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Barack Obama's Slippery Fund-Raising Slope 

Small donors aside, he's awash in cash from big labor and business. Can he say no?

Thursday, Oct 30 2008
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On September 3, Michelle Obama, the wife of Democratic presidential candidate Barack Obama, flew into Los Angeles for a quick but profitable visit. After sitting for an interview with talk-show host Ellen DeGeneres, Obama attended back-to-back fund-raisers at the homes of Creative Artists Agency managing partner Bryan Lourd and actor Samuel L. Jackson. In just two or three hours, she pulled in a reported $1.5 million in campaign contributions for her husband. Thirteen days later, the candidate himself arrived in Beverly Hills, where he was serenaded by Barbra Streisand at the Regent Beverly Wilshire Hotel and Holly­wood stars wrote checks as large as $28,500 per person. The final tally for that evening was nearly $9 million for Obama’s coffers.

While big-money donors from the entertainment industry were handing over their cash, the Obama campaign also sent out e-mails to millions of ordinary Americans asking for whatever they could afford. Many of them responded, with contributions of $25 or $50. By the end of September, Obama’s fund-raising savvy earned him $150 million in small- and big-money donations — a record one-month haul for any presidential campaign.

The heavy emphasis on fund-raising, says Bill Whalen, a research fellow at the Hoover Institute, a public policy think tank at Stanford University, is a key part of a “multi-tiered strategy” for an Obama win. With a flush war chest — the candidate has raised a record $600 million — the Obama campaign has opened fully staffed offices in key battleground states, saturated TV, and constantly tested the messages in his ads.

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“They’re trying to create an overwhelming force,” Whalen says, and they may have succeeded. According to polls, Obama’s tactics are working, and the Illinois senator looks set to be the next president.

But when, or if, Obama wins on Election Day, the millions of small-money donors won’t be the only people expecting certain things from the new president. Big-money supporters, who, according to national media outlets, have increasingly become major players in the Obama cash-production juggernaut, will want payback.

"We have seen time and time again that people who donate generously to a presidential campaign or a congressional campaign certainly have that person’s ear. They will get their phone calls returned," according to Mary Boyle, spokeswoman for Common Cause, a nonprofit, nonpartisan citizens’ lobbying group based in Washington D.C.

While Obama says he does not accept contributions from Washington lobbyists, that’s not much of a distinction these days. He has been accepting huge amounts from corporations, unions and endless special-interest groups. The influence of big-money donors in a possible Obama administration could create a political backlash if he doesn’t find a way to resist the enormous pressure that will be brought to bear.

“Doling out favors to special interests and big donors over small donors is a recipe for trouble for Obama,” warns Nick Nyhart, co-founder and president of Public Campaign, another nonprofit, nonpartisan group also based in the nation’s capital. “His mantra has been change and changing the way Washington works, and people will hold him to that.”

Although Obama would probably enjoy a long press honeymoon from a press corps that, according to the Los Angeles Times and Pew Research, is clearly favoring Obama over Senator John McCain in its news coverage, others will be ready to pounce, led by critics and good-government groups watching the first few months of Obama’s presidency, when political rewards are traditionally handed out fast and furiously.

In mid-June, Obama became the first presidential candidate of a major party to opt out of public financing since it was created in 1976, because it would have prevented him from taking private donations and spending more than $84.1 million.

“When you have the ability to exceed the [fund-raising] limit” by as much as Obama has, says Josh Israel, a project coordinator at the Center for Public Integrity, a nonprofit organization based in Washington, D.C., “it seems pretty obvious the system was not going to hold. It was too out of date.”

“Clearly, opting out of the system was the best choice for him,” says Tim Hodson, executive director of the Center for California Studies at Sacramento State University. “Years from now, I think Obama’s campaign will be seen as the most successful campaign in American history.”

But has Obama been too successful? In July, a few weeks before the Democratic National Convention, Obama and his handlers formed joint fund-raising committees through a loophole (ironically created by the McCain-Feingold Act) that allows individual donors to write checks far surpassing federal limits of $2,300 — if the money was shared between a candidate and his party’s national and state committees. As a result of the loophole, “[The party committees] are avenues for individuals and others to legally donate tens of thousands of dollars,” says Boyle of Common Cause. John McCain created a similar committee, using the very loophole he had authored.

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