CHICAGO - Sen. Barack Obama tapped everyone from small Internet donors to Hollywood stars and industry titans to raise a towering $25 million in the first three months of this year.
The eye-catching total is a far cry from his first bid for elected office a dozen years ago, when Obama’s earliest seed money came from a streetwise South Side political insider, a longtime friend and patron who has since become something of an embarrassment.
Back in July 1995, Obama’s state Senate campaign received $2,000 from companies controlled by Antoin “Tony” Rezko, the politically influential Chicago businessman indicted last year on state government kickback charges.
The Democratic presidential candidate reported two other financial backers that first month: A Chicago lawyer gave $300, and Cadillac dealer Al Johnson made a $5,000 loan. But the dollars from Rezko, who has pleaded not guilty in two pending federal cases that do not involve Obama, were the first substantial contributions itemized in disclosure reports. And Rezko’s additional fundraising helped the rookie candidate set up shop.
From those modest and now-inconvenient beginnings, records and interviews show, Obama’s fundraising prowess expanded in ever widening circles. The one constant: Obama, who has campaigned as a political outsider, deftly cultivated insiders in nearly every corner of the political establishment.
“Everybody claims Barack now, of course,” said Les Coney, a Chicago businessman who now serves on Obama’s national finance committee. “I have people who call me and say, `We’ll give the maximum,’ without me even asking.”
In federal election reports Obama will file alongside other candidates this weekend, he will detail where his campaign raised its surprising tally, an amount that certainly does not guarantee success but has forced his rivals to consider him a serious contender.
His fundraising apparatus has won attention for its innovation and breadth. Obama’s more than 100,000 donors range from entertainment impresario David Geffen to a former serviceman who gave $5 over the Internet.
A Chicago Tribune examination of the remarkable growth of Obama’s money machine illustrates the methodical steps by which he advanced to become a top-tier national fundraiser.
In its first disclosure reports, the Friends of Obama committee on July 31, 1995, listed a $1,000 contribution from Rezko Foods and another $1,000 from Lakefront Refreshments, a company co-directed by Rezko that ran beachfront concession stands under a contract with the Chicago Park District, records show.
From there Obama built a network of politically active African-American money managers, and advocated for them in Springfield.
He then began to tap Mayor Richard Daley’s lucrative grid of donors. From 1999 through last year, a Chicago Tribune analysis shows, Obama collected more than $1.5 million from some 700 individuals who also contributed to Daley.
Obama’s operation fanned out further as he prepared for the 2004 U.S. Senate primary race, courting wealthy donors who sometimes financed Republicans as well.
Lucy Minor - wife of Robinson Steel Co. Chairman Edward Minor, who also funds Republicans - recalled inviting him to their home in 2003 for a private visit over sodas. Obama did not ask for money, but “I signed on the dotted line right then,” she said. ” It was a breath of fresh air that came into our house that day.”
She and her husband have since given nearly $32,000 to political committees that directly supported Obama.
Obama established his national reach a month after winning the 2004 U.S. Senate primary by creating new fundraising partnerships. He established a joint fund with the Democratic Senatorial Campaign Committee that collected $25,000 apiece from donors such as Hawaii supermarket heiress Colleen Sullivan and now-deceased Lands’ End clothing store founder Gary Comer.
Whether Obama was on a book tour in New York or taking a family vacation to Phoenix, his fundraising machine was almost always in tow for much of 2005 and 2006, just as it is now on the presidential campaign trail.
But he has made his fundraising quest more challenging by vowing not to take money from special-interest political action committees. In a recent letter to supporters about his fundraising success, Obama wrote: “We did it without taking any money from PACs or federal lobbyists. Instead, we’re counting on you; on folks across America who want to take their country back and steer us to a better course.”
But his U.S. Senate campaign raised at least $1.2 million of its $15 million total from special-interest PACs, according to fundraising tracker PoliticalMoneyLine.com. And in January 2005, 20 days after he was sworn into the U.S. Senate, Obama launched his own PAC, Hopefund, which raised $4.4 million over two years, making it one of the largest PACs members of Congress have established to fund other candidates.
Obama has distributed Hopefund’s dollars to Democratic organizations across the country, the Chicago Tribune’s analysis shows, including in the early presidential battleground states of Iowa and New Hampshire as well as Ohio, Pennsylvania and Florida.
