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Big donors are among Obama's backers

Sen. Barack Obama credits his presidential campaign with creating a "parallel public financing system" built on a wave of modest donations. But those with wealth and power also have played a critical role in creating Obama's record-breaking fundraising machine.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

Sen. Barack Obama credits his presidential campaign with creating a "parallel public financing system" built on a wave of modest donations from homemakers and high school teachers. Small givers, he said at a fundraiser this week, "will have as much access and influence over the course and direction of our campaign that has traditionally been reserved for the wealthy and the powerful."

But those with wealth and power also have played a critical role in creating Obama's record-breaking fundraising machine, and their generosity has earned them a prominent voice in shaping his campaign. Seventy-nine "bundlers," five of them billionaires, have tapped their personal networks to raise at least $200,000 each. They have helped the campaign recruit more than 27,000 donors to write checks for $2,300, the maximum allowed. Donors who have given more than $200 account for about half of Obama's total haul, which stands at nearly $240 million.

Obama's success in assembling bundlers offers another perspective on a campaign that promotes itself as a grass-roots effort. While the senator from Illinois has had unprecedented success generating small donations, many made online, the work of bundlers first signaled the seriousness of his candidacy a year ago and will be crucial as he heads into the final Democratic primaries with a lead against Sen. Hillary Rodham Clinton (N.Y.).

The bundler list also sheds light on those who might seek to influence an Obama White House. It includes traditional Democratic givers — Hollywood, trial lawyers and Wall Street — and newcomers such as young hedge fund executives, Silicon Valley entrepreneurs, Chicago-based developers and members of the black business elite. One-third had never contributed to a presidential campaign, much less raised money.

California cash
The list includes partners from 18 top law firms, 21 Wall Street executives and power brokers from Fortune 500 companies. California is the top source, with 19 bundlers. Both Illinois and Washington, D.C., have six, and five hail from New York.

Among the group are businessmen such as Kenneth Griffin, a famously private 39-year-old billionaire who threw his support behind Obama's presidential campaign just as he hired a team of lobbyists to urge Congress to preserve a lucrative tax loophole.

A year ago, Griffin invited Obama to speak to employees of his Chicago hedge fund, Citadel Investment Group, and in subsequent months, employees and their families gave the candidate nearly $200,000. Griffin had previously backed Republicans, including Obama's initial U.S. Senate opponent.

Obama resisted Citadel's lobbying push, but a hedge fund executive who knows Griffin said he suspects Griffin's continued support owes to more than a desire to sway the senator on the tax issue. "Ken's a smart guy, and I guess he's done the math and decided that Barack is the best candidate," said Daniel Loeb, the chief executive of Third Point Management in New York.

Casino developer donates
Several on Obama's list at least appear to have interests in conflict with his platform. There is the billionaire casino developer who plans to put a slot parlor in Philadelphia; Obama has decried gambling for its steep "moral and social cost." And there is the director of General Dynamics, the military supplier that has seen profits soar since the onset of the Iraq war and that has benefited from at least one Obama earmark.

The use of bundlers was perfected by George W. Bush, who in 2000 and 2004 set some fundraising records that Obama has shattered. Bush established a competitive hierarchy of "Rangers" and "Pioneers," with tracking numbers to monitor fundraisers' progress and silver cuff links and belt buckles for high achievers.

Obama's bundlers help make up a more loosely defined "national finance committee," whose members are made to feel part of the campaign's inner workings through weekly conference calls and quarterly meetings at which they quiz the candidate or his strategists. At one meeting, bundlers urged the campaign to link Iraq war costs with the faltering economy. And they got an advance copy of Obama's Philadelphia speech in which he addressed the incendiary remarks of his longtime pastor.

Obama policy advisers also meet with bundlers and other top givers. Anthony Lake, who served as President Bill Clinton's national security adviser, has met with so many Obama contributors that, in an unusual move, the campaign credits him for funds raised when he conducts the meetings. He's on the top bundler list. "This is the first time I've ever gotten involved in this kind of work in a campaign," Lake said.

Patronage appointments?
Bush bundlers openly discussed the system's transactional nature — more than 100 of the 246 Pioneers in 2000 received an administration job or appointment, and 23 became ambassadors. Obama's fundraisers say they see their work more selflessly.

Boston financier Alan Solomont, who leads Obama's Northeast fundraising, said many are rallying to the candidate because they expect that he will break with old traditions, such as rewarding big fundraisers. "There's nobody with their hand out," Solomont said. "People are doing this because they believe in this candidate."

The campaign maintains that its fundraising success among average Americans has lessened its reliance on big donors. Donations of less than $200 account for nearly half of Obama's contributions, compared with a third of Clinton's and a quarter of Sen. John McCain's, according to the Campaign Finance Institute. More than 1 million people have given money to Obama's campaign.

"In this campaign, outsized influence is given to the small donors," Obama spokesman Bill Burton said.

Still, Obama wants to hold his own against Clinton in attracting big donors. He began assembling his bundlers well before announcing his bid in February 2007. Chairing his national finance committee was Penny Pritzker, heiress of Chicago's Hyatt hotel fortune, who raised money for his 2004 Senate campaign. Running day-to-day fundraising was North Carolina native Julianna Smoot, who had raised money for the national trial lawyers association and the Democratic Senatorial Campaign Committee.

Smoot put together a list of wealthy Democrats, and Obama, with only two years in Washington under his belt, deftly courted them. On Feb. 5, 2007, for example, Florida investment manager Mark Gilbert flew to Washington to meet with Obama but got only a short evening meeting before the candidate broke off for another engagement.

