Obama fundraising machine relies on the rich and powerful
WASHINGTON - Even as Democratic presidential candidate Barack Obama has promoted a large following of small-dollar contributors representing ordinary Americans, his campaign has built an old-school political fundraising machine that relies heavily on the wealthy and the powerful, including a Chicago-based hedge fund manager who earned $1.4 billion last year.
The network of fundraisers generating money for the Illinois senator's campaign includes a heavy representation of attorneys at well-connected law firms and members of the financial industry, including highly paid managers of hedge funds and private equity funds whose lofty compensation has recently generated public controversy.
The Obama campaign is hardly unique in depending upon fundraisers drawn from the nation's financial elite to gather the resources for a presidential bid. All of the major presidential candidates have developed their own networks of fundraisers, with the financial industry and legal profession providing a deep well of money for both parties.
But the Obama fundraising operation provides a contrast to an image that the campaign has ceaselessly cultivated as a movement powered by everyday Americans.
Among the high-level fundraisers on a list that the Obama campaign posted on its Web site late Tuesday is Kenneth Griffin, head of the Chicago-based hedge fund Citadel Investment Group and among Mayor Richard Daley's top financial patrons. Griffin's $1.4 billion pay in 2006 made him the second highest-paid hedge fund manager in the country, according to Institutional Investor's Alpha Magazine.
Though it is unclear how much he has raised for Obama, employees of his firm have alone donated at least $169,000, according to the Center for Responsive Politics, a nonpartisan watchdog group.
The Obama campaign disclosed the names of 120 major fundraisers who had attracted at least $50,000 in contributions to Obama by June 30 through their appeals to friends, family and business associates. Together with a list released at the end of the first quarter, the campaign has now identified a total of 260 people who have raised that amount or more.
Half the fundraisers live in just three metropolitan regions that are seats of financial or political power: Washington, New York and Chicago. Obama's home base of Chicago accounts for the largest proportion of the large fundraisers, about a fifth, according to a Tribune analysis.
Along with many corporate executives, the newly disclosed Obama fundraisers include a smattering of entertainment industry figures. Lawrence Bender, co-producer of Al Gore's "An Inconvenient Truth" and most of Quentin Tarantino's movies, is on the list. So is Hollywood agent Ari Emanuel, brother of Rep. Rahm Emanuel, D-Ill., and the model for the Ari Gold character on HBO's "Entourage." Fox Filmed Entertainment Chairman Thomas Rothman and BET Chairman and CEO Debra Lee also are among them.
Those major fundraisers, sometimes called bundlers, have an outsized importance in financing the campaign.
Though it is impossible to know exactly how much of the $58 million Obama raised during the first half of the year came by way of bundlers, those on the list would not be there if they had not raised at least $50,000. That means at least $13 million of his year-to-date total came through bundlers, and the total is probably much higher.
Despite the media attention the campaign has grabbed by attracting 258,000 donors - in many cases people of modest means who have given over the Internet - a much smaller group of large donors provides most of the funds for the campaign. And those large donors are best tapped through fundraisers who can call on networks of acquaintances and business associates who can easily write big checks.
The bundlers are crucial to raising money for a presidential primary campaign because federal law limits individuals to contributions of no more than $2,300 per candidate.
Sixty percent of the Obama campaign's funds come from people who have given at least $1,000, the kind of donors who are most often recruited by bundlers. Less than 30 percent of his contributions came from people who gave less than $200.
Democratic rival Sen. Hillary Clinton relies even more heavily on large-dollar donations for her campaign. Earlier this month, the New York senator identified 212 major fundraisers, which she calls HillRaisers. But she only identifies bundlers who have reached a higher threshold of contributions, $100,000.
Campaigns are not legally required to identify their fundraisers, only their contributors.
Obama's campaign theme of reform has left him open to criticism of his fundraising operation. On the campaign trail, he regularly criticizes the influence of established special interests in shaping national policy and promotes a pledge he has made not to accept contributions from federal lobbyists.
In a Democratic debate this week, former Sen. Mike Gravel of Alaska argued that Obama's disavowal of lobbyist contributions is less than pure because he still has wealthy executives who employ lobbyists raising money for him.
Gravel singled out one Obama fundraiser, Robert Wolf, America's chairman for Swiss-based UBS Investment Bank, which Gravel criticized as "a foreign-owned bank" with "lobbyists in Washington." Employees of UBS have given at least $142,000 to the Obama campaign.
Obama's fundraisers include many other financial industry executives. At least 17 of his major fundraisers are managers at either hedge funds or private equity funds, two loosely regulated financial service sectors that recently have stirred political controversy because of the soaring pay of fund managers and a legal loophole that allows them to pay lower tax rates on their earnings.
Obama and his major Democratic rivals, Clinton and former Sen. John Edwards of North Carolina, have only recently said they would back proposed legislation that would remove the tax break for hedge funds and private equity companies that convert to publicly traded corporations.
Among the hedge fund managers raising money for Obama is Paul Tudor Jones, founder of Tudor Investment Corp., known for throwing lavish parties, including one Christmas party that featured the Radio City Rockettes. Jones hosted a fundraiser for Obama at his home in Greenwich, Conn.
Obama spokesman Jen Psaki said the resources generated by major fundraisers does not diminish the importance of the campaign's small-dollar donors.
"What is unique about our success is not just the amount that we have been able to raise, but also the number of people we have been able to engage and excite through this process," Psaki said. "What will help us down the road are the 258,000 who plan to play an active role in this campaign, and they are the people we will rely on in the home stretch of this campaign."
(Mike Dorning reported from Washington; John McCormick reported from Chicago.)