Obama Taps Two Worlds To Fill 2008 War Chest

The Washington Post Sunday - - Front Page - By Matthew Mosk and John Solomon

Sen. Barack Obama’s elite in­ner cir­cle of pres­i­den­tial-cam­paign fundrais­ers filed into the base­ment ball­room of a Wash­ing­ton ho­tel last week to hear the can­di­date de­scribe “the yearn­ing that Amer­ica has for change” and his strat­egy for “tap­ping into it.”

A sen­a­tor for only two years, the Illi­nois Demo­crat has been cast in the early stages of the cam­paign as an up­start who re­fused money from Wash­ing­ton lob­by­ists and par­layed In­ter­net savvy, op­po­si­tion to the Iraq war and grass-roots en­thu­si­asm into a sur­pris­ing $25 mil­lion first quar­ter of fundrais­ing — money that has made him a le­git­i­mate con­tender for the party’s nom­i­na­tion.

Be­hind the closed doors of last week’s strat­egy ses­sion, though, was an­other side to Obama’s fundrais­ing suc­cess. Fill­ing the room were many vet­er­ans of the Demo­cratic fi­nan­cial es­tab­lish­ment: a Hy­att ho­tel heiress, a New York hedge fund man­ager, a Hol­ly­wood movie mogul and a Chicago bil­lion­aire.

Obama stood at the front of the room field­ing ques­tions for nearly an hour from his na­tional fi­nance team, each of whom has pledged to raise at least $250,000. He shared se­cret plans for a se­ries of soon-tobe-re­leased pol­icy state­ments and urged them to call him per­son­ally to “tell me how to com­mu­ni­cate talk-

ing points to you to make you more ef­fec­tive.”

As the first-quar­ter fi­nance re­port his cam­paign will file to­day is ex­pected to doc­u­ment, Obama has man­aged to suc­cess­fully bridge two very dif­fer­ent po­lit­i­cal worlds. Along with thou­sands of first-time donors who sent $50 or $100 from their home com­put­ers, the re­port is to list scores of long­time po­lit­i­cal in­sid­ers who fun­neled stacks of $2,300 checks to Obama’s ac­counts.

The cam­paign an­nounced ear­lier this month that Obama has re­ceived money from more than 100,000 peo­ple, in­clud­ing 50,000 In­ter­net donors — more on­line donors than his chief Demo­cratic ri­val, Sen. Hil­lary Rod­ham Clin­ton (N.Y.), had to­tal donors. Less well-known is the story of how he built a more tra­di­tional fundrais­ing ma­chine fu­eled, in part, by some of the big­gest names in Demo­cratic pol­i­tics.

“It is the sin­gle eas­i­est fundrais­ing phone call that I have ever made, ever,” said Jef­frey Katzen­berg, the Hol­ly­wood pro­ducer, who set out to raise half a mil­lion dol­lars for Obama and raised more than $1.7 mil­lion. “In 25 years. Lit­er­ally. For char­ity, pol­i­tics, any­thing. It kind of blew me away; if I made 100 phone calls, 90 of them were suc­cesses.”

In con­trast to Clin­ton and for­mer North Carolina sen­a­tor John Ed­wards, his other main Demo­cratic ri­val, Obama was a late en­trant in the pres­i­den­tial race, first rais­ing the idea pub­licly last Oc­to­ber and not de­cid­ing firmly un­til Jan­uary.

In his 2004 Se­nate cam­paign, Obama re­lied in part on the mus­cu­lar fi­nan­cial team of Chicago Mayor Richard M. Da­ley, as well as the na­tional donors he picked up af­ter his well-re­ceived speech at the 2004 Demo­cratic Na­tional Con­ven­tion. With noth­ing like the na­tional net­works of Ed­wards and Clin­ton, Obama fi­nance of­fi­cials said they ex­pected it to take time to woo and sign up es­tab­lish­ment fundrais­ers — many of whom had long-stand­ing ties to Clin­ton and her hus­band, Pres­i­dent Bill Clin­ton.

They also knew it would take ef­fort to grow a di­rect-mail fundrais­ing base to keep a reg­u­lar flow of small do­na­tions com­ing in.

