Politico: Elite donors dodge the DNC

Politico
Elite donors dodge the DNC
By Jeanne Cummings
March 16, 2010

Former White House social secretary Desiree Rogers took plenty of blame for the gate crashers at President Barack Obama’s first state dinner and for posing for fashion shoots in glossy magazines.

But a previously undisclosed gripe about her provides another explanation for her abrupt departure last month: Some of Obama’s biggest fundraisers, already chafing at not getting enough love from the administration, didn’t even get Christmas cards last year.

“The donors rose up, and that was another reason Desiree got pushed out,” said a source close to the White House.

While such a slight may seem insignificant, it can carry major repercussions in a year when the Democratic National Committee is going to need every possible resource to help the party’s congressional committees stave off major losses in the midterm elections.

According to an analysis by POLITICO, only 15 — or just 10 percent — of the 150 biggest fundraisers for the Obama campaign gave the maximum $30,400 to the DNC last year.

“I have not had that much contact with the DNC in the last six to 12 months since the election. It’s very strange,” said Alan Patricof, a New York investor and longtime Democratic donor.

To be sure, the DNC’s fundraising is humming along at a record pace, bringing in about $30 million more than it did in 2005, the last midterm election season, and giving the committee a small (less than $1 million) but rare cash advantage over the Republican National Committee.

Still, the committee lags behind the records set by Republicans when they controlled both the White House and Congress.

As of the end of January, the DNC had raised $93 million and had about $10 million in the bank. In January 2006, the last midterms when Republicans faced tough reelections, the RNC already had nearly $40 million in the bank — and the party still went on to lose its majorities.

DNC spokesman Hari Sevugan acknowledged that the committee may not be keeping pace with President George W. Bush’s RNC, but it is doing very well, he said, compared with RNC Chairman Michael Steele’s operation.

“This isn’t an exercise that should be seen in isolation,” said Sevugan. Not only is the DNC raising money at about the same rate as the RNC, “the Republicans have set themselves up for a series of bloody primaries. They are going to be bleeding early cash in a number of places.”

In addition, Sevugan noted that the committee is keeping pace even as it complies with Obama’s ban on contributions from lobbyists and political action committees — challenges the Republicans don’t face.

Still, one of the quickest ways to fill the Democrats’ campaign war chest will be re-energizing Obama’s major donors.

Mark Gilbert, a Florida fundraiser who now serves as a DNC deputy finance chairman, said some of his colleagues are simply taking a break after an exhausting presidential season and will become more active as the midterms near.

“There is the knowledge that winning the presidency was just the first part. The second part is governing,” said Gilbert. “To allow the president to do the things he wants to do, we need to continue to raise money to support candidates and the president.”

The White House recently sent what could be a rallying call to its donors when it appointed Julianna Smoot, the president’s campaign finance director, to replace Rogers as social secretary.

Smoot brings a variety of strengths to the job: She’s detail-oriented, she’s a strong manager, and she knows both the political and the donor worlds.

While the White House rejected the notion that Smoot’s arrival would spring open doors to donors, insiders said she can at least be a familiar point of contact for them — and she’s unlikely to leave anybody off holiday card lists. “A lot of things need to be fixed,” said one person familiar with the White House decision.

The care and treatment of big donors can take many forms. As his predecessors did, Obama rewarded some supporters with ambassadorships. Boston investor Alan Solomont is in Spain, Colorado businessman Bruce Oreck is in Finland, and Chicago investor Louis Susman is in England.

For those who don’t go abroad, perks can vary. President Bill Clinton’s administration was notorious for White House sleepovers and getaways at Camp David. Bush offered donors updates on legislative progress and policy discussions going on inside the White House.

A review of White House visitor logs by POLITICO and interviews with donors suggest that many of Obama’s backers aren’t getting much of what either of his predecessors offered. A few donors have been granted tours, some were invited to last year’s St. Patrick’s Day party, and some have won face time with the president after being appointed to various commissions.