A campaign spokesman said that not taking PAC money “doesn’t solve the problem, but it is a symbol of the sort of administration Obama would have in Washington.”
Elected to the Illinois Senate in 1996, Obama crafted a reputation for serving the disadvantaged - and for drawing sustained support from Chicago’s flourishing black-owned financial and investment firms.
Officers and employees of Holland Capital Management donated more than $40,000 to committees that directly supported him from 1999 through last year, for example, and directors and workers at Ariel Capital Management gave more than $50,000 over that period.
Those firms and others met with Illinois officials beginning in 2001, asking to manage a larger portion of the state’s multibillion-dollar pension funds. And they found an ally in Obama. Among other initiatives, he served for three months, from September to December 2003, on the seven-member Senate Select Committee on Public Pension Investments, which recommended ways for state pension funds to use more minority- and women-owned financial firms.
During Obama’s three months on the panel, Ariel directors and employees gave him $14,500, records show, and Holland officers and employees donated $1,500.
If some self-interest was perhaps at play, so too was a sense of shared experience that inspired many African-American professionals. Many of them had never before raised money for a candidate but found common ground in Obama’s Ivy League education, in social networks that crisscrossed the city and in an ethos that celebrated the accumulation of wealth - if it was used to address the broad inequities faced by black Americans.
“You had people who had never participated at this level before. Not just their own contributions, but also rallying other people,” said Ariel President Mellody Hobson.
She recalled hosting an early Obama fundraiser at her cramped apartment in about 1995. As the one-bedroom overflowed with a “mixed group” of people, she said some of the furniture had to be moved out into the hallway to make room for the crowd.
By 2003 and 2004, she said, the buy-in from African-American professionals was so strong that fundraising became relatively easy. “They felt the time was now to get behind one of our own,” Hobson said.
In a typical pattern, Hobson said she met Obama’s wife through Obama’s brother-in-law Craig Robinson, a Princeton University grad like her, and a 1990s board member of a foundation for inner-city students created by Ariel executives.
Obama’s brother-in-law also served in 1999 as a managing director at the bond underwriting firm Loop Capital Markets, which was co-founded by Obama’s neighbor, friend and political financier James Reynolds Jr. Several of Obama’s most active financiers - black and white - say they were first introduced to him by Reynolds.
Among those is investment adviser Barbara Bowles, who had given close to $9,000 even before Obama started his presidential bid, and former Chicago Stock Exchange Vice Chairman Andrew Davis, who with his wife gave $24,000 to Obama’s U.S. Senate bid. Davis served on Obama’s Illinois finance committee for that campaign.
Reynolds also brought Obama to Les Coney, who recalled hosting a late-1990s Obama reception at the Mid America Club in Chicago where they greeted about 15 guests and raised roughly $5,000.
“I would be embarrassed with that kind of turnout now,” Coney said.
But at the time, Coney was senior managing director of Aon Corp., the insurance brokerage founded by prominent Daley backer Patrick Ryan, and that early event signaled the ease with which Obama would navigate the turf of Daley supporters.
Said Coney: “It gave Barack a chance to shake hands with some people.”
During his first state Senate campaign, Obama told the Chicago Reader that he had built strong relationships with people inside Daley’s administration but not asked for their campaign support nor sought the mayor’s endorsement.
The overlap that eventually developed between Obama and Daley donors may not surprise political observers who watched Daley forge ties with lakefront independents during his time in the state Senate from 1972 to 1980. But it shows how adroitly Obama pivoted to embrace the city’s political establishment.
Obama is “grateful for the mayor’s support and counsel in this race,” campaign spokesman Bill Burton said. “But the mayor has never played a significant role in fundraising for Sen. Obama.”
On the opening weekend of his presidential announcement in February, Obama made a stop between trips to Iowa and New Hampshire.
Amid the whirlwind weekend of campaign speeches and events, his entourage arrived at the Hyatt Regency Chicago on East Wacker Drive, where eager fans grazed sandwich and fruit platters and offered checks and credit card payments of up to $2,300.
The mayor’s brother, former Clinton Cabinet member William Daley, was present that night at the Hyatt, one of the more prominent faces in a crowd of more than 700 who contributed an estimated $1 million.