Let’s talk money – Obama money. Let’s talk fundraising money, Federal Elections Commission reportable money, sources of said money, money reports, money prospects. It’s a lot to talk about, but let’s talk money!
We won’t discuss right here, right now the Rezko type money we wrote about in REZKO for Dummies. Remember when we wrote this?
In olden days, corrupt Chicago politicians would simply take a bag full of money. Usually the bag of money was passed under the table while corrupt politician and corrupt fixer lunched or dined. Those were simpler times.
With all the do-gooders trying to stamp out political corruption things got more complicated for politicians on the take. [snip]
Now imagine this: A Chicago politician, in modern day Chicago, who wants things he can’t afford. Wifey likes expensive things and wants a big mansion to live in. What new clever system would said modern day Chicago politician devise? Said Chicago politician first acquaints himself with ethics laws and how to skirt them.
Chicago politician and Chicago fixer come up with this scheme: Funnel tens of millions of dollars in government money to the Chicago Fixer and get him to somehow buy you a house, among other amenities. Yes, you have to turn your back on freezing Chicago constituents, African-Americans mostly, but hey, it’s the Chicago way.
We thought of that REZKO for Dummies article today when we heard the news about the Federal Elections Commission.
In recent days we have written about flip-flop-flim-flam contortionist Barack Obama and how he has little to no testicular fortitude. We chided Jesse Jackson for not knowing of Obama’s lack of… fight.
However, there is one thing to which Obama has displayed remarkable dedication – neutering the Federal Elections Commission. Obama blocked the appointment of Von Spakovsky to the Federal Election Commission and thereby the Commission could not work this entire year. Of course with Obama it’s all high minded, principle which shut down the Federal Elections Commission this campaign season.
Attention presidential candidates (and independent political groups hoping to make a splash in the 2008 campaigns): The referees are back on the field.
This morning, a full six members of the Federal Election Commission took their seats and announced they were back after a strange, seven-month hiatus. In their first official action, the commission elected a new chairman, Donald McGahn, who previously served as the lead lawyer for the House Republicans’ campaign committee and handled legal work for former House Majority Leader Tom DeLay (R-Texas).
The return of the FEC comes after the Senate ended a deadlock over one of President Bush’s appointees (the controversial commissioner, Hans Von Spakovsky, removed his name from consideration). During the tussle over Von Spakovsky, the FEC had only two commissioners and was rendered unable to take official action.
Von Spakovsky was not a good appointment at all. But it is interesting that the only fight Obama has displayed in his entire career just happens to block oversight during this campaign season.
Welcome back F.E.C. Now do your job.
A lot of money has been raised this election cycle. Obama supposedly raised a lot of money from students many of whom (coming from elite schools and the upper class demographic which loves Obama so much) do not work and got money from their parents to contribute to Obama. Presumably that type of “straw” donor contribution is legal.
But there have been other questions this campaign cycle which the F.E.C. has little or no authority to do anything about. For instance, if someone with big bucks (foreign or domestic) wanted to pass money on to a politician there is a very big loophole which only a prosecutor could dislodge.
Here is a way to pass a paper bag full of money “under the table”:
A torrent of secret money is flooding into the leading presidential campaigns, with more than $118 million, or one-quarter of the total raised in this cycle, banked without disclosure of who gave the funds or where the donations originated.
The money is coming from hundreds of thousands of donations of $200 or less, which have been widely praised for democratizing the system for funding White House bids. However, the surge in low-dollar gifts has come at the cost of transparency, since federal law only requires campaigns to itemize donations when a donor gives more than $200.
According to an analysis being released today by a Washington think tank, the Campaign Finance Institute, Senator Obama of Illinois led the pack with such small and secret donations, pulling in about $31 million during 2007. Rep. Ron Paul ran second in small gifts, raking in more than $17 million. At the end of the year, Senator Clinton and John Edwards, who has since dropped out, were essentially tied for third in unitemized, small contributions, with each candidate raising about $11 million. [snip]
However, one area of concern with the flood of donations, particularly those made online, is that foreigners could be weighing in illegally in an American election. Mr. Obama’s Web site allows donors to choose an address in one of 227 possible countries or territories, including Iran, Iraq, Zimbabwe, and Yemen. [snip]
While it is a crime for most foreigners to donate to American campaigns at the federal level, those with so-called green card status can donate legally, as can Americans who live abroad.
The most cautious campaign when it comes to accepting online donations from overseas seems to be that of Mrs. Clinton. Visitors to her Web site who want to list an address abroad are directed to a special page which advises that such donations are only taken by mail and that donors “must include a copy of your U.S. passport or green card.”