But the state dinner in honor of Indian Prime Minister Manmohan Singh was so short on donors, one sniffed it was more “a big staff party” than a chance to recognize those who had labored for two years to raise the millions Obama needed to get elected.

Most Obama donors contacted by POLITICO said they aren’t looking for a lot of attention. “We didn’t do it for that reason. I think most people who helped Obama early on just believed in the guy,” said Stewart Bainum, an Obama backer from Maryland. “But we are all human, and it is nice to be recognized, too.”

Still, Bainum and others said the White House’s lack of attention only reinforces the reasons they decided to back him over other Democratic candidates. Andy Spahn, a Hollywood-based fundraiser for Obama, said the White House’s distance from donors “doesn’t make fundraising easier, but it is all for the good of the nation.”

While acknowledging that “this sounds goody-goody,” Peter Buttenwieser, a Philadelphia philanthropist and Obama fundraiser, said, “What would make me happy is if we would pass health care and an expanded jobs program. I’m much more concerned about what the administration does with that than whether they are appropriately grateful or not grateful to donors.”

The challenge for the DNC is that it now has the burden of both picking up the costs of maintaining portions of the president’s campaign apparatus and raising enough cash to help House and Senate candidates in the fall.

Organizing for America, for instance, which ran Obama’s vast grass-roots operation in 2008, is now operating out of the DNC. While OFA has boosted the DNC’s payroll costs, it also is a revenue generator. With the Obama small-donor list at its disposal, the DNC saw contributions from donors who gave less than $200 jump from $35 million in 2005, when Howard Dean ran the committee, to $46 million in 2009, according to a Federal Election Commission analysis.

The president’s polling experts, on the other hand, don’t generate new cash, but they do drain from the committee’s treasury. They collected nearly $3 million last year, FEC records show.

That puts the DNC under added pressure to raise record sums, even as it adjusts to Obama’s self-imposed limits on contributions.

For instance, Obama’s ban on donations from lobbyists and political action committees eliminated roughly $5 million every year from the committee’s treasury.

In the 2006 midterms, the Washington metropolitan area, home to many lobbyists, delivered $3.3 million to the DNC, which made it the second most lucrative metro area for the committee, just behind New York.

In this cycle, Washington ranks as just the fourth top metro area, with donations of about $1.9 million. Los Angeles is now first on the list, after delivering nearly $4 million to the DNC so far. New York and San Francisco are sandwiched in between in the second and third slots.

“Typically, the ‘money in the know’ — the Washington-based money from the PAC and lobbying community — is the most accessible money in the early part of an election cycle,” said Anthony Corrado, a campaign finance expert.

The economic downturn is also taking a toll. It’s diminishing some donors’ ability to give and discouraging the White House from putting the president or vice president in settings where they are surrounded by wealthy political contributors.

That’s particularly so in New York, where donors are already disgruntled over proposed financial reregulation and the president’s vilification of Wall Street.

Since his Inauguration, the president has attended 33 political fundraising events, generating about $32 million for party committees and candidates, according to CBS News Radio correspondent Mark Knoller, who has kept track of presidential travel for more than a decade.

In contrast, Bush attended just 13 political fundraisers in 2001 before the terrorist attacks in Washington and New York that September, raising about $53 million. Bush canceled the rest of his fundraising events that year, according to Knoller’s records.

And it hasn’t helped that until he left office in January, DNC Chairman Tim Kaine had to split his time over the past year between the committee’s work and his job as governor of Virginia. But he gets good marks from donors.

Kirk Rudy, an Obama fundraiser based in Austin, said that on Kaine’s first trip to Texas as DNC chairman, he spent days traveling the state and wowing surprised donors with his fluent Spanish.

“I really haven’t in the past been a contributor to the DNC,” said Kirk. “But I was very involved in President Obama’s campaign and felt it was counterintuitive to walk away, because that’s really when the work begins.”