Obama's fundraising success puts public financing in question
By WAYNE SLATER / The Dallas Morning News
Wednesday, November 12, 2008
AUSTIN – Barack Obama's fundraising prowess has left Watergate-era campaign reforms a shambles, say advocacy groups ready to push for fixes to curb the influence of big money in politics.
Mr. Obama, a Democrat, raised more than $640 million overall, relying on a potent combination of small donors and large bundlers, including many in Texas. He's the first White House candidate who didn't take public money in the fall election.
"The public finance system in its current form is dead," said Craig McDonald of Texans for Public Justice, a nonprofit group that tracks campaign donations.
That system, which caps individual contributions and provides public money for presidential candidates, was set up in 1974 after the Nixon-Watergate scandal to try to limit special interests from bankrolling entire campaigns.
Most presidential contenders have solicited private contributions in the primaries, and all – until this year – took the public money in the general election.
Reformers warn that if public financing fails, it would end one of the few checks on donors who unduly seek to buy access and affect public policy.
Mr. Obama defended his fundraising, saying he wanted to give all donors a chance to back him.
His GOP opponent criticized Mr. Obama for not taking public funding, but he drew few complaints from liberal organizations that have long championed efforts to regulate campaign money.
Mr. McDonald said such groups were slow to criticize Mr. Obama because they recognized the system had become increasingly outdated and underfunded. But also, he said, "because he was their guy. A lot of them were rooting for Obama."
Republican John McCain accepted $84 million in federal funding for the general election. That left him at a disadvantage against Mr. Obama, who raised four times that much for the November race.
Many gave maximum
Although Mr. Obama touted his success in attracting small-dollar givers, a third of his support nationally – and in Texas – came from those giving the maximum of $2,300.
In Texas, just a quarter of his money came from donations of $200 or less. Nationally, the figure was higher – nearly half of his money came from donors of $200 or less, many solicited on the Internet.
Contributing to Mr. Obama's fundraising sensation was a team of about 600 big-dollar bundlers, supporters who tap their friends, business associates and others for donations. They collected $50,000 to $200,000 from individuals for the Obama camp. Mr. McCain had a similar program during the primaries.
The bundlers include interests that do business with government or could benefit from government decisions.
Among them, industries seeking contracts or favorable tax treatment, trial lawyers looking to reverse restrictions on the ability of injured people to sue businesses, and those hoping to loosen federal regulations.
San Antonio lawyer Mikal Watts, one of 33 Obama bundlers in Texas, said public financing helps limit the inordinate influence of wealthy givers. But he said the system has to be funded adequately so that candidates continue to take advantage of it.
Mr. Watts said he was not troubled by Mr. Obama's decision to forgo public money because getting millions of new donors diminished the influence of the big-dollar network.
"When you have 6 million donating in a presidential cycle, it drowns out the ability of [big-dollar funders] to unduly affect the election," he said.
Dallas lawyer Mark Iola, another Obama bundler, agreed: "He basically built a parallel public system."
"Anytime you energize the public like he has, both in terms of giving and participating in our democracy, it's a good thing. I don't see how you could think otherwise," Mr. Iola said.
Other big-dollar Obama bundlers in Texas included former Dallas Mayor Ron Kirk, Dallas lawyers Russell Budd and Doug Haloftis and Dallas venture capitalist Kneeland Youngblood, according to campaign reports.
Massie Ritsch of the nonpartisan Center for Responsive Politics said Mr. Obama's record-breaking financial year was unusual and not likely to be duplicated anytime soon.
"Any presidential candidate in the future who thinks he can raise $650 million like Obama did is delusional," he said.
Still, in the wake of the financial outpouring, several government watchdog groups plan to press the president-elect and Congress to make changes that assure the public financing system remains viable.
They want state spending limits lifted, the federal match for small donations increased and better identification of contributors over the Internet.
Most important, advocates say the amount available to candidates under the public-finance system must be boosted substantially to meet the ever-increasing cost of politicking.
"The public finance system, although it's cleaner money, in the practical world doesn't give them the money they think they can raise outside the system," Mr. McDonald said. "So basically, it comes down to a numbers game."
Top Texas bundlers for Obama
Here are some top Texas bundlers, those backers who collected donations for the Obama campaign from friends, business associates and others who, by law, were limited in giving only up to $2,300 per election cycle.
Arthur Schechter, Houston lawyer
Richard Mithoff, Houston lawyer
Kneeland Youngblood, Dallas investor
Mark Iola, Dallas lawyer
Mikal Watts, San Antonio lawyer
Naomi Aberly, Dallas investor
Cappy McGarr, Dallas investor
Doug Haloftis, Dallas lawyer
Russell Budd, Dallas lawyer
Ron Kirk, former Dallas mayor
SOURCES: Federal Election Commission; Center for Responsive Politics; Dallas Morning News research