“The mail-in requirement provides an additional level of review that would not occur with an online contribution that is automatically processed,” a spokesman for Mrs. Clinton, Blake Zeff, said.
Spokesmen for Mr. Obama and Mr. McCain did not respond to inquiries about their screening system for gifts coming from abroad. The donation pages for all the candidates remind donors that they must be American citizens or legal residents. Mr. Paul’s site also has a pop-up feature which asks any donor with a foreign address to confirm American citizenship.
However, an aide to Mrs. Clinton suggested that these mechanisms do not go far enough. “A foreign national could misrepresent his or her citizenship when contributing online, by checking the box…when such a representation is not true,” the aide, who asked not to be named, said.
Loopholes, loopholes, loopholes – it’s a three ring circus when the F.E.C. ringmaster is presiding, much worse when the F.E.C. is voting “not present”.
A fairly glaring whopper from Obama, mentioned in this op-ed by economics professor Jay Mandle in the Washington Post:
During a Feb. 26 debate in Cleveland, for example, Obama said that “we have now raised 90 percent of our donations from small donors, $25, $50.” His campaign’s own data from January 2007 through January 2008 show that 36 percent of donated funds were from small donors. Obama probably meant that 90 percent of the individuals who contributed were small donors, but the number of donors has not been verified.
While the portion of his money raised from small donors probably increased from 36 percent by the time Obama made the statement in the debate, there’s no way it changed from 36 to 90 percent in twenty-six days.
Mandle’s op-ed notes “Contributions of less than $200 do not have to be itemized in reports to the Federal Election Commission, so we have no idea how many are made.”
The FEC asks campaigns to report any donor whose cumulative contributions have exceeded $200. Is that occurring on the Obama campaign? (If so, no wonder the campaign has 700 paid employees. Imagine keeping track of John Smith donating $20 in January, $30 in February, only $15 in March, etc., times 2.7 million. Yes, you read that correctly. According to the Obama campaign, 91 percent — roughly 2.7 million — of their 3 million donors have given less than $100. Presuming that is accurate, right now, they are only obligated to report information to the FEC on 9 percent of their donors!)
If the campaign isn’t able to keep up, and donors don’t have to report a donation of less than $200 to the FEC, what is to stop someone from working around the $2,300 per candidate per race limit by donating, say, $19,900 in a hundred donations of $199?
Today we also have more confirmation of what we wrote last month. We wrote that Obama is dependent on Hillary supporters for money and we advised against such money being provided.
The Obama number above includes $10 million which is in general election funds which means Obama and McCain are now at financial parity. Of course the DNC has only $4.4 million while the RNC has $53.6 million. McCain can count on support from the RNC’s tens of millions. Obama will not get a penny from Howard Dean’s near insolvent DNC.
The Obama calculation is that his well of donations is already dry but that now he can tap Hillary supporters for the $300 million Obama will need for this election if the Superdelegates ignore the fact Obama is unqualified and unelectable and gift him the nomination.
Obama wants to spend money raised by Hillary Clinton supporters in order to intimidate John McCain. Obama has worked hard to forget that even when he outspent Hillary by 5-1, 4-1, 3-1 in Ohio, Texas, Pennsylvania, Kentucky, West Virginia, Indiana, California, etc., etc. Hillary still beat him.
McCain will beat Obama too no matter how much money Obama raises.
Obama is unelectable but believes if he outspends McCain 6-1 or 7-1 or more outlandish sums, then he can win. Obama could not win against Hillary when he outspent her 4-1 and Obama will not beat McCain if he only outspends McCain 4-1. That’s why Obama wants cash quickly from Hillary supporters.
Hillary Clinton’s Democratic donors must treat Obama with the same contempt Obama subjects Hillary Clinton and her supporters. Let Hillary spend the summer fundraising and taking her message to Americans. Let Obama raise his own cash from his internet dens of Hopium.
McCain’s current money numbers:
Campaign officials say Republican John McCain raised more than $22 million in June for his presidential bid.
That’s McCain’s best month yet. He ends the month of June with nearly $27 million cash on hand, according to campaign officials.
McCain campaign manager Rick Davis said Thursday that McCain and the national Republican Party together entered the month of July with about $95 million in the bank.
The money has given McCain the ability to outspend Democratic rival Barack Obama on television advertising in key battleground states, Davis says.
Obama money woes, and Clinton supporter NOs:
Fundraisers say the reason for the lower-than-expected numbers for Obama was his continuing difficulty in getting former supporters of Clinton to donate following the primary battle.