Penny Pritzker, the Hy­att heiress, helped raise money for Obama’s Se­nate cam­paign, and he en­listed her as na­tional fi­nance chair­woman for the pres­i­den­tial race. “Can­didly, I’d never done this be­fore; I didn’t know what to ex­pect,” she said.

Fundrais­ers in the field also wor­ried that Obama’s ini­tial pledge to re­ject money from lob­by­ists would slow the early hunt for do­na­tions.

“One of the quick­est sources of cash was off the ta­ble, and there was some early grum­bling,” said one cam­paign ad­viser, who was not au­tho­rized to talk to re­porters and spoke on the con­di­tion of anonymity.

The orig­i­nal goal for the first quar­ter, back in De­cem­ber, was cau­tiously set at $8 mil­lion to $10 mil­lion.

The Pritzker fam­ily name brought in­stant fundrais­ing ca­chet to the pres­i­den­tial cam­paign as well as the sup­port of many of Chicago’s best rank-and-file fundrais­ers, such as Paula Crown of the Henry Crown fam­ily. The Crowns are worth an es­ti­mated $4.1 bil­lion and hold stakes in the Chicago Bulls and the New York Yan­kees, Hil­ton Ho­tels, and Rock­e­feller Cen­ter.

Over the Christ­mas hol­i­days and into early Jan­uary, Obama made sev­eral per­sonal ap­peals and lured big-name fundrais­ers in such donor-rich set­tings as Hol­ly­wood and Wall Street. Big-dol­lar events be­gan com­ing to­gether quickly.

Obama scored early head­lines by snag­ging Hol­ly­wood record mogul David Gef­fen, one of the Demo­cratic Party’s big­gest donors and fundrais­ers dur­ing the Clin­ton era, who pub­licly de­fected and hosted a $1 mil­lion fundraiser in Hol­ly­wood with Katzen­berg and di­rec­tor Steven Spiel­berg, an­chors of the Clin­tons’ Hol­ly­wood fundrais­ing dream team in the 1990s.

Black fundrais­ers also re­sponded to Obama’s call, tap­ping into new sources of Demo­cratic cash in black com­mu­ni­ties. “You ac­tu­ally have some­one now who looks like he can reach out to a wide and di­verse group,” said Lorenzo M. Bel­lamy, an African Amer­i­can from An­napo­lis who is rais­ing money for Obama.

“He has a way of al­low­ing you to feel as though you are a crit­i­cal part of the op­er­a­tion,” said Or­lan John­son, a Wash­ing­ton lawyer and law pro­fes­sor at Howard Univer­sity who hosted a fundraiser at Union Sta­tion last week that raised more than $400,000.

The ini­tial en­thu­si­asm about Obama pushed his first-quar­ter goal up to $15 mil­lion early in the year, and by March it had shifted again to more than $20 mil­lion. Al­though his fi­nal num­bers for the quar­ter ex­ceeded ex­pec­ta­tions, Clin­ton still fin­ished first in the fundrais­ing race with $26 mil­lion, the bulk of which came from long­time party loy­al­ists. Clin­ton’s hus­band, renowned for his per­sua­sive skills, has not yet be­come fully en­gaged.

Still, Obama has lured many es­tab­lish­ment donors and fundrais­ers from the for­mer pres­i­dent’s team. Both of the Clin­ton Fed­eral Com­mu­ni­ca­tions Com­mis­sion chair­men — Reed Hundt and William E. Ken­nard — have jumped to Obama, bring­ing in­stant cred­i­bil­ity and lengthy Rolodexes in the wealthy telecom­mu­ni­ca­tions and In­ter­net in­dus­tries they once over­saw.

Bos­ton phi­lan­thropist Alan Solomont and hedge fund ex­ec­u­tive Orin Kramer, two an­chors of the Clin­ton money ma­chine dat­ing to 1992, also joined Obama, as did two prom­i­nent Clin­ton sup­port­ers’ sons, James P. Ru­bin and Kirk Dorn­bush.

Ru­bin, a private eq­uity in­vestor, is the son of for­mer Clin­ton Trea­sury sec­re­tary Robert E. Ru­bin, a key ar­chi­tect of Bill Clin­ton’s Wall Street fundrais­ing ma­chine and now an ad­viser to Hil­lary Clin­ton.

