund manager from Connecticut, has raised more than $100,000 for Mr. Obama. But he also gave to Mr. McCain, to Rudolph W. Giuliani and to Mitt Romney. Mr. Jones, who has given more than $900,000 over the last decade to federal candidates and political organizations, helped form a trade association that has fought hedge-fund regulation.
Many fund-raisers sit on the campaign’s array of policy working groups, getting a chance to weigh in on policy positions and speeches. Mr. Genachowski, a Harvard Law School classmate of Mr. Obama, leads the technology working group. Fund-raisers from private equity and hedge funds sit on Mr. Obama’s economic policy group.
Despite Mr. Obama’s image as a newcomer, many of his bundlers are Democratic Party stalwarts, including people who were some of the top fund-raisers for Senator John Kerry in 2004. At least 58 of them appear to have personally made more than $100,000 in contributions to federal candidates and committees over the last decade. Updated bundler lists released recently by the McCain and Obama campaigns show that they have similar numbers of high-dollar fund-raisers.
The Obama fund-raising operation is meticulously organized. Bundlers are assigned tracking numbers, and the finance staff sends them quarterly reminders of how they are doing in meeting their goals.
“There’s no price for admission,” said Alan D. Solomont, a top Democratic fund-raiser in Boston who made his fortune in the nursing home industry and has given more than $1.5 million to Democratic candidates and causes. “We value every donation and every donor equally. But we are a performance-based organization. We want everybody to feel like they’re included, but at the same time we’re not here to have tea together.”
Mr. Obama began courting many of his fund-raisers soon after he burst upon the national scene with his rousing speech at the 2004 Democratic National Convention.
Mr. Solomont, a major fund-raiser both for Mr. Kerry and for Bill Clinton during their presidential runs, received a call on his cellphone in February 2005, a year after Mr. Obama’s election to the Senate, from a member of his staff who asked if he would like to get together with Mr. Obama.
They met for Chinese food in Washington the following week, and Mr. Obama scored points with Mr. Solomont when he pointed out that they had both been community organizers earlier in their careers.
“I’ve been involved in politics a long time,” Mr. Solomont said. “Nobody’s bothered to know that about me.”
Early that same year, Mr. Obama attended a dinner in the Bay Area for about 20 major Kerry supporters. The dinner was organized by Mark Gorenberg, a Silicon Valley venture capitalist who was Mr. Kerry’s single biggest fund-raiser, after Mr. Obama’s staff members contacted him. Several of those on hand, including Mr. Gorenberg and John Roos, head of a Silicon Valley law firm, became among the earliest and biggest check collectors for Mr. Obama’s presidential bid.
In 2006, Mr. Obama became a vice chairman of the Democratic Senatorial Campaign Committee, giving him the opportunity to campaign across the country and to cultivate other potential benefactors.
When his book “The Audacity of Hope” came out later that year, his staff members organized book parties at the homes of major Democratic donors.
In December, Mr. Obama visited the New York office of the billionaire investor George Soros to court a roomful of high-powered Democratic fund-raisers, hoping to lure some of them away from Mrs. Clinton. Not everyone was swayed, but Mr. Obama won over Orin Kramer, a hedge-fund executive from New Jersey, and Mr. Wolf, the UBS executive, both of whom are now among Mr. Obama’s biggest fund-raisers.
Mr. Obama signed on as his finance director Julianna Smoot, who had led fund-raising for Senate Democrats and, before that, for Senator Tom Daschle when he was majority leader.
With guidance from Ms. Smoot, a key part of the campaign’s fast start was its success in scooping up top former Kerry fund-raisers, including Lou Susman, a Chicago investment banker who was Mr. Kerry’s national finance chairman, and Kirk Wagar, a lawyer in Miami who became Mr. Obama’s finance chairman in Florida.
Even so, the initial meeting of Mr. Obama’s national finance committee, held in Chicago the day after he officially announced his candidacy, was a relatively small affair, numbering about 75 people.
Penny Pritzker, the billionaire heiress to the Hyatt hotel fortune whom Mr. Obama asked to become his finance chairwoman, challenged the group to double in size.
The number of bundlers ballooned quickly. The Obama campaign made important inroads among affluent people under age 45, including Silicon Valley engineers and hedge-fund analysts, many of whom had not been on the political radar screen.
Donations in June, the latest month for which Mr. Obama has disclosed his donors to the Federal Election Commission, illustrate the double-barreled nature of the campaign’s fund-raising. Mr. Obama brought in nearly $31 million in contributions of less than $200, his best month for small donations. But he also collected more than $12 million in contributions of $1,000 or more, the most since the first half of 2007.
The share from large contributions appears poised to increase, as Mr. Obama has stepped up his fund-raising schedule.
“In 2007, the campaign relied on the tried and true methods like fund-raisers, for both large- and small-dollar donors, with the candidate or his surrogates, and the Internet largely financed it in 2008,” said Kirk Dornbush, the president of a biotech firm and a top fund-raiser in Atlanta. “When you combine the traditional fund-raising methods with the continued online contributions, you have a very, very powerful fund-raising engine.”
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