–Suggests his shift to the middle could be hurting him in the liberal small donor cadre. The campaign says that some 1.7 million people have given $200 or less, making up 45% of Obama’s total.
–The DNC reported having only $3.9 million cash on hand June 1. It hasn’t reported its fundraising results for June.
–Given Obama’s ambitious $480 million budget, one fundraiser said that a healthy June number would have been much closer to $50 million.
“Think about it; you basically have 4½ months to raise $300 million. Every poor month puts you further into the hole. It’s like Hillary and the delegate race — sooner or later the math just catches up with you.”
Obama, instead of reporting numbers, whines.
The Washington Post on Obama money woes:
The fundraising machine Sen. Barack Obama is relying on to overwhelm Sen. John McCain this fall has shown signs of wear in recent weeks, as Internet contributions have slowed and efforts to recruit top donors to Sen. Hillary Rodham Clinton’s campaign have been beset by lingering tensions.
In a conference call Wednesday night, a top Obama adviser told members of the senator’s national finance committee that “there’s a huge amount of money we need to raise, and we have to be aware of that,” according to one person on the call, who said the campaign, combined with the Democratic National Committee, hopes to have raised $450 million by Election Day.
Several of Obama’s top fundraisers said yesterday that they don’t think trend lines showing three straight months of declining donations to the candidate are cause for concern. But they said the campaign has recognized it will need to expand efforts to raise money from high-dollar donors in order to meet budget projections.
“It’s one of the reasons why the Clinton people are so important,” said Kirk Wagar, Obama’s Florida finance chairman. “Most of us have beaten our Rolodexes pretty badly.”
We wrote it a while back: Hillary Donors: Just Say NO. NObama, NOvember.
The Journal states:
John McCain’s steady fundraising progress could put him on nearly even financial footing with Barack Obama, dispelling the widely accepted notion that the Democratic candidate will be able to hugely outspend his rival in advertising and voter-turnout drives ahead of the presidential election.
McCain can thank incompetent Howard Dean for the big help to his campaign:
The McCain campaign expects to benefit from the Republican National Committee’s widening fundraising edge over the Democratic National Committee. The party committees are allowed to coordinate spending with their presidential nominees, as well as make independent, uncoordinated expenditures.
At the end of May, the RNC had more than ten times as much money in the bank as the DNC — $40.6 million to $4.4 million. June financial reports are due with the Federal Election Commission on July 20.
Both parties also have formed joint fundraising accounts with their candidates. Davis said the McCain Victory 2008 committee had $67.8 million in the bank at the end of June. Combined with McCain’s own war chest, the Arizona senator now has about $94.5 million as he prepares to enter the general election.
Obama, meanwhile, has yet to release his latest financial totals. But his campaign ended May with $43.1 million. The Obama Victory Fund, a joint committee with the DNC, did not open shop until early June.
The McCain campaign’s Davis said: “We anticipate having $210 million available to us from September 4 on to election day,” including public funding and party money.
Meanwhile, Newsweek explodes some Obama money myths:
Yesterday, I took Republican presidential nominee John McCain to task for the creative ways he’s found to funnel largely unregulated and unrestricted money into his campaign—but, as some commenters rightly noted, I didn’t deal with his Democratic rival, Barack Obama, at all. That was by design. The point of the piece was to show that McCain isn’t quite as financially disadvantaged as the MSM makes him out to be—mostly because he’s busy making sure private money benefits his bid even as he accepts (and pats himself on the back for accepting) public funds. It wasn’t meant to be a compare and contrast.
Ah, we’re back to loopholes. Newsweek looks at Obama’s Chicago money machine:
That’s not to imply, however, the Obama isn’t playing the game as well. He is. Here, then, are four myths about Obama’s much-vaunted money machine—and the reality behind them.
1. Obama Opted Out of Public Financing for Reasons of Principle
Um, no. This one would’ve been too obvious to refute, except that when Obama ducked his promise to “aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election” last month, he tried to portray the decision as something other than pure pragmatism. “Declare your independence from this broken system,” he told supporters. Baloney. In early 2007, Obama informed Larry King that “the presidential public financing system works,” and the next month, he co-sponsored legislation to preserve the current setup. At the time, Obama was well-aware of the havoc 527s could wreak; after all, he’d watched the Swiftboat Vets attack John Kerry. And it was no secret—as Howard Dean had proved more than three years earlier—that the Internet could democratize the process of funding a favored politician. Since then, the 527s haven’t gotten scarier, and the Web hasn’t gotten webbier. What’s changed is that it’s now Obama (not Kerry) who’s in the GOP’s crosshairs and Obama (not Dean) who’s rolling in the dough. So he did what any pol would do—he broke his pledge and followed the money. This was undoubtedly a wise move—with his money machine up and running, he’ll certainly raise more than the $84.1 million he’d receive from taxpayers and have a better chance of winning the White House because of it. But it’s hardly principled.
