The Washington Post

Obama’s new political group to lure unlimited donations

By Tom Hamburger–

In close consultation with President Obama, two of his top political strategists are designing an ambitious new organization funded by donations from wealthy individuals and corporations aimed at making political and legislative gains at the federal and state levels.

The fledgling Organizing for Action says it will be nonpartisan and steer clear of election activity. But the line between issue disputes and electoral politics can be a fuzzy one. The first of an expected wave of ads on gun control, for example, has targeted only Republicans. And OFA board member Jim Messina, who managed Obama’s reelection campaign, has been talking with Democratic Party leaders, including those responsible for success in the 2014 midterm elections.

Over the past month, Messina and Jon Carson, a leading strategist, have traveled the country meeting with members of the Obama 2012 National Finance Committee, who are being pressed back to work to find support for the new organization.

In huddles with Hollywood studio executives, California energy investors and Chicago business titans, they have suggested $500,000 as a target level for OFA bundlers and that top donors get invitations to quarterly OFA board meetings attended by the president.

The next step in converting Obama’s election apparatus to grass-roots lobbying is a “founders summit” March 13 that includes a $50,000-per-person meeting at the Jefferson hotel in Washington led by Messina and Carson. Those planning to attend said they hope the president will be part of the day’s agenda, though the White House and OFA declined to comment on that possibility.

A one-page memo accompanying the invitation lays out the goals of the new OFA: Building grass-roots support for Obama proposals on issues ranging from climate change to immigration reform to women’s health.

In addition, the memo says, the OFA will help “strengthen the progressive movement and train our next generation of leaders.”

It also promises to engage in “state-by-state fights” over issues such as “ballot access and marriage equality.”

Advocates for campaign finance reform see the organization’s goal of raising tens of millions of dollars as a new channel to allow wealthy individuals and corporations to seek favors from the administration. And they criticize Obama for abandoning reform rhetoric in favor of a group that can raise unlimited sums with limited transparency, the very circumstances he complained about publicly in 2010 when the Supreme Court granted corporations and unions the opportunity to contribute to groups seeking to influence elections.

Unlike political parties and other organizations set up to win elections, the OFA is not subject to federal election fundraising restrictions and disclosure requirements, meaning the public will have only limited opportunities to learn about its operations, including how revenue is collected and spent.

OFA officials say they have adopted a voluntary disclosure system that goes beyond that required by law and that will provide sufficient public review.

Although the organization is only four weeks old, Obama has begun to use it to build support for his policy initiatives, including a six-figure online advertising campaign that started Friday targeting 13 Republican members of Congress who have yet to support his proposal for background checks for gun purchasers.

A powerful force

Because the president is personally backing a new group that has access to his campaign’s data on voters, including e-mail addresses and social network information, Democrats and Republicans say it could be a powerful force in upcoming congressional votes and elections.

The OFA will draw on “the tools, knowledge, networks and volunteers that secured President Obama a second term,” according to the summary prepared for donors. It lists resources the group can deploy: a “grassroots army” of 2.2 million volunteers, and “social media assets” that include 33 million Facebook friends, 26 million Twitter followers and 17 million e-mail subscribers.

With such potential power comes the new organization’s greatest challenge: Sustaining enthusiasm and support from donors and party regulars in the months after Obama’s election to a second term.

The ambitious goals and plentiful political resources were initially worrisome to some congressional Democrats, who feared that the new Obama entity could eclipse their fundraising efforts and even their legislative independence. Messina, lionized for his role managing the 2012 campaign, scored points with House Democrats with his trips to Capitol Hill expressing his interest in working together. His message was brought home dramatically last month when he promised Rep. Steve Israel (N.Y.), chairman of the Democratic Congressional Campaign Committee, that Obama would headline eight fundraisers for House Democrats in 2013.

After the 2008 campaign, the field organization moved over to the Democratic National Committee, but some insiders felt the Democrats’ grass-roots organizing underperformed in mobilizing voter support for the health-care overhaul and other parts of the president’s agenda.

‘Social welfare’ designation

OFA stands alone as a nonprofit group independent of the DNC. Instead of being subject to Federal Election Commission disclosure rules, it has registered under section 501(c)4 of the tax code, meaning it will be governed by the looser standards of the Internal Revenue Service rather than the more rigorous disclosure rules of the FEC.

These 501(c)4 organizations are classified as “social welfare organizations.” Because they are required to have education or another public cause as their “primary purpose,” most of their funds cannot be spent on elections. Karl Rove’s Crossroads GPS organization is set up in similar fashion, and critics have said that most of the organization’s millions are spent to influence elections rather than educate or promote public welfare, a complaint the organization rejects.

“The new OFA organization is officially nonpartisan,” said Katie Hogan, who moved over from the campaign’s press office to speak for the OFA. Supporting the president’s policy agenda is OFA’s primary purpose, she said, adding that the organization “will not participate in electoral contests.”

Hogan’s statement, reiterated on OFA’s Web site, contrasts with the impression left in some quarters after conversations with Messina about getting Democratic candidates access to the Obama’s campaign’s rich store of voter data, which could help any candidate target and deliver a message.

Those files are being used by OFA. But Hogan said the data are owned by the Obama 2012 reelection campaign and have been leased to the OFA.

Obama’s decision to back an organization raising funds from corporations and the wealthy appalled advocates of campaign finance reform.

“This is an unprecedented vehicle providing a whole new entry point for corruption by individuals and companies that may seek to buy influence with the administration,” said Fred Wertheimer, a Washington lawyer and reform advocate who is president of the organization Democracy 21. “It will either lead to scandal or the appearance of scandal.”

“This OFA idea is a terrible example of individuals and corporations being asked to pay to get access” to administration officials, said Bob Edgar, a former Democratic congressman from Pennsylvania who heads Common Cause.

Hogan and others at OFA point out that the nonprofit plans to go further than Crossroads GPS and other 501(c)4 groups by voluntarily releasing the identity of donors, with contribution to be listed in ranges.

Bruce Freed, who leads a nonpartisan center for public accountability that encourages the disclosure of corporate political spending, says he is disappointed by the decision to disclose donations only in marginally useful brackets. Freed says this approach will provide the public less information than many Fortune 500 companies have already agreed to provide to shareholders, such as the date and the precise amount of donations.

One longtime observer of political parties, Thomas Mann of the Brookings Institution, is not inclined to join those reform advocates who condemn Obama’s experiment with a new organization. The grass-roots effort has only a long-shot chance of succeeding, he said. “But at this early stage, I applaud any attempt to try political motivation and innovation” as a way to attempt progress in an era of political polarization and gridlock.