'Very impressed'
Obama did not realize that Gilbert had come just to see him, and when he found out, he quickly made amends. Gilbert got a call that night at his hotel. "It was the senator," he said. "He said he didn't realize he was going to have so little time," and he invited Gilbert to breakfast. "I was very impressed that someone trying to build a national team would reach out like that," he said.

The bundlers grew to include perennial Democratic money men, including Louis B. Susman, the Citigroup executive who headed fundraising for Sen. John F. Kerry (Mass.) in 2004. Kirk Wager, a Florida trial lawyer and Kerry fundraiser, had planned to sit out this election before Obama persuaded him to come on board.

"Barack called me and said, 'I really need your help.' He said, 'No, Kirk, I really mean it. I literally know less than five people in the state of Florida,' " Wager said.

But because Clinton had already enlisted many reliable party backers, Obama also had to appeal to newcomers, said James L. Hudson, a D.C. developer and Obama bundler. "It required some stretching," he said.

New faces included Scott Blake Harris, a Washington telecommunications lawyer whose son worked as an intern in Obama's Senate office. Harris avoided Obama's ban on accepting money from federal lobbyists by cutting off his work for such companies as Microsoft, Cisco and Sprint-Nextel at the end of 2006.

"I had never raised a nickel for anybody," Harris said. "But I just found him to be totally captivating and moving."

Chicago offered more opportunities. Obama knew he could count on longtime supporters in the African American business community, such as his wife's friend, Desiree Rogers, head of the Peoples Gas utility. Her ex-husband, John W. Rogers, the head of Ariel Capital Management, is also a bundler.

'Uncanny ability'
A $1,000-a-person fundraiser that Desiree Rogers hosted in January attracted 600 people and spilled over to a neighbor's apartment. Obama repeated his pitch three times, she said.

"He listens intently to . . . questions, and he answers them in as long and personable way as he can. He has an uncanny ability to remember names and the subject area someone is interested in," Rogers said.

The Chicago contingent also includes James Crown, a director of General Dynamics, the military contractor in which his family holds a large stake. The company has been the beneficiary of at least one Obama earmark, a request to spend $8 million on a high-explosive technology program for the Army's Bradley Fighting Vehicle. The program got $1.3 million.

The descendants of Henry Crown, architect of a great American fortune, James Crown and his family donated more than $128,000 to Obama's U.S. Senate race in 2004. Crown was among the first people Obama approached as he contemplated a White House run.

Crown said he and Obama never discussed General Dynamics, which, with its focus on Army programs, is a defense contractor that has benefited directly from the Iraq war. Obama's opposition to the war never meant that he wanted the armed forces to be poorly equipped, Crown said.

"I stand in agreement with what he has said [about the Iraq war.] Those who work in the defense industry are extremely focused on the national defense," he said. "That doesn't mean we want to be fighting wars."

The Chicago finance elite has been a major hub of Obama's fundraising, led by Pritzker. Another major figure is billionaire Neil G. Bluhm, a hotel and office building developer. But Bluhm has posed a symbolic problem for Obama in Pennsylvania, site of an April 22 primary, because his latest endeavor is a push to open a controversial casino along the Philadelphia waterfront.

Bluhm's path crossed Obama's in 2003, when Bluhm pursued a gaming license for a Chicago riverboat. That June, he gave the first $1,000 of what would become more than $78,000 in contributions from him and his family.

Gambling licenses
In 2006, Pennsylvania awarded Bluhm one of two coveted Philadelphia gambling licenses. Last year, his partners in the project, called SugarHouse, made $2,300 donations to Obama, including nearly $50,000 from the Philadelphia law firm Cozen O'Connor, which represents him in the deal.

Bluhm said that the gaming project "has got nothing to do with" his support for Obama and that the two have never discussed it. "My interest in him is, I think he's inspirational, I think he will enormously improve our economy and our relations with other countries," he said.

The Obama-Bluhm connection startled members of Philadelphia's anti-casino groups who knew that the senator had resisted efforts to legalize gambling. It was "really surprising to find [Bluhm] in Obama's corner," said Debbie King, who helped start Mothers Against SugarHouse. "I was inclined to vote for Hillary. But when I heard Obama's criticism about gambling, I thought about changing my vote. Now I'm not sure what to do."

Then there is Griffin, the hedge fund executive. Of his $230,000 in contributions since 2003, slightly more has gone to Republicans than to Democrats, including $2,000 to President Bush's reelection campaign. When Obama ran for Senate, Griffin backed Jack Ryan, Obama's original GOP opponent.

But Obama's presidential campaign launched just as Griffin's Citadel sought to go public, and the investment group moved to enlarge its Washington presence, vastly increasing its lobbying spending to $790,000 last year. Its focus: fighting a proposal to apply the higher corporate tax rate to private equity firms and hedge funds that go public.

In July, Griffin told the New York Times that his initiative would be diminished if his tax rates went up. "I am proud to be an American," he said. "But if the tax became too high, as a matter of principle I would not be working this hard.''

That month, Obama came out for closing the loophole, and he later decried the legislation's collapse in October, after opposition by Citadel and others. "If there was ever a doubt that Washington lobbyists don't actually represent real Americans, it's the fact that they stopped leaders of both parties from requiring elite investment firms to pay their fair share of taxes," he said.

A Citadel spokeswoman declined to comment. Stephen Brown, a finance professor at New York University, said it is hard not to discern self-interest. Hedge funds "have a strong interest in becoming involved in the political process, and that is really the whole story behind their support of Obama," he said. "In their analysis — and they have good analysts — Obama is likely to be successful, so it is very much in their advantage to have a strong voice with him."

Database editor Sarah Cohen and staff researchers Lucy Shackelford, Alice Crites and Madonna Lebling contributed to this report.