Obama unprincipled? Pshaw say the DailyKooks.
2. Obama Gets All—or Even the Vast Majority—of His Money from Small Donors
Rationalizing his decision, Obama said that only by opting out of public financing would his campaign be “truly funded by the American people.” Besides being sort of absurd on its face—when did accepting $3 from
eachindividual taxpayers become less egalitarian than accepting private money?—the senator’s claim rests on a shaky premise: that all (or even most) of Obama’s cash comes from regular guys and gals sending in $5 donations over the Internets. Fact is, that’s not true. Now, don’t get me wrong. Obama’s massive fundraising machine—which rejects money from federal lobbyists and PACs and boasts a record number of small-sum donors among its 1.5 million individual contributors—deserves a ton of praise. It is, simply put, the most democratic in American political history.
That said, Obama’s fundraising base still looks a lot like Al Gore’s or John Kerry’s. For starters, the majority of Obama’s money continues to come from folks with fat(ter) wallets. In the primaries, for example, donations larger than $200 accounted for 55 percent of Obama’s haul, or about $150 million. Lawyers forked over $18 million of that total; the largest single contributor was Goldman Sachs. And now that the primaries are over, Obama is free—like McCain—to funnel checks larger than $2,300 through the national party. He’s taking full advantage of that luxury. In June, Obama reaped $6 million from guests at Ethel Kennedy’s Hickory Hill home in Virginia. Ten days ago, the campaign pulled in $5 million at a Hollywood fundraiser. And just last night, Obama visited a pair of plush money events in the tony suburbs of Atlanta. At each appearance, supporters shelled out $28,500—the legal limit on donations to the DNC—for the privilege of Obama’s presence. And there’s more where that came from. As Penny Pritzker, Obama’s campaign finance chairwoman, told the New York Times recently, the main reason the campaign has relied on small donors for so long is that it had yet to find the time to milk the big ones. “We have not been able to have much of the senator’s time during the primaries,” she said, “so we had to rely more on the Internet.”
None of which is to say that Obama’s money machine isn’t the most democratic we’ve ever seen. It is. (At least 90 percent of his donors—more than 1.3 million—give small sums of money.) It’s just that it’s not more democratic than public financing–despite the spin from Chicago.
We’re too polite to mention Rezko.
3. The Share of Obama’s Money That Comes From Small Donors Is Completely Unprecedented
This one’s kind of surprising. Obama has certainly set the record for small-sum donations as a share of his total take—about 45 percent of his money comes from checks of $200 or less. But while Obama is definitely doing better with small donors than previous presidential candidates, it’s not by the *astronomical* margin you might have assumed. According to an analysis by Joseph Graf, 31 percent of Bush’s money in 2004 came from donations of $200 or less (compared to 16 percent in 2000). Kerry, meanwhile, raised 37 percent of his money in 2004 from small donors (as compared to 20 percent for Gore in 2000). That’s only eight points less than Obama—and there’s a strong chance that if Kerry were running this year, with improved technology and an improved environment for Dems, he would’ve done better.
The only thing unprecedented about Obama is his flim-flammery – the audacity of his flim-flam-flip-floppery.
4. Obama Won’t Receive Any Help From Outside Groups
Yesterday, I mentioned a few of the extracurricular organizations planning to boost McCain’s bid with unregulated and unrestricted “soft money” investments: the NRA, the Christian Defense Coalition and the former Swift Boat Vets for Truth (among others). But McCain’s not alone. Even though the Obama campaign has sought to maintain message control and distinguish itself from Team McCain by discouraging its top fundraisers from giving to outside orgs—a directive that killed off a pair of Democratic-aligned soft-money groups, Fund for America and Progressive Media U.S.A., in their infancy—there are as many 527s poised to assist the senator from Illinois as his rival from Arizona. These include America Votes, an umbrella organization planning a $20 million voter mobilization drive; PowerPAC.org, also planning to invest $15 million on GOTV; a host of unions, including the SEI and A.F.L.-C.I.O., which announced its $53.4 million election effort late last month; and, of course, MoveOn.org, which recently closed its 527 but is hoping to raise some $40 million for the general election through its political action committee.
Obama will get state lobbyist money too. When Obama says something, count on the reverse being true.
Obama simply cannot be trusted. Obama cannot be trusted on any issue. Obama cannot be trusted by his friends. Obama cannot be trusted by his enemies. Obama cannot be trusted.