Dorn­bush, an At­lanta busi­ness­man and the son of Clin­ton’s am­bas­sador to the Nether­lands, K. Terry Dorn­bush, is an­chor­ing Obama’s fundrais­ing in the South. Kirk Dorn­bush has raised money for South­ern Democrats such as Ed­wards and for­mer Vir­ginia gov­er­nor Mark R. Warner and planned to sit out the Demo­cratic pri­maries af­ter Warner dropped from the race.

But af­ter an over­ture from the Obama cam­paign that in­cluded a copy of one of the sen­a­tor’s books, Dorn­bush said he thought Obama “had a gen­uine heart­felt re­spect for peo­ple whose opin­ions might be dif­fer­ent.”

Af­ter half an hour with Obama in Wash­ing­ton, Dorn­bush en­listed in the cam­paign.

From the out­set, Obama tried to es­tab­lish a “Wash­ing­ton out­sider” im­age — mov­ing his cam­paign op­er­a­tions to Chicago and mak­ing a bold prom­ise to refuse checks writ­ten or gath­ered by reg­is­tered fed­eral lob­by­ists.

The cam­paign re­ceived $50,566 from 49 lob­by­ists, but aides flagged the checks dur­ing ini­tial screen­ing and said they will re­turn the money. Still, for host­ing events and oth­er­wise rais­ing money, the Obama fundrais­ing team is re­ly­ing on part­ners in lob­by­ing firms who are not reg­is­tered for spe­cific clients, for­mer lob­by­ists who re­cently dropped clients and spouses of lob­by­ists. The strat­egy al­lows Obama’s team to reach the wealthy clients of lob­by­ing firms while tech­ni­cally com­ply­ing with his pledge.

Joanne Han­nett, whose hus­band, Fred, is a lob­by­ist for Unit­edHealth Group and other clients, is help­ing raise money for Obama. Al­though Fred Han­nett at­tended an Obama event, he said he has not per­son­ally do­nated any money or “so­licited any of my clients.”

Obama also has no pro­hi­bi­tion against us­ing state lob­by­ists to raise money, even when they rep­re­sent com­pa­nies with busi­ness be­fore the fed­eral gov­ern­ment.

“I like that he is not ac­cept­ing money from fed­eral lob­by­ists,” said Bel­lamy, a one­time fed­eral lob­by­ist who now lob­bies the Mary­land leg­is­la­ture for such clients as In­ter­net gi­ant AOL and de­fense con­trac­tor Lock­heed Martin. “I think peo­ple find that in­ter­est­ing and in­sight­ful that he won’t be be­holden to those with in­ter­ests be­fore the fed­eral gov­ern­ment.”

Obama spokesman Bill Bur­ton said the rule “isn’t a per­fect so­lu­tion to the prob­lem and it isn’t even a per­fect sym­bol, but it is rep­re­sen­ta­tive of the kind of ad­min­is­tra­tion Obama is go­ing to have.”

Pritzker said Obama could have fundrais­ing mo­men­tum af­ter the first quar­ter. “I think that cy­cle be­tween ex­cite­ment and en­thu­si­asm and money is be­gin­ning, and I think it is re­ally feed­ing on it­self,” she said. “It feels very solid.”

Cer­tainly, the mood in the Wash­ing­ton ball­room re­flected that. Fundrais­ers left with red fold­ers stuffed with cam­paign con­tacts and the dates of com­ing events. They clam­ored to join pol­icy ad­vi­sory groups and pledged to seize on the mood Obama re­ferred to— the pal­pa­ble de­sire for po­lit­i­cal change.

Still, Obama faces the prospect of an en­er­gized Clin­ton cam­paign, armed with a donor list of 250,000 names it has not fully tapped. And even Obama’s fundrais­ing suc­cess could have a down­side if it un­der­mines the con­trast he has sought to draw be­tween him­self and his ri­vals.

Speak­ing to vot­ers in New Hamp­shire ear­lier this month, as the news broke of his for­mi­da­ble first-quar­ter haul, he tried to re­mind them that he has “al­ways tried to curb the in­flu­ence of money in pol­i­tics.”

“Lis­ten,” he told them, “I would love not to have to raise money so I could spend all my time in town hall meet­ings.”

BY GRE­GORY SMITH — AS­SO­CI­ATED PRESS

Barack Obama has found more sup­port on­line than his op­po­nents have, but he also has his share of big-name, big-money Demo­cratic fundrais­